Innovation, entrepreneurship, and restaurant performance: A higher-order structural model

Abstract

Drawing on theories from hospitality, innovation, and entrepreneurship, this study examines a higher-order structural model investigating business innovation, the owners' entrepreneurial self-efficacy (ESE), and human capital as drivers of restaurant performance. The theoretically derived model was tested on data from 198 café and restaurant owners in Australia. The PLS-SEM analysis found restaurant innovation activities and the owner's ESE to positively influence restaurant performance. Furthermore, the six ESE dimensions had varying effects on restaurant performance, with ‘Developing new product and market opportunities’ having the strongest effect. In contrast, the entrepreneur's ‘human capital’, representing their levels of business ownership experience and entrepreneurship/industry education, did not significantly affect restaurant performance. However, human capital indirectly affected performance through innovation and ESE. The findings of this study advance theories in restaurant entrepreneurship and performance and present important implications for industry authorities to develop a successful and sustainable restaurant sector.