ENTREPRENEURIAL BUDGETING AS A STRATEGIC LEVER: MEDIATING THE INFLUENCE OF ENTREPRENEURIAL COMPETENCY AND CHARACTER ON MSME SUCCESS IN EMERGING ECONOMIES

Abstract In the face of growing uncertainty and competitiveness in emerging economies, the success of Micro, Small, and Medium Enterprises (MSMEs) hinges not only on the entrepreneurial capacities of their leaders but also on their strategic financial behavior. This study investigates how entrepreneurial budgeting functions as a mediating mechanism between entrepreneurial competency, entrepreneurial character, and MSME performance. Drawing upon Resource-Based Theory and Behavioral Strategy perspectives, we propose a conceptual framework in which budgeting practices, when driven by entrepreneurial insight and discipline, act as a strategic lever to convert personal competencies into tangible business outcomes. A survey was conducted among 300 MSME owners in Manado, Indonesia, using a structured questionnaire capturing entrepreneurial traits, budgeting behavior, and firm performance indicators. Data were analyzed using Structural Equation Modeling (SEM). The findings reveal that entrepreneurial budgeting plays a statistically significant mediating role in the relationship between both entrepreneurial competency and character with MSME success. This mediation suggests that entrepreneurial traits alone may be insufficient to improve business performance unless channeled through sound financial planning and strategic budgeting practices. The study contributes to the literature by integrating cognitive-behavioral perspectives with financial decision-making in entrepreneurship. It underscores the importance of promoting entrepreneurial budgeting as a vital capability within MSMEs to enhance their resilience, scalability, and long-term value creation in emerging markets. Implications for practitioners and policymakers include the need to embed budgeting literacy into entrepreneurial training programs and to recognize entrepreneurial budgeting as a core competency for MSME development.