Impact of entrepreneurial skills on the firm's performance: evidence from manufacturing SMEs in India

Several studies show that most small and medium businesses fail within their first five years. Although the role of factors such as access to funds and culture has been widely studied, the influence of owner/manager practices and capabilities have generally been ignored. This study has empirically tested a framework identifying the causal links among personal skills, entrepreneurial skills, business skills, and technical skills on firm's performance based on a sample of 360 manufacturing SMEs operating in the manufacture of machinery and equipment, packaging, automobile, and metal processing in India. Test of hypothesis indicate that personal skills, business skills and technical skills were positively related to the firm's performance of SMEs, whereas, entrepreneurial skills were not positively related to firm's performance of SMEs.