Abstract
This study investigated the mediating and moderating effects of competitive advantage and access to working capital, respectively, on the relationship between entrepreneurial competencies and informal microenterprise economic performance in Senegal from the lens of resource-based view theory (RBV). Data were randomly gathered using the cross-sectional research design from 356 informal micro-entrepreneurs operating in the informal sector. The study outcomes revealed that entrepreneurial competencies and competitive advantage emerged as significant predictors of economic performance for informal microenterprises in Senegal. On the contrary, access to working capital displayed an adverse moderating effect, while competitive advantage exhibited a partial and positive mediating effect on the relationship between entrepreneurial competencies and economic performance of informal microenterprises. The Important and Performance Matrix Analysis (IPMA) results signify that the most significant considerations for the economic performance of informal microenterprises in Senegal were competitive advantage, access to working capital, commitment competency, and relationship competency. Simultaneously, this study expanded the reach of RBV by enhancing our understanding pertaining to the mediating and moderating roles in the relationships among entrepreneurial competencies, competitive advantage, and access to working capital towards improving the economic performance of informal microenterprises across developing countries. Since many have lost their jobs due to the Coronavirus Disease 2019 (COVID-19) pandemic, the Government of Senegal and its policymakers should place more emphasis on the importance of informal entrepreneurship, such as provision of low-interest credit facilities for their working capital, as well as thorough training in the strategic advantage and competencies domains. This is because informal entrepreneurs have the ability, via jobs creation and income generating activities, to contribute to the economic growth of the country.
Highlights
This article is an open access articleMicroenterprises are small businesses that generate income profits, and address socioeconomic issues related to poverty [1]
This study empirically addressed the three main objectives outlined, which are the direct effect of entrepreneurial competencies on economic performance of informal microenterprises, the mediating effect of competitive advantage on the relationship between entrepreneurial competencies and economic performance, and the moderating effect of access to working capital on the relationship between competitive advantage and economic performance of informal microenterprises
Based on the first objective, the findings indicate that entrepreneurial competencies displayed significantly positive effect on the economic performance of informal microenterprises
Summary
Many entrepreneurs take advantage of the informal market opportunities to sustain and increase their working capital [11], wherein the informal sector is viewed as a source of dynamism and entrepreneurial creativity distinguished by resilience, adaptability, job development, and economic growth [8]. Informal enterprises significantly contribute to employment and economic growth in most developing economies and in Senegal [19], a large fraction of micro-entrepreneurs in developing countries face numerous constraints related to entrepreneurial competencies [2,3], access to working capital [24,25], and economic performance of enterprises [1,26]. A handful of studies have assessed the combined effects of entrepreneurial competencies, competitive advantage, and access to working capital on the economic performance of informal small businesses.
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