Does Performance Matter for Business Survival Based on the Enhancement of Locus of Control and Business Competence? The Case of Micro Small and Medium Enterprises

This study examines and analyzes the mediating effects of business performance on the influences of locus of control and business competence on business survival, taking the case of Micro, Small and Medium Enterprises (MSMEs) in Banda Aceh City, Indonesia. Of the 743 MSMEs engaged in various business sectors, this study only selected 192 MSMEs involved in the creative economy as the research samples. By using the Structural Equation Modeling (SEM) technique, the study documented that the strengthening of locus of control has a significant impact on the business performance and the business survival of the MSMEs. Furthermore, entrepreneurial competence is also found to have a significant positive impact on the business performance and the business continuity of the MSME. Finally, the study also recorded the mediating effects of business performance on the influences of locus of control and business competence on the business survival of the MSMEs. The results of this study indicate that to ensure business continuity, the focus must be given to improving the performance of MSMEs through the increased locus of control and employee competency.