The Effect of Entrepreneurial Orientation and Intelectual Capital on Business Performance with Competitive Advantage as Mediating Variable (Study on Traders Under the Guidance of the Pasuruan City Industry and Trade Service in the Pasuruan City GOR area Pasuruan ) 2025 Thailand ICPM August 20 – 21, 2025 R ia Mujianti
INTRODUCTION Business performance reflects succes or failure, aimed at improving the achievement and implementation s of activity or policy in the form of business goals, misions , and visions. The higher the level of achievemenet of business goal . The development traders can play a curcial stategic role in Indonesia natioanl economic development. In the business world, competitive is also increasingly fierce, as business face of challengs and survive and thrive requiring startegic choices to improve business perfomance. I nterviews with several members of the Pasuruan City Trade and Industry Offiecs fostered traders in the GOR Pasuruan City area revealed that in 2022, 20 traders left the associantion due to a sales strike during the pandemic. Causing them to feel their business was queit and unable to meet their income targets. In 2023, the number of traders increased by 90 as these treaders wantes to resume selling to meet their needs. Economic needs but in 2023 10 traders left the association due to relacotion or opening new stalss , so in 2024 in 2025 the number of traders continued to reach 210 traders the guidance of the Pasuruan City Industry an trade Servics . 2025 Thailand ICPM August 20 – 21, 2025
INTRODUCTION During the interview, respondents stated that there were problems faced by traders, there were similar cases, namely the speed of service was still relatively slow when the speed of serivice was able to improve business performance. This observation has encouraged researchers to investigate the causes of these probelms which discuss the problems of business performance faced by traders, especially traders in the Pasuruan City GOR area, in the Pasuruan C ity GOR area under the guidance of the Pasuruan City Industri and Trade Office. The results of the interview showed that the ability of traders in creating new product is still lacking so that it can make it difficult to adadt to the needs of the ever-evolving market and most traders are limited by human resources that are less creative. The integrty of the competitive advantage in the relationship beetween entrepreneurial orientation, intelectual capital and business performance. Some of the mediating roles of competitive adavntage in this relationship are to help traders to be able to excel in a product so that it can give hope to consumers, to develop how traders to be able to improve sales mechanisms when there are many buyers, optimize business performance strategies and can achieve better business perfomance sustainably . 2025 Thailand ICPM August 20 – 21, 2025
LITERATURE REVIEW Entrepreneurial Orientation and Its Impact on Business Performance H1 : Entrepreneurial Orientation has an influence on Business Performance Intelectual Capital and its Effect on Business Performance H2 : Intellectual Capital has a significant effect on Business Performance Entrepreneurial Orientation and its Impact on Competitive Advantage H3 : Entrepreneurial Orientation has a significant effect on Competitive Advantage Intellectual Capital and its Impact on Competitive Advantage H4 : Intellectual Capital has a significant effect on Competitive Advantage 2025 Thailand ICPM August 20 – 21, 2025
LITERATURE REVIEW Competitive advantage and its Impact on Business Performance H5: Competitive Advanatage has a significant effect on Business Performance Competitive Advantage as a Mediator Between Entrepreneurial Orientation and Business Performance H6 : Compotitive Advantage mediates the relationship between Entrepreneurial Orientation and Business Perfomance Competitive Advantage as a Mediator Between Intellectual Capital and Business Performance H7 : Compotitive Adavantage mediates the relationship beetween Intellectual Capital and Business Performance 2025 Thailand ICPM August 20 – 21, 2025
RESEARCH METHODOLODY Traders in the Pasuruan City GOR area mus build a strong business performance system, because some traders are still confused about how to continue developing their business. This study use puposive sampling, a non-probability selection method, because the target population is traders in the Pasuruan City GOR area. The exact number of individuals in this population is known. The sample selection criteria include the main requirements namely : responden must be traders in the Pauruan C ity GOR are a under the guidance of the Pasuruan C ity Industry and Trade Offiece . To determine the sample size. This study uses the Slovin calculation formula. The slovin formula was used because the sample size must the representative, ensuring generallizability . The sample siza for this study was 210 respondents. The margin of error in thin study was 5%, so the sample calculation is as follows . Sampel = 13 7 Bsed on the calculations, the sample size that will become respondents in this research is 137 respondenst . 2025 Thailand ICPM August 20 – 21, 2025
RESEARCH METHODOLODY Convergent Validity Discriminant Validity Alpha Cronbach’s Reliability in Composites 2025 Thailand ICPM August 20 – 21, 2025 Variable AVE Entrepreneurial Orientation (X1) 0.675 Intellectual Capital (X2) 0.705 Competitive Advantage (Z) 0.575 Business Performance (Y) 0.550 Variable X1 X2 Z Y Entrepreneurial Orientation (X1) 0.882 0.018 0.034 0.205 Intellectual Capital (X2) 0.018 0.840 0.124 0.081 Compotitive Advantage (Z) 0.034 0.124 0.758 0.223 Business Performance (Y) 0.205 0.081 0.223 0.742 X1 X2 Z Y Composite Reliability 0.926 0.935 0.890 0.879 Alpha Cronbach 0.904 0.916 0.852 0.835
