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Scientific African 11 (2021) e00664
Contents lists available at ScienceDirect
Scientific African
journal homepage: www.elsevier.com/locate/sciaf
Creating as an entrepreneurial competence, innovation and

performance of value-system actors in Kenya’s leather
industry
Simon Kamuri
Jomo Kenyatta University of Agriculture and Technology, Nairobi CBD Campus, P.O. Box 62000, 00200 Nairobi, Kenya
a r t i c l e i n f o a b s t r a c t
Article history: The purpose of this paper was to explore creating as a behavioural attribute of en-
Received 5 August 2020 trepreneurship and its relationship with innovation and performance outcomes from an
Revised 2 September 2020
industry ecosystem perspective. A mixed design approach was adopted which involved ex-
Accepted 9 December 2020
ploration of the creating, innovation and performance constructs as adapted from previous
studies, and a diagnosis of their hypothesized relationship. Quantitative data was collected
Keywords: in a mixed sampling of fifty-eight Nairobi-based Leather Articles Entrepreneurs Associa-
Creating tion (LAEA) members and ten industry support organizations. A seventy-six percent re-
Entrepreneurial competence sponse rate was achieved from leaders as key informants of a representative sample of
Innovation the leather value-system actors in Kenya. Instrument reliability was established using the
Value-system actors Delphi Technique and a pilot study (Cronbach’s Alpha 0.717 – 0.761). Principal Component
Leather industry
Analysis was used to explore the constructs before inferential analysis.
Performance
Entrepreneurial ecosystem The study showed creating, innovation and performance as valid constructs. Creating and
innovation had a significant and positive causal relationship with performance of value-
system actors in Kenya’s leather industry (R2 =0.135 p<0.05). Further, innovation fully me-
diated the creating-performance link. Therefore, creating, innovation and performance can
be studied as valid entrepreneurial attributes of value-system actors in an industry ecosys-
tem. Creating can be understood as an entrepreneurial competence construct comprising
six behavioural indicators. This paper recommends the development of creating as a com-
petence for value-system actors in an industry through training and policies for improved
competitiveness. In addition, the validity variables studied as entrepreneurial attributes,
their relationships and the methodology applied here should be tested further in diverse
industries.
© 2020 The Author(s). Published by Elsevier B.V. on behalf of African Institute of
Mathematical Sciences / Next Einstein Initiative.
This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/)
Background of the study
There exists a huge untapped global and domestic market potential for growth in Kenya’s Leather industry that needs to
be exploited for national social-economic welfare (United Nations Industrial Development Organization [74], 2010; Interna-
E-mail address: kamurisimon@gmail.com
https://doi.org/10.1016/j.sciaf.2020.e00664
2468-2276/© 2020 The Author(s). Published by Elsevier B.V. on behalf of African Institute of Mathematical Sciences / Next Einstein Initiative. This is an
open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
S. Kamuri Scientific African 11 (2021) e00664
tional Trade centre [29], 2011). The industry has had declining production of manufactured leather goods, such as footwear,
due to global competitiveness pressures from cheap second-hand imports (Mitumba), non-leather substitutes and more ef-
ficient producers [26]. This despite having comparative resource advantages such as labor and raw-materials [8,54]. This
paradox of and industry with great opportunity and potential being faced with poor performance in a competitive market
then presents a problem to be resolved. Building of innovation and entrepreneurship, and involvement of diverse players has
been suggested as one of the solutions to improving competitiveness of the Kenyan and regional leather industry [26,53].
Entrepreneurship is seen as crucial in determining the competitiveness and therefore performance of firms, industries
(and economies) in this dynamic global economy [2,7]. Entrepreneurial ecosystems are hotbeds of innovations [19]. The
need to adopt an entrepreneurial culture in raising competitiveness and performance in agro-food industry from a value-
chain perspective has been argued by Adhikari [3]. The need to have a multiple sector and actor interactions in industry
clusters and entrepreneurial ecosystems has been observed by Li et al. [44]. Thus, there is a need to study entrepreneurship
from an ecosystem perspective, including abilities of diverse industry players, in order to understand the relationship with
performance.
