No exit, still loyal? Kinship employee engagement in the face of psychological entrapment

Purpose This study aims to examine how toxic leadership and interpersonal conflict are associated with knowledge hiding through psychological entrapment among creative industry MSME employees and investigates financial vulnerability as an intensifier of entrapment and kinship employee engagement (KEE) as a culturally embedded factor that may weaken knowledge hiding. Design/methodology/approach Data were collected from 317 employees of creative MSMEs in Lampung, Indonesia, using purposive sampling. Hypotheses were tested with covariance-based structural equation modeling (CB-SEM). Findings Toxic leadership and interpersonal conflict are positively associated with psychological entrapment, which in turn is positively associated with knowledge hiding. Mediation occurs for toxic leadership but not for interpersonal conflict. Financial vulnerability strengthens the positive associations of both predictors with entrapment, while KEE weakens the positive association between entrapment and knowledge hiding. Research limitations/implications Several limitations should be considered when interpreting these findings. First, the cross-sectional design limits firm conclusions about causality. Future studies using longitudinal or diary methods could better reveal how psychological entrapment forms and changes over time within MSMEs. Second, the use of self-reported data may introduce perceptual bias. However, the presence of interaction effects, which are generally less sensitive to such bias, reduces this concern to some extent. Practical implications MSME owners and managers should reduce dominating leadership practices, manage interpersonal tensions and enhance employee security. Strengthening kinship-based engagement is a culturally aligned strategy to maintain cooperative knowledge exchange. Social implications By showing how economic vulnerability and relational climate shape defensive behaviors, this study supports the development of healthier work communities where solidarity and mutual care discourage knowledge withholding Originality/value This study examines psychological entrapment as a potential mechanism linking relational adversity to knowledge hiding in MSMEs, while integrating financial vulnerability and KEE as contextual moderators.