Entrepreneurial Capability and New Product Development Performance in Micro and Small Enterprises: The Moderating Role of Financial Literacy

Abstract

The purpose of this study is to examine the moderating effect of financial literacy on entrepreneurial capabilities and new product development performance in micro- and small-sized enterprises (MSEs). The respondents in this study consisted of 133 owners of micro and small firms, located in Yogyakarta Indonesia. Moderated regression analysis is used for testing hypotheses. The results revealed that financial literacy moderated relationship between risk taking and new product development performance. Likewise, financial literacy moderated the relationship between proactiveness and new product development performance, while financial literacy showed no such effect on innovativeness and new product development performance. The results also showed that financial literacy had impact on new product development performance. Moreover, risk taking and proactiveness influenced on new product development performance.

DOI: 10.5901/mjss.2016.v7n1p97