The influence of human capital on market orientation and micro, small, and medium enterprises (MSMEs) performance
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Abstract
MSMEs must adapt to globalization and competition, with human resources being crucial for profitability. In Kupang City, MSME actors struggle with competitive strategies, innovation, and collaboration due to low education and skills. This study investigates the impact of human capital on market orientation and performance among 99 MSME actors, using stratified random sampling and Partial Least Squares (PLS) analysis. Results indicate that human capital significantly influences market orientation (49.5% correlation) and MSME performance (path coefficient of 0.228, t-statistic of 2.518, p-value = 0.012). Market orientation also positively affects performance (path coefficient of 0.438, t-statistic of 4.465, p-value = 0.000). The model shows good predictability (R-squared of 0.245 for market orientation and 0.343 for performance). The study concludes that enhancing human capital and adopting effective market orientation strategies are vital for MSME performance improvement, providing empirical support for the literature on these factors in developing countries like Kupang City
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Pane, A. S. ., J. Kamuri, K. ., Manongga, I. R. . and Anabuni, A. U. . (2025) “The influence of human capital on market orientation and micro, small, and medium enterprises (MSMEs) performance ”, Jurnal Mantik, 9(2), pp. 450-460. doi: 10.35335/mantik.v8i6.6553.
References
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Kolar, T. (2006). Benchmarking Market Orientation of Banks in Transitional Markets. International Journal of Bank Marketing, 24(2), 76–97. https://doi.org/10.1108/02652320610649905
Linda Sutanto, Bambang Tjahjadi, & Fiona Niska Dinda Nadia. (2023). The Impact of Human Capital Readiness on Business Performance?: The Mediating Role of Innovation Capability. Journal of Accounting Science, 7(2). https://doi.org/10.21070/jas.v7i2.1725
Nezakati, H., Abbasian Fereidouni, M., Abd Rahman, A., & Malaysia, P. (2016). An Evaluation of Government Role in Green Supply Chain Management through Theories. International Journal of Economics and Financial Issues |, 6(S6), 76–79. http:www.econjournals.com
Nugroho, A. W., & Susilo, A. (2025). Peluang dan Tantangan Pengembangan Usaha Mikro Kecil Menengah (UMKM) dari Berbagai Aspek Ekonomi. Al Qalam: Jurnal Ilmiah Keagamaan Dan Kemasyarakatan, 19(1), 575. https://doi.org/10.35931/aq.v19i1.4322
Rennath, M. S., & Wijaya, H. (2024). Pengaruh Intangible Assets Terhadap Firm Value Di Indonesia. Jurnal Paradigma Akuntansi, 6(1), 279–289. https://doi.org/10.24912/jpa.v6i1.29923
Sepahvand, R., Mousavi, S. N., & Shahsiah, N. (2015). The Effect of Intellectual Capital on Market Orientation According To the Role of Knowledge Sharing Mediator Variable (Supervision of Insurance Companies in Lorestan Province). Applied Science Reports, 12(1). https://doi.org/10.15192/PSCP.ASR.2015.12.1.18
Sitepu, D. B., Anhar, Z. Y., & Putra, T. R. A. (2025). Pengembangan Sdm Berbasis Teknologi: Strategi Peningkatan Produktivitas Umkm Di Era Digital. Jurnal Ekonomika Dan Bisnis (JEBS), 5(2), 522–526. https://doi.org/10.47233/jebs.v5i2.2707
Urbach, N., & Ahlemann, F. (2010). Structural Equation Modeling in Information Systems Research Using Partial Least Squares (Vol. 11, Issue 2).
