Impact of Entrepreneurial Leadership on Large Manufacturing Companies Sustainable Performance: Evidence From Large Manufacturing Companies in Ethiopia

ABSTRACT The objective of this study is to thoroughly investigate the impact of entrepreneurial leadership on the sustainable performance of large manufacturing companies in Ethiopia. The study investigated the impact of entrepreneurial leadership on the sustainable performance of large manufacturing companies using leader innovation behavior as a mediating role. Survey data were collected using five‐point Likert scale questionnaires, and a simple random sampling technique was deployed to determine a sample size of 286 large manufacturing companies from 1000 large manufacturing companies in the selected areas. A total of 572 samples were drawn (two respondents from each manufacturing company). However, only 501 (87.58%) of the 572 distributed questionnaires were filled and used for the data analysis using partial least squares structural equation modeling (PLS‐SEM) to predict the outcome. The study used SmartPLS4 4.1.0.9 software to analyze higher‐order formative constructs and reflective constructs using a cross‐sectional research design. The result of this study shows that entrepreneurial leadership practices have positive and significant correlations with sustainable performance outcomes such as economic, social, and environmental aspects of large manufacturing companies. Furthermore, the mediation analysis confirms that entrepreneurial leadership practices in large manufacturing companies have indirect positive relationships and are statistically significant with sustainable performance through Leader Innovation Behavior (LIB). Furthermore, the findings of this study depicted that there is a significant contribution to the existing literature on entrepreneurial leadership and sustainable performance practices by emphasizing the benefits of integrating leader innovation behavior to improve large manufacturing company performance as unique research findings from previously conducted studies. Therefore, it will help policymakers to use the study results to develop frameworks that promote entrepreneurial leadership practices from social, economic, and environmental perspectives for large manufacturing companies in creating an innovation‐based manufacturing, entrepreneurial‐oriented mindset leaders, resilient economy for a sustainable future.