Ethnicity, religiosity and SME innovation outcomes: some insights from a Muslim ethnic group

Abstract

The paper aims to examine the effects of socio-cultural factors (i.e., socio-cultural values, ethnicity, and religiosity) on business innovation (i.e., SME innovation outcomes) in an entirely Muslim ethnic (i.e., Minangkabau ethnic group in Indonesia). There has been little research done to reveal the relationship between ethnicity, societal values, religiosity, and innovation outcomes in a totally Muslim community. The present study uses a quantitative approach, PLS method, that utilises SmartPLS 4.0. A survey of 150 Muslim respondents from the Minangkabau ethnic small and medium-sized enterprises had been carried out. It was found that ethnicity had no impact on the SME innovation outcomes. Likewise, religiosity did not moderate the relationship between ethnicity and innovation outcomes. Minangkabau societal values which are a unity between Islamic values and tradition have a positive and significant effect on the innovation outcomes. Implicitly, maximising Minangkabau networks that prioritises the values of cooperation, honesty and trustworthiness will enhance Minangkabau SME innovation outcomes.