Wójcik-Karpacz, A., Karpacz, J., & Rudawska, J. (2021). The impact of market orientation on the performance of MSMEs operating in technology parks: The role of market dynamism. Journal of Entrepreneurship, Management and Innovation, 17(2), 29–52. https://doi.org/10.7341/20211722
WU, X., & Sivalogathasan, V. (2013). Innovation Capability for better Performance: Intellectual Capital and Organization Performance of the Apparel Industry in Sri Lanka. Journal of Advanced Management Science, 1(3), 273–277. https://doi.org/10.12720/joams.1.3.273-277
Amin, M., Thurasamy, R., Aldakhil, A. M., & Kaswuri, A. H. Bin. (2016). The effect of market orientation as a mediating variable in the relationship between entrepreneurial orientation and SMEs performance. Nankai Business Review International, 7(1), 39–59. https://doi.org/10.1108/NBRI-08-2015-0019
Augusto Felício, J., Couto, E., & Caiado, J. (2014). Human capital, social capital and organizational performance. Management Decision, 52(2), 350–364. https://doi.org/10.1108/MD-04-2013-0260
Beneke, J., Blampied, S., Dewar, N., & Soriano, L. (2016). The impact of market orientation and learning orientation on organisational performance. Journal of Research in Marketing and Entrepreneurship, 18(1), 90–108. https://doi.org/10.1108/JRME-06-2015-0033
Boso, N., Cadogan, J. W., & Story, V. M. (2013). Entrepreneurial Orientation and Market Orientation as Drivers of Product Innovation Success: A Study of Exporters From a Developing Economy. International Small Business Journal: Researching Entrepreneurship, 31(1), 57–81. https://doi.org/10.1177/0266242611400469
Darmawan, D., Sari, P. N. L., Jamil, S. A., & Mardikaningsih, R. (2023). Penerapan Manajemen Strategi: Kontribusi Orientasi Pasar Dan Orientasi Teknologi Terhadap Kinerja Bisnis UMKM. Journal of Management and Economics Research, 1(2), 64–70. https://doi.org/10.62866/jomer.v1i2.70
Edelia, A., & Aslami, N. (2022). The Role of Empowerment of The Cooperative and MSMEs Office in The Development of Small and Medium Micro Enterprises In Medan City. Marginal?: Journal Of Management, Accounting, General Finance And International Economic Issues, 1(3), 31–36. https://doi.org/10.55047/marginal.v1i3.163
F. Hair Jr, J., Sarstedt, M., Hopkins, L., & G. Kuppelwieser, V. (2014). Partial Least Squares Structural Equation Modeling (PLS-SEM). European Business Review, 26(2), 106–121. https://doi.org/10.1108/EBR-10-2013-0128
Febriyani, A., & Rita, M. R. (2022). Determinan Kinerja UMKM: Fintech Lending, Modal Usaha dan Orientasi Pasar. AFRE (Accounting and Financial Review), 5(2), 131–139. https://doi.org/10.26905/afr.v5i2.7761
Fiqih Maria Rabiatul Hariroh, Nur Azis, Prasetyo Hari Sandi, Novi Fitria Hermiati, & Winda Aprilia. (2024). Peranan Kompetensi Sumber Daya Manusia Umkm Dalam Meningkatkan Kinerja Umkm. Jurnal Pengabdian Bersama Masyarakat Indonesia, 2(1), 48–54. https://doi.org/10.59031/jpbmi.v2i1.303
Harahap, M. A. K., Apramilda, R., Wahyuningratna, R. N., Husaini, H., Ariyanti, R., & Hendratni, T. W. (2025). Peran Kompetensi SDM, Adopsi Teknologi dan Kolaborasi Dalam Organisasi?: Upaya Penguatan UMKM Indonesia. Jurnal Pengabdian Masyarakat Dan Riset Pendidikan, 3(4), 5288–5293. https://doi.org/10.31004/jerkin.v3i4.1382
Iqbal, M., Mawardi, M. K., Sanawiri, B., Alfisyahr, R., & Syarifah, I. (2023). Strategic orientation and its role in linking human capital with the performance of small and medium enterprises in Indonesia. Journal of Research in Marketing and Entrepreneurship, 25(3), 514–542. https://doi.org/10.1108/JRME-11-2021-0150