Creating is seen as crucial for the ubiquitous innovation outputs in entrepreneurship. An entrepreneur is one who creates
[15] and is indispensable to the understanding of entrepreneurial phenomenon. In turn, the practice of innovation is seen
as a path to firm growth performance, one that fortifies economic growth and offers solutions to economic and social
challenges [4]. In the S-Curve of Entrepreneurship, Acs et al. [2] assert that innovation-driven entrepreneurship should be a
goal as it results in higher future economic development than efficiency-driven, and less so factor-driven entrepreneurship.
Dinh and Clarke [21] empirical study confirm that innovation is associated with better firm performance.
Cassia et al. [17] assert that “from a market, organizational or whole industry viewpoint, the entrepreneurial phenomenon
is always strictly related to individual action, that of the entrepreneur”. McMullan and Kenworthy [50] affirm other scholars’
assertion that entrepreneurship is a creative endeavor. McCelland’s seminal study in 1964 on creativity as a psychological
trait shared by entrepreneurs has been affirmed by various scholars [42]. In presenting the General Theory of Entrepreneurial
Creativity (GTEC), McMullan and Kenworthy [50] assert that entrepreneurial creativity is the primary causative variable of
entrepreneurial outcomes. They present entrepreneurial creativity as a multi-dimensional variable that is actualized through
performance outcomes. Creating is often studied as creativity, an entrepreneurial orientation. However, in this study, creating
is studied as an entrepreneurial competence. Further, innovation is seen as an outcome of entrepreneurship which mediates
the relationship between entrepreneurial actions such as creating, and venture performance.
Study objectives
Given the aforementioned observations on the role of creating and innovation in entrepreneurship and the potential
influence on performance of entrepreneurial ecosystems, two research objectives were formulated. First, to determine the
relationship between creating as an entrepreneurial competence and performance of value-system actors in Kenya’s leather
industry, and second, to determine the mediating effect of innovation in the relationship between creating as an en-
trepreneurial competence and performance of value-system actors in Kenya’s leather industry.
Literature review
Conceptual issues
Theoretical perspectives on entrepreneurship

Entrepreneurship can be looked at from three perspectives; the individual or the entrepreneur, the firm and the environ-
ment in which the firm operates [41,47,64,79]. The interplay of these three facets determine to a large extent, the success
of any entrepreneurial undertaking [41]. Carlsson et al. [16] assert that entrepreneurship research is multi-dimensional with
individual, team, venture, firm and macroeconomic levels of analysis. Further presence of social, economic, geographic and
industry clusters may influence entrepreneurship at all levels. Due to its fragmented perspectives (not to mention philo-
sophical underpinnings separating explorative from exploitative entrepreneurship) arising from relevance to diverse disci-
plines, various authors have noted that entrepreneurship lacks a common comprehensive theoretical framework and re-
search paradigm [16].
Rwigema and Venter [67] define entrepreneurship as “the process of conceptualizing, organizing, launching, and –
through innovation – nurturing a business opportunity into a potentially high growth venture in complex, unstable en-
vironment”. According to Timmons and Spinelli [71], entrepreneurship is a way of thinking, reasoning, and acting which
opportunity obsessed, holistic in approach, and shows leadership balance and purpose. According to Hisrich et al. [28], en-
trepreneurship is a dynamic process of creating incremental wealth. Individuals who assume the major risks in terms of
equity, time and/or career commitment to provide value for some product or service create the wealth. The entrepreneur is
therefore a person who creates new user value [12]. An entrepreneur is one who creates [15] and is indispensable to the un-
derstanding of entrepreneurial phenomenon. Cassia et al., [17] assert that “from a market, organizational or whole industry
viewpoint, the entrepreneurial phenomenon is always strictly related to individual action, that of the entrepreneur”. Thus,
entrepreneurship is associated with an individual and has given wealth outcomes. Kuratko [42] argues that entrepreneurship
2
“is a dynamic process of vision, change and creation that requires application of energy and passion toward the creation and
implementation of new ideas and creative solutions”. Thus, beyond venture creation, entrepreneurship involves continuous
explorative creation needed to respond to a dynamic environment. The entrepreneur then is one who recognizes and seizes
opportunities to convert creative ideas into value-added solutions through effort and risk-taking in a competitive market
place.
