Do Entrepreneurial Capabilities Define Competitiveness in Textile and Apparel SMES Compared to other Sectors?

  • Mebrahtom Teklehaimanot Tesfa School of Mechanical and Industrial Engineering, Ethiopian Institute of Technology - Mekelle, Mekelle University, 231 Mekelle, Ethiopia
  • Hailekiros Sibhato Gebremichael School of Mechanical and Industrial Engineering, Ethiopian Institute of Technology - Mekelle, Mekelle University, 231 Mekelle, Ethiopia
  • Kinfe Tsegay Beyene School of Mechanical and Industrial Engineering, Ethiopian Institute of Technology - Mekelle, Mekelle University, 231 Mekelle, Ethiopia

Abstract

This research aims to examine the impact of entrepreneurial capabilities on the competitiveness of Small and Medium Enterprises (SMEs) and the mediating role of dynamic capabilities. Structural equation modeling was utilized to test the hypotheses developed on a sample of 459 manufacturing SMEs (20% of them are textile and apparel) operating in Tigray, Ethiopia. Data were collected using a structured questionnaire. Proportional stratified sampling was used to ensure a representative sample of SMEs from each city. The empirical results of the study revealed that entrepreneurial and dynamic capabilities have a positive and significant influence on SMEs' competitiveness. Specifically, entrepreneurial capabilities can positively and significantly impact the SMEs' competitiveness mediated by dynamic capabilities. The competitiveness of textile and apparel SMEs' is influenced by their entrepreneurial and dynamic capabilities, similar to other sectors. However, the competitiveness of the chemical and mining sectors is not influenced by dynamic capabilities and entrepreneurial capabilities, respectively. This research contributes theoretically by integrating four entrepreneurial capabilities (autonomy, risk-taking, proactiveness, and innovativeness) into a single framework grounded in the dynamic resource-based view of competitiveness (asset, process, and performance). These findings address a research gap by providing empirical evidence of the mediating role of dynamic capabilities in the relationship between entrepreneurial resources and SMEs' competitiveness from an emerging economy perspective. This study offers valuable insights for SME managers/owners and decision-makers highlighting the importance of leveraging entrepreneurial and dynamic capabilities to enhance competitiveness.

KEYWORDS: Competitiveness, Dynamic capabilities, Entrepreneurial capabilities, SMEs, Textile and Apparel

 

Published
2025-07-29
Issue
Vol. 5 No. 2 (2025)
Section
Articles
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