Jihan Fatin Fadillah Lotte, Reni Oktavia, Ratna Septiyanti, & Aryan Danil Mirza BR. (2025). Optimalisasi Transformasi Digital pada Strategi Pemasaran Usaha Mikro Kecil dan Menengah (UMKM) di Kota Bandarlampung. Jurnal Ekonomi Dan Pembangunan Indonesia, 3(2), 61–70. https://doi.org/10.61132/jepi.v3i2.1331
Jogaratnam, G. (2018). Human Capital, Organizational Orientations and Performance: Evidence From the Restaurant Industry. International Journal of Hospitality & Tourism Administration, 19(4), 416–439. https://doi.org/10.1080/15256480.2017.1348920
Kahveci, E. (2025). Digital Transformation in SMEs: Enablers, Interconnections, and a Framework for Sustainable Competitive Advantage. Administrative Sciences, 15(3), 107. https://doi.org/10.3390/admsci15030107
Kharabsheh, R. A., Jarrar, K., & Simeonova, B. (2015). The impact of competitive strategies on responsive market orientation, proactive market orientation, learning orientation and organizational performance. Journal of Strategic Marketing, 23(5), 423–435. https://doi.org/10.1080/0965254X.2014.970217
Kolar, T. (2006). Benchmarking Market Orientation of Banks in Transitional Markets. International Journal of Bank Marketing, 24(2), 76–97. https://doi.org/10.1108/02652320610649905
Linda Sutanto, Bambang Tjahjadi, & Fiona Niska Dinda Nadia. (2023). The Impact of Human Capital Readiness on Business Performance?: The Mediating Role of Innovation Capability. Journal of Accounting Science, 7(2). https://doi.org/10.21070/jas.v7i2.1725
Nezakati, H., Abbasian Fereidouni, M., Abd Rahman, A., & Malaysia, P. (2016). An Evaluation of Government Role in Green Supply Chain Management through Theories. International Journal of Economics and Financial Issues |, 6(S6), 76–79. http:www.econjournals.com
Nugroho, A. W., & Susilo, A. (2025). Peluang dan Tantangan Pengembangan Usaha Mikro Kecil Menengah (UMKM) dari Berbagai Aspek Ekonomi. Al Qalam: Jurnal Ilmiah Keagamaan Dan Kemasyarakatan, 19(1), 575. https://doi.org/10.35931/aq.v19i1.4322
Rennath, M. S., & Wijaya, H. (2024). Pengaruh Intangible Assets Terhadap Firm Value Di Indonesia. Jurnal Paradigma Akuntansi, 6(1), 279–289. https://doi.org/10.24912/jpa.v6i1.29923
Sepahvand, R., Mousavi, S. N., & Shahsiah, N. (2015). The Effect of Intellectual Capital on Market Orientation According To the Role of Knowledge Sharing Mediator Variable (Supervision of Insurance Companies in Lorestan Province). Applied Science Reports, 12(1). https://doi.org/10.15192/PSCP.ASR.2015.12.1.18
Sitepu, D. B., Anhar, Z. Y., & Putra, T. R. A. (2025). Pengembangan Sdm Berbasis Teknologi: Strategi Peningkatan Produktivitas Umkm Di Era Digital. Jurnal Ekonomika Dan Bisnis (JEBS), 5(2), 522–526. https://doi.org/10.47233/jebs.v5i2.2707
Urbach, N., & Ahlemann, F. (2010). Structural Equation Modeling in Information Systems Research Using Partial Least Squares (Vol. 11, Issue 2).
Wójcik-Karpacz, A., Karpacz, J., & Rudawska, J. (2021). The impact of market orientation on the performance of MSMEs operating in technology parks: The role of market dynamism. Journal of Entrepreneurship, Management and Innovation, 17(2), 29–52. https://doi.org/10.7341/20211722
WU, X., & Sivalogathasan, V. (2013). Innovation Capability for better Performance: Intellectual Capital and Organization Performance of the Apparel Industry in Sri Lanka. Journal of Advanced Management Science, 1(3), 273–277. https://doi.org/10.12720/joams.1.3.273-277
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