Given the centrality of entrepreneurship in dynamism of social and economic development and the lack of a compre-
hensive theoretical framework, this research would contribute to our understanding and delineation of entrepreneurship
as a discipline. Carlsson et al. [16] observe that there is need for research into interactions between entrepreneurship (en-
trepreneurs and their entrepreneurial activities) and other actors, institutions, norms, laws, innovation systems and industrial
clusters in yielding fruitful social welfare outcomes.
Creativity theory
Creativity is production of novel ideas, items or outcomes from combining diverse and often unrelated inputs (infor-
mation, ideas, objects) for given appropriate purposes [5,11,33]. There are no single theories to explain creativity nor the
related concept of innovation. Instead, existing ones are based on diverse approaches such as psychoanalytic, behaviourism
and humanistic models in psychology; developmental, evolutionary and economic in other social sciences [11,33].
These theories have the common thread that creativity has four dimensions: the creative person, the creative product,
the creative process and the environment in which creativity takes place but largely fail to agree on the source or process of
creativity [5,11,33]. The componential theory of creativity is propounded as a comprehensive model for guiding the process
of creative work in an individual linking it to personal motivation, competencies and organizational innovation [5]. Jon-
Arild [31] weaved systems thinking, action theory and motivation theory to explain innovation processes in organizations.
Innovation is defined as “the application of new ideas with the aim of creating value” and therefore implicitly linked to the
outcomes of creativity. Jon-Arild [31] not only extends the typologies of innovation to seven (three institutional: political,
cultural, social, and four economic: organizational, material, service and market innovations) but also asserts the importance
of economic and other systems in providing linkages for success.
Creating as an entrepreneurial competence

Creating can be distinguished from creativity. The latter is often studied only as a cognitive entrepreneurial attribute.
Creativity in entrepreneurship is the ability of create, while creating is a competence in that it can be developed and im-
proved [42]. What Lans et al. [43] acknowledges as a conceptual competence of analyzing (interpreting and inferring) is
only one dimension of creating whose other dimension is synthesis. In psychology, creativity has dimensions of original-
ity and functional value [20]. Weinzimmer et al. [75] argue that the creativity-performance link in organizations should
be understood as being mediated by action orientation, or a firm’s ability to implement creative ideas. Gartner and Baker
[23] allude to the fact that entrepreneurial re-configuration of resources for the pursuit and development of business oppor-
tunities is a product of an entrepreneur’s imagination. This research chooses the perspective that the outward expression
of this imagination in entrepreneurship is entrepreneurial creation (creating in entrepreneurship is imagination applied as
entrepreneurial ideas). McMullan and Kenworthy [50] reveals that various scholars have used diverse creativity measures,
often with cognitive perspectives.
This study adapted the creating competence from Lans et al. [43] three-factor entrepreneurial competence model. An-
alyzing as presented by Lans et al. [43] is considered as only a part of the more crucial competence of creating. Further,
creativity qualifies as a competence in that it can be learnt. The perspective adopted by this study is one of analysis being
a psychological (cognitive) part of broader of creating competence which involves not only analyzing but also synthesizing
to come up with original ideas that are of functional value. Therefore, this study selects creating, as opposed to analysis, as
an entrepreneurial competence. The creating dimension is thus developed and defined in this study as “the conceptual and
behavioural competence of analyzing and synthesizing seemingly unrelated concepts of a situation to understand relation-
ships, infer implications of components and develop novel combinations that can be applied”. Creating is an entrepreneurial
competence when it involves reconfiguring resources (for example physical or knowledge) for pursuit of business opportu-
nities. It involves separating or analyzing information, using different perspectives and sources of ideas and combining the
same to come up with creative solutions in business activities.
