Effect of Social Capital and Entrepreneurial Leadership on Company Performance Mediated by Innovation Capability in Fashion Industry MSMEs in Yogyakarta

Survey of owners or managers of fashion MSMEs in Yogyakarta City

Abstract

This study aims to determine the effect of social capital and entrepreneurial leadership on business performance mediated by innovation capability in fashion industry MSMEs in Yogyakarta City. The main focus of this research is business competition in Indonesia, which continues to increase from year to year, which requires MSMEs to be able to maintain their existence and improve their performance. The method in this study uses descriptive and quantitative analysis. The population of this research is fashion MSMEs in Yogyakarta City. Data collection was carried out through distributing questionnaires face to face and through Google Forms which were distributed to 96 fashion MSMEs in Yogyakarta City. The method used to analyze the data used Partial Least Square (SEM-PLS). The results of the analysis in this study show that: 1) social capital has a positive and significant effect on business performance, 2) entrepreneurial leadership has a positive and significant effect on business performance, 3) social capital has a positive and significant effect on innovation capability, 4) entrepreneurial leadership has a positive and significant effect on innovation capability, 5) innovation capability has a positive and significant effect on business performance, 6) innovation capability successfully mediates the effect of social capital on business performance, 7) innovation capability successfully mediates the effect of entrepreneurial leadership on business performance.

Keywords: Social Capital, entrepreneurial leadership, innovation capability, business performance.