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Innovation capability as a mediator of the relation between talent management and entrepreneurial firm performance

Fuangfa Panya (Department of Business Administration, Faculty of Business, Economics and Communications, Naresuan University, Phitsanulok, Thailand)
Pawinee Petchsawang (Graduate School of Human Resource Development, National Institute of Development Administration, Bangkok, Thailand)

Journal of Small Business and Enterprise Development

ISSN: 1462-6004

Article publication date: 8 October 2024

75

Abstract

Purpose

The study aims to investigate innovation capability as a mediator in the relationship between talent management (TM) and entrepreneurial firm performance in Micro, Small and Medium Enterprises (MSMEs) in Thailand based on employer perceptions.

Design/methodology/approach

A questionnaire survey was completed by 674 MSMEs in Thailand, both directly and online. Four hypotheses were tested using structural equation modelling (SEM).

Findings

The results demonstrated that TM has a significant and positive influence on innovation capability, but no evidence was found for a positive relationship between TM and entrepreneurial firm performance. However, innovation capability positively influences entrepreneurial firm performance, and it fully mediates the positive relationship between TM and entrepreneurial firm performance. These results suggest that TM can enhance entrepreneurial firm performance if it is implemented with effective innovation capability.

Research limitations/implications

The SEM model was employed with a limited number of enterprises, so the sample cannot represent the full population, as there are more than three million MSMEs in Thailand. More countries and factors should be incorporated into the model.

Practical implications

The owner-managers and HR practitioners of MSMEs can utilise the study results to develop talent strategies and innovative interventions that will enhance their firm’s performance.

Social implications

This study thus aims to strengthen the capacities of MSME entrepreneurs and policymakers to elevate inclusive innovation capability in MSMEs and to also accelerate progress towards the Sustainable Development Goals (SDG); innovation is one of the three important aspects of SDG9.

Originality/value

The study contributes by filling the research gap related to TM in the MSME business and enterprise development literature, and it aids in creating innovation capability to increase effective investments in TM.

Keywords

Acknowledgements

This work (Grant No. RGNS 65–117) was supported by the Office of the Permanent Secretary, Ministry of Higher Education, Science, Research and Innovation (OPS MHESI), Thailand Science Research and Innovation (TSRI) and Faculty of Business, Economics and Communications, Naresuan University. The authors thank all respondents who participated in this study for their time. The authors thank Editor Professor Patrick J. Murphy, the Co-Editor Thomas G. Pittz, and the anonymous reviewers for their guidance and constructive feedbacks.

Citation

Panya, F. and Petchsawang, P. (2024), "Innovation capability as a mediator of the relation between talent management and entrepreneurial firm performance", Journal of Small Business and Enterprise Development, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JSBED-02-2024-0074

Publisher

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Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

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