How internal capabilities influence MSME export capability: the mediating role of entrepreneurial orientation

Purpose Micro, small and medium enterprises (MSMEs) are crucial for economic growth in developing countries like Indonesia. However, many MSMEs face difficulties when trying to enter international markets, mainly because of limited resources and strategic capabilities. This study aims to investigate the internal mechanisms that affect the export capabilities of MSMEs, focusing on technological, innovation and entrepreneurial orientation. Using the resource-based view (RBV) as a framework, this study examines how entrepreneurial orientation affects the relationship between technological and innovation capabilities and export readiness. Design/methodology/approach This study used a quantitative approach, distributing questionnaires to MSMEs in West Java. Data were collected from 400 respondents using purposive sampling technique, exceeding the minimum sample size calculated using G*Power. The data were then analyzed using partial least squares-structural equation modeling (PLS-SEM) to examine cause-and-effect relationships among the constructs. Findings The results indicate that entrepreneurial orientation has a significant positive effect on export capability. Innovation capability enhances entrepreneurial orientation; however, it does not directly affect export capability. Its influence is entirely mediated by entrepreneurial orientation. Technological capability directly enhances export capability; however, it does not affect entrepreneurial orientation, suggesting its role is primarily operational rather than strategic. The results indicate that entrepreneurial orientation is the primary mechanism for converting innovation into export readiness, whereas technological capability primarily enhances operational efficiency and compliance with export standards. Originality/value This research adds to the existing knowledge in international entrepreneurship by examining how internal capabilities affect the export capabilities of MSMEs in developing countries. It highlights the importance of behavioral factors in how a firm’s capabilities translate into international market participation, thus expanding the RBV within the context of SME internationalization. This study distinguishes between the strategic and operational aspects of export readiness. It provides insights into how capabilities develop and informs policies and management strategies that support MSMEs in international markets.