How Does Psychological Empowerment Affect Entrepreneurial Orientation at Women-Owned SMEs in Indonesia?

Abstract

Objective - This research is conducted with a focus on women-owned SMEs in Indonesia, which play a crucial role in driving the nation's economic progress. The study aims to determine whether the psychological empowerment and entrepreneurial orientation of women who own and operate SMEs can be enhanced to encourage further economic development. Methodology/Technique – This study employs quantitative analysis, with primary data collected through a questionnaire survey. The survey garnered responses from 796 participants selected via quota sampling from 3 major densely populated provinces in Indonesia, namely West Java Province, West Sumatra Province, and Yogyakarta D.I. Province. Structural Equation Modeling was used to test the model. Finding – The results of the analysis reveal that women's psychological empowerment has a significant impact on entrepreneurial orientation. Interventions designed to bolster psychological empowerment and entrepreneurial orientation are expected to enhance the productivity of women-led SMEs. The research has yielded an alternative model for improving the performance of female entrepreneurs in the SME sector to boost competitiveness by fostering increased entrepreneurial intentions. Novelty – In the framework of social cognitive theory, Women's Psychological Empowerment represents a psychological asset that enables individuals, particularly female SME operators, to address challenges in their environments proactively. This empowerment is associated with a positive orientation towards entrepreneurial behavior. The study has yielded a model that aims to augment the capabilities of women SME entrepreneurs, thereby preparing them to thrive within the digital economy ecosystem. Type of Paper: Empirical JEL Classification: L2, L26 Keywords: Psychological Empowerment; Entrepreneurial Orientation; Women-Owned SMEs; Gender Reference to this paper should be referred to as follows: Kadiyono, A,L; Cahyono, A.B.F. (2023). How Does Psychological Empowerment Affect Entrepreneurial Orientation at Women-Owned SMEs in Indonesia?, GATR-Global J. Bus. Soc. Sci. Review, 11(4), 93–106. https://doi.org/10.35609/gjbssr.2023.11.4(3)