Hypothesis Tes Results and R 2 β P-Value R 2 Description Direct Influence Entrepreneurial Orientation on Business Performance 0.227 0.003 H1 accepted Intellectual Capital on Business Performance 0.164 0.024 H2 accepted Entrepreneurial Orientation on Competitive Advantage 0.029 0.363 H3 is rejected Intellectual Capital on Competitive Advantage 0.179 0.016 H4 accepted Competitive Advantage on Business Performance 0.329 <0.001 H5 accepted Indirect Influence Entrepreneurial Orientation on Business Performance through Competitive Advantage 0.010 0.437 H6 is rejected Intellectual Capital on Business Performance through Competitive Advatage 0.059 0.163 H7 is rejected Endogen Varibale Competitive Advatage 0.033 Business Performance 0,224
RESEARCH METHODOLODY Research Results 2025 Thailand ICPM August 20 – 21, 2025
DISCUSSION H1: Influance between entrepreneurial orientation and business performance. If vendors in the GOR are already have a good entrepreneurial orientation, this will have an impact in the form of improved business performance. H2: The results of testing the hypothesisi 2 indicate that intellectual capital influences business performance. This indicates that intellectual capital plays a significant role in improving business performance and product innovation. H3: The results of the indicate that there is no influance between Entrepreneurial Orienttaion on Competitive Advantage. This can be seen from the smallest factor load on the entrepreneurial orientation variabel in item X1.2.1 (The ability of traders to learn mistakes in business processing in previous experiences). Describes that traders are unable to learn mistakes in previous experiences. In the results of interviews with serveral respondents stated that to learn mistakes from previous experiences traders are not able to learn mistakes in their business because traders in the Pasuruan City GOR are are mostly still in and out of selling and some have not to effect comtetitive advantage is the educational status accorrding to the responents identitiy which sates states that as many as 119 respondents with the latest educaton of high school/sebior school/equivalent. Responden with a high school/senior school/equivalent education were unable to understand the problems encountered in their previous business experiences. H4: Research on hypothesis 4 shows that there is an infulence between intellectual capital and competitive advanatge. Intellectual capital, which refers to human capital, organizationall capital, and relational capital, can increase and also drive high competitive advantage. 2025 Thailand ICPM August 20 – 21, 2025
DISCUSSION H5: Research on hyppthesis 5 states that competitive advantage influances business performance. That most fertile finding is that when traders have a good competitive advantage, it will result in improved business performance behavior. H6: In tesing the research hypothesis, it shwos that competitive advantage is not able to mediate between entrepreneurial orientation and business performance. Previously, it was known that orientation did not affect competitive advantage, so similar results were was known that orientation did not effect competitive advantage as a mediating variable was still unable to influance between entrepreneurial orientation and business performance. The factor that caused competitive advantage to be unable to mediate was that repondents did not agree to sell products according to consumers expectatons where speen from the lowest factor loading on the competitive advantage variable, namely Z.1.2 (Products sold exceed consumer expectations). This can be suppoerted by the results of interviews with several respondent who said that traders in the GOR are Pasuruan City sells the same products so there are no product updates so consumers have no choice to buy products that suit their needs. . Another factor is that traders in the Pasuruan City GOR are mostly sell cluinar (foods and drink) as many as a 67 respondents according to the respondents identity, it can be said that traders in the Pasuruan City GOR area only sell the same culinary (food and drinks) there are no new products so they do not exceed consumer expectations, if selling more than one product the traders are still struggling to sell products according to consumer expectation. H7: Furthermore, hypothesis 7 indicates that competitive advantage is unable to mediate intellectual capital impact on business performance. Similar results were found in the previous hypothesis. This is due the lack of competitiveness among vendors in the Pasuruan City GOR area, which prevents them from developing their business. The cause of competitive advantage is not able to mediate between intellectual capital and business performance, namely seen from the distributions of answers it is known that the smallest answer or the lowest mean that answer strongly disagree is in item number 3.1.2 which reads (The ability of tradres to sell products exceed consumer expectations), similar to the previous hypothesis in the results of interviews with several respondents who stated that traders sell the same products that there are no product updates. 2025 Thailand ICPM August 20 – 21, 2025
Acording to the study be while competitive advantage does not have much influance on busines performance, entrepreneurial is bale to iprove he performance of traders. Entrepreneurial orientation has a significant on business performance. Intellectual capital have impact effect on business performance. Entrepreneurial orientation no have impact effect on competitive advanatage, intellectual capital has significant effect on competitive advantage, competitive advantage have a impact on business performance. Competitive advanatge is not able to mediating entrepreneurial orientation on business performance, competitive advantage is not able mediaitng intellectual capital on business performance. CONCLUSION 2025 Thailand ICPM August 20 – 21, 2025
THANK YOU! 2025 Thailand ICPM August 20 – 21, 2025