Most studies do not show clear distinction between entrepreneurial cognitive dispositions (orientation) and behaviours
(competence), least of all creating as a competence. Lans et al. [43] is one of the few studies that delineates and measures
competencies. Despite recognition of individual (micro-level) and institutional (macro-level) dimensions of entrepreneur-
ship, Acs et al. [2] entrepreneurship pillars do not make a good distinction between psychological or cognitive and compe-
tence dimensions such as when opportunity perception and start-up skills are classified as entrepreneurial attitudes. Lans
et al. [43] three-factor model of entrepreneurial competence, which is empirically tested and supported by theoretical liter-
ature, identifies analysis as a competence from which creating is adapted in this study. Further, various studies show that
entrepreneurial characteristics, especially creativity orientation and creating competence, have a causal link with innova-
tion, and subsequently with performance [12,28,50]. Creating indicators for this study were thus adapted from Lans et al.
[43] measurement of analyzing.
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Fig. 1. The leather industry value-chain.
Table 1
Examples of leather industry value-system roles.
Value-system Role Value-addition Activities
Primary Processing Tanners

Secondary Delivery Local traders of finished leather
Secondary Processing Leather-goods manufacturers
Tertiary Delivery Retailers and exporters of manufactured leather products
Industry Networking Support Industry associations
Policy and Regulatory Support Industry policy formation, regulation and research
Research Support Leather research and education
Researcher’s own classification.
Value-system actors in Kenya’s leather industry

Mwinyihija [53] discussed the leather industry value-chain in Kenya to consist of different ‘strata’ of actors with sub-
groups, namely producers (livestock breeders), butchers, hides and skins traders, tanners, footwear and leather goods manu-
facturers. The study by Hansen et al. [26] on the leather industry in Kenya and has delineated the industry based on product
flow from supply of hides and skins to downstream value-addition activities. These are illustrated as the leather value-chain
in Fig. 1. Economic analysis practice classifies production and trade of hides and skins under agriculture sector while pro-
duction of leather from tanning is a manufacturing activity [73]. Mwinyihija [53] acknowledges the role of government in
and regulation through policy intervention in determining the industry’s socioeconomic performance.
An examination of the value-addition actors along the industry’s product flow (leather) needs to be complemented with
other stakeholders with support roles such as policy regulation, research agents and industry associations to capture the
entire industry ecosystem – or value-system – as elaborated in Table 1. The entire collection of value-addition actors in
leather therefore comprises the value-system as propounded by Porter [61]. Given the aforementioned, this study considers
the leather industry value-system boundaries to be defined by leather as a core-product whose actors have performance
goals have this product as central.
Innovation by value-system actors

Kuratko [42] defines innovation as the process by which entrepreneurs convert ideas or opportunities into marketable
solutions. Innovation involves creativity and is seen as and as central to entrepreneurial endeavours. In his conceptualization
of entrepreneurship, Bjerke [12] avers that creativity, innovation and entrepreneurship are linked as follows: creativity comes
up with new ideas, innovation applies these new ideas while entrepreneurship is coming up with new applications which
others can use as well to fill a need and / or satisfy some demand, whether existing or created.
Dinh and Clarke [21] studied input, product, process, delivery and market innovations. Al-Ansari [4] studied similar in-
dicators of innovation practices (“trial of new ideas, introduction of new innovations, pioneer nature of marketing new
innovations, management search of new systems and methods, creative in methods of operation, usage of up-to-date tech-
nologies, development of new market segments, usage of new marketing methods, new ways of establishing relationships
with customers, and spending resources on research and development for new innovations”) as an intervening determinant
of business growth performance.
Keeley et al. [34] discuss ten types of innovation ranging in focus from internal to external in terms of distance from
customer experiences. Seven types of innovation can be gleaned from literature cited above and are hereby paraphrased
by the researcher. These are input innovations (introducing new sources of raw material or inputs in a process), product
innovations (a new or improved product offering), process innovation (new procedures for production), management innova-
tions (administrative procedures and policies), organizational innovations (new organizational forms, structures or cultures),
delivery innovations (new ways of delivering value, including peripheral support services) and system innovations (changes
in system components relationships in a bigger entity). Parallels can be drawn between the types posited by Keeley et al.
