Objective - This study aims to examine the role of Market Learning Orientation (MLO) and Entrepreneurial Orientation (EO) in enhancing Innovation Capability (IC) to sustain the performance of Micro, Small, and Medium Enterprises (MSMEs) in Malaysia, specifically in the Fruits and Vegetables (FFV) contract farming sector.

Methodology/Technique - Using a quantitative approach, primary data were collected from 228 FFV MSMEs through structured questionnaires. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) to test the relationships between MLO, EO, IC, and firm performance.

Findings and Novelty - The results reveal that both MLO (β = 0.156, p < 0.05) and EO (β = 0.565, p < 0.01) significantly enhance IC, which, in turn, positively influences firm performance (β = 0.265, p < 0.05). While MLO and EO do not directly impact performance, their mediated effects through IC are significant. This study contributes to the literature by emphasizing the pivotal role of IC as a mediator in translating strategic orientations into measurable business outcomes. It offers practical insights for MSMEs to prioritize innovation and for policymakers to design programs fostering strategic and innovative practices.

Type of Paper - Empirical Paper

Keywords: Market Learning Orientation, Entrepreneurial Orientation, Innovation Capability, MSME Performance, Fruits and Vegetables Contract Farming, Malaysia, Business Sustainability.

JEL Classification: G21, L26, O16.

URI: http://gatrenterprise.com/GATRJournals/JMMR/vol9.4_4.html

DOI: https://doi.org/10.35609/jmmr.2024.9.4(4)

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