The Mediating Effect of Motivation on Human Capital and Performance: A Study of Women Entrepreneurs in Meghalaya

Abstract

The study empirically examines the impact of human capital on firm performance in the presence of motivation as a mediating variable. The study is conducted in Meghalaya, in the context of women-owned enterprises, in one of the largest surviving matrilineal cultures in the world found in the north-eastern part of India. Path model has been employed in this study to show the impact of human capital (measured by work experience) on firm performance (measured by growth rate of last five years’ sales) using motivation (measured as total motivation), combining pull and push factors, as the mediating variable. Using self-administered questionnaires, data was captured from 150 first-generation women entrepreneurs in the manufacturing and service sectors. The results show that the direct and indirect impact of human capital on firm performance are positive and significant. The results also indicate that motivation plays a significant role in mediating the relationship between human capital and firm performance. This study was undertaken using a small sample in the three districts of Meghalaya. However, the findings will sensitise and inform business support agents, banks, advisors, academicians and policymakers who rely on data on entrepreneur’s human capital and motivations for decision making.