[34] and those outlined in this study.
Studies often cited in the past on entrepreneurial orientation consider innovativeness as an entrepreneurial trait [65].
Few have studied innovation as an entrepreneurial outcome (a form of performance). Instead innovation is seen from a
psychological propensity perspective rather than as a behavioural expression. However, there is sufficient scholarly litera-
ture that firmly asserts innovation as an outcome of entrepreneurship. Innovation is also seen to be a multi-dimensional
construct comprising internal firm and external-oriented changes, including at ecosystem levels ([21]; Al-Ansari [4,34]).
4
The work of Al-Ansari [4] and Dinh and Clarke [21] give due recognition to the role of innovation in performance
of firms and industries. Al-Ansari [4] and Ndubisi and Iftikhar [56] study innovation as a moderating variable in the
entrepreneurship-performance link. However, there is more scholarly work firmly asserting that innovation is not only an-
tecedent to, but also a determinant of, firm performance [12,21,28,34,50]. Innovation has been seen to have an ambivalent
relationship with performance by negatively affecting performance in the short-term especially on profitability, growth and
stakeholder [62,65]. Several other studies show that innovation positively influences performance of both firms, industries
and economies in the long term [2,4,21]. This study adopted innovation as a mediating of firm and consequently industry
performance. Innovation indicators were adapted from the work of Keeley et al. [34] and Clauss [18].
Performance of value-system actors

Performance has been studied as an eventual and desirable outcome of entrepreneurship in their studies [4,50,65].
Stephan et al. [70] suggest that firm performance should be a multi-dimensional variable that includes not only economic
value creation but also social value creation. Guo et al. [24] used related items to measure SME performance, namely
sales growth rate, market share growth, profit growth, productivity, return on assets and return on sales. Santos and Brito
[69] drew from stakeholder theory to develop a seven-dimension on performance as a manifestation of competitive ad-
vantage: profitability, growth, market value, customer satisfaction, employee satisfaction, environmental performance and
social performance. Santos and Barito [69] recommend further studies for generalizations to be made on organizational
performance measurement. Sanchez [68] used quantitative (financial) firm performance measures (sales growth, return on
sales, cash flow, return on investment, net profit and growth in market share) compared with competitors as self-reported
and judged by entrepreneurs on a Likert scale continuum. Al-Ansari [4] measured business growth performance in both
manufacturing and service industry SMEs using both qualitative (non-financial) and quantitative (financial) indicators in a
self-reporting Likert-scale instrument.
Manufacturing industry performance measures can be in terms of production levels, productivity and quality. Mwinyihija
[54] asserts the importance of engaging entrepreneurship of participants especially in the leather processing and goods man-
ufacturing for the leather sector’s potential. The determinants of industry performance discussed by Mwinyihija [53] include
human resource development, entrepreneurship, enterprise productivity, technological development, infrastructure, quality
standards and testing, research and development and support services through government interface with business. Kenya’s
leather industry performs poorly compared to global and regional competitors in terms of productivity, quality and cost
of products. Industry-level policies and strategies are therefore required to enhance performance [26]. Broad financial and
non-financial measures were adopted in this study to capture diverse value-system actor goals in an industry.
Studies reviewed here assert that performance should be studied as a multi-dimensional concept and an outcome of
entrepreneurship goals. Converging yet sometimes diverse performance measures for firms have been proposed and used
but few would capture industry goals of competitiveness. For example, measures from Lumpkin and Dess [46] and Santos
and Barito [69] do not capture innovations that are critical for industry renewal. Santos and Barito [69] are elaborate on their
measures and uniquely capture environmental, social and employee satisfaction. Therefore, this study developed various
economic and social measures commonly applied in different studies but as growth or improvement changes [4,21,46,69,70].
Profitability and satisfaction as performance measure were applied in this study with caution as they may be negatively
influenced by innovation activities especially at early stages of new venture development.
