Capability-Based Perspective on Business Performance among Women Entrepreneurs in Sarawak, Malaysia

Abstract

This study adopts a capability-based perspective to examine business performance among women entrepreneurs in Sarawak, with particular emphasis on the mediating role of dynamic capabilities and the moderating role of entrepreneurial orientation. Grounded in Social Capital Theory and supported by Dynamic Capabilities Theory, the study examines the relationships of market knowledge, innovation, and social capital with dynamic capabilities and business performance. Data were collected from 350 women entrepreneurs supported by Jabatan Wanita dan Keluarga Sarawak (JWKS) and analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM). The findings reveal that innovation and social capital significantly influence both dynamic capabilities and business performance, whereas market knowledge does not have a significant effect. Dynamic capabilities significantly enhance business performance and mediate the relationships between innovation and business performance and between social capital and business performance, but not between market knowledge and business performance. Furthermore, entrepreneurial orientation does not significantly moderate the relationship between dynamic capabilities and business performance. These findings challenge the assumption that resource possession alone is sufficient to generate performance outcomes, highlighting instead the importance of effectively mobilizing and transforming resources through dynamic capabilities. The study extends Social Capital Theory through a capability-based perspective and provides empirical support for Dynamic Capabilities Theory at the micro-entrepreneur level within a resource- constrained context.