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Human Capital, Self-Efficacy and Firm Performance: A Study of Bumiputera SMEs in Malaysia

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  • Nurul Naziha Zuhir
  • Ehsan Fansuree Surin
  • Hardy Loh Rahim

Abstract

SMEs represent more than 90 percent of the establishment in many countries including Malaysia. However, from 98.5 percent of SMEs establishment, only 37 percent represent bumiputera SMEs. Human capital and self-efficacy are identified as internal factors of the organisation and function as a possible solution to address bumiputera SMEs¡¯ difficulties. Hence, the primary objective of this study is to investigate the mediating effect of self-efficacy in the interaction between human capital and the SMEs performance in Malaysia. This study has investigated 203 Malay-owned small and medium enterprises. Structural Equation Modelling (SEM) was employed to analyse the data. The results demonstrated that human capital and self-efficacy influence each other and have a significantly positive impact on firm performance. Mediation simultaneously affirms that the relationship between human capital and firm performance is mediated by self-efficacy. This study concluded that these two internal factors can provide a holistic model to improve bumiputera SMEs performance in Malaysia.

Suggested Citation

  • Nurul Naziha Zuhir & Ehsan Fansuree Surin & Hardy Loh Rahim, 2019. "Human Capital, Self-Efficacy and Firm Performance: A Study of Bumiputera SMEs in Malaysia," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 10(6), pages 218-231, October.
    • Handle: RePEc:jfr:ijfr11:v:10:y:2019:i:6:p:218-231
    DOI: 10.5430/ijfr.v10n6p218
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    References listed on IDEAS

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    2. Muhammad Khalique & Shazali Abu Mansor, 2016. "Intellectual capital in Malaysian hotel industry: a case study of Malacca," International Journal of Business Performance Management, Inderscience Enterprises Ltd, vol. 17(1), pages 103-116.
    3. Sascha O. Becker, 2018. "Education and Human Capital," Palgrave Studies in Economic History, in: Matthias Blum & Christopher L. Colvin (ed.), An Economist’s Guide to Economic History, chapter 15, pages 121-131, Palgrave Macmillan.
    4. Gary S. Becker, 1975. "Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education, Second Edition," NBER Books, National Bureau of Economic Research, Inc, number beck75-1.
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