Empirical review
Studies on creating
To the best of the researcher’s knowledge, little scholarly work has been carried out on creating as an entrepreneurial
competence. Instead, there is more research, but in this case obliquely relevant, on creativity as a significant cognitive dis-
position in entrepreneurship. Constructs of creativity and even the measurement items tend to capture behavioural outputs
of creativity rather than the cognitive tendency. Thus, to this extent, these past studies give an insight into creating as a
competence. By using innovative capability as a surrogate for measuring entrepreneurial creative performance of new ven-
tures, Ming and Yang [51] studied 300 new ventures in Taiwanese incubators to develop typologies based on recognition
of opportunities and entrepreneurial creativity as dimensions. The study involved responses to a survey by one key infor-
mant from every new venture using a questionnaire items on tolerance for ambiguity, creativity, insight and imagination
to measure entrepreneurial creativity. Ming and Yang [51] assert that entrepreneurial creativity, which is an intangible re-
source leading to market-focused, novel and value-added products, has a positive influence, on a performance (satisfaction
and innovative capability) outcome in entrepreneurship. McMullan and Kenworthy [50] surveyed empirical evidence for the
role of creativity in entrepreneurial performance and found research, including meta-analytical studies, showed a positive
correlation between creativity and entrepreneurial characteristics and outcomes. McMullan and Kenworthy [50] assert that
personal creativity of the lead entrepreneur has a positive, statistically and practically significant relationship with business
(financial) performance.
Studies on innovation in entrepreneurship

McMullan and Kenworthy [50] reviewed empirical evidence on the relationship between creativity and innovation in
SMEs showed that various scholars have measured innovation outcome in terms of perception, degree or novelty of product
5
or process introductions. They conclude that creativity (individual and firm-level) has a positive and statistically-significant
relationship with innovation. Kollmann and Stockmann [37] drew on theoretical knowledge of entrepreneurial orientation,
exploratory and exploitative innovation and the resource-based view of the firm to provide empirical evidence for the en-
trepreneurial orientation-innovativeness-performance link in 228 ICT firms. Kollmann and Stockmann [37] found that ex-
ploratory and exploitative innovation, as behavior rather than an orientation, mediated the link between entrepreneurial
orientation variables and firm performance (innovativeness through exploration and exploitation; risk-taking through explo-
ration; pro-activeness through exploration and exploitation).
In a study of entrepreneurship-innovation-performance relationship in 124 Pakistani SMEs, Ndubisi and Iftikhar
[56] found that innovation has a significant direct relationship with quality performance and that innovation mediates the
entrepreneurship-performance link. Al-Ansari [4] present innovation practices as intervening the independent external /
internal factors variable and the dependent business growth performance variable. Evidence for the entrepreneurship (en-
trepreneurial orientation) and innovation performance link is well articulated by Madhoushi et al. [48]. Innovativeness of
SMEs has been found to significantly and positively affect business performance during market turbulence (β =0.34, p<0.01)
[39,40]. Using Structural Equation Modeling, Rajapathirana and Hui [63] empirical study established that innovation per-
formance (product, process and market innovations) was antecedent to, and had a significant positive impact on market
performance of insurance industry firms in Sri Lanka (path estimate at 0.230, p<0.01). Market performance consequently
had a significant positive effect on firm financial performance (path estimate at 0.382, p<0.0 0 0).
Studies on performance of entrepreneurial ventures

Various scholars have used regression analysis to show the causal relationship between entrepreneurial attributes and
firm-level performance. Sanchez [68] studied 450 young Spanish SMEs using qualitative data from key informants and
found empirical evidence that enterprising characteristics, in particular entrepreneurial competence at individual level of
entrepreneurs, directly and indirectly determine firm performance. McMullan and Kenworthy [50] records empirical studies
showing the relationship between entrepreneurial creativity and innovation (eleven studies) and with business growth and
financial performance (38 studies). The studies show that entrepreneurial outcomes of innovation and business development
(growth and financial performance) favor a positive relationship with entrepreneurial creativity.
Al-Ansari [4] showed that business growth performance is mediated by innovation practices in Dubai SMEs. Ming and
Yang [51] used entrepreneurial satisfaction and innovative capability as performance measures and found that these vari-
ables relationship with firm performance had a high score. Using quality as a performance measure, Ndubisi and Iftikhar
[56] found entrepreneurship (variables applied of risk-taking, pro-activeness and autonomy are associated with the en-
trepreneurial orientation trait) is positively correlated with firm performance.
Research hypotheses
From the objectives and theoretical background research hypotheses were formulated to guide the study. The first objec-
tive of the study was to determine the relationship between creating and performance of value-system actors in Kenya’s the
leather industry. The following research hypothesis was formulated:
Ha1 : Creating as an entrepreneurial competence determines performance of value-system actors in Kenya’s leather indus-
try.
The second objective was to determine whether innovation mediates the relationship between creating as an en-
trepreneurial competence and the performance of value-system actors in leather industry in Kenya. The following research
hypotheses was formulated:
Ha2 : Innovation mediates the relationship between creating as an entrepreneurial competence and performance of value-
system actors in Kenya’s leather industry.
Research methodology
This research was a cross-sectional survey using quantitative methods to study entrepreneurship variables and their
relationship in Kenya’s leather industry ecosystem. A mixed design was adopted which involved exploration of dimensions
of the study followed by a diagnosis of their relationship [14,38]. Statistical Package for Social Sciences (SPSS) version 21 was
applied in the analysis of data. Coefficient of determination (adjusted R, or R2) was obtained to show the extent to which
the independent variable determines the intervening and dependent variables, or the percentage of variation not attributable
to the measured variable as opposed to unknown factors [13]. The coefficient of multiple correlation obtained was applied
to a linear regression model to show the relationship between the independent, mediating and dependent variables.
Hoque and Awang (2016) used previous theoretical literature to develop and validate the dimensionality of a measure-
ment scale of entrepreneurial marketing in the context of Bangladeshi SME’s. They cited the general acceptance KMO value
as being above 0.6 and Barlett’s test with required significance of less than 0.05 to show data to be adequate for factor
analysis. Ngugi et al. [59] applied regression analysis to show that employee innovativeness has a significant influence on
growth of SMEs in Kenya.
The target population was enterprise-members of the Leather Articles Entrepreneurs Association (LAEA) operating in and
around Nairobi, and the associated industry value-system actors with supportive roles. The population was chosen for being
6
Table 2
Distribution of respondents across value-system roles.
Respondent Value-system Role Number of Respondents Percent Participants
Producer 3 5.8% Tanners in Ruai and Sagana

Delivery Agents 10 19.2% MSE’s in Nairobi and Thika being suppliers of leather
to manufacturers (primary) and some retailers of
shoes (secondary)
Processing 34 65.3% Leather article manufacturers in Nairobi CBD, Ngara
and Thika
Industry Networking Support / Association 2 3.8% LAEA and Cobblers Association officials
Policy and Regulatory Support 1 1.9% KLDC
Research Support 2 3.8% KIRDI, TPCSI
representative of value-system actor roles and having the majority of known players in the Kenyan leather industry. The
majority of leather industry value-system players in Kenya are MSMEs and informal [26]. As the industry’s value-system
actors, LAEA members comprised MSMEs involved in leather processing and marketing. Mixed sampling methods involved a
census of fifty-eight LAEA members and snowballing from ten associated support institutions. The LAEA membership register
provided the reference sampling frame from which respondents were sought. Hansen et al. [26] studied the value-system
players associated with Kariokor Market (KM) cluster of leather-goods manufacturers as the heart of Kenya’s informal leather
processing industry.
The study used a self-completed questionnaire in guided interviews to collect primary data from leaders of the industry’s
value-system actors as key-informants [38]. Valid data was obtained from fifty-two respondents who represented leather
industry value-system actors, giving a response rate of 76% of the targeted population. The respondents were leaders of
value-system actor enterprises such as executive officers, owner managers and managers. Diverse value-system actor roles
such as processors, delivery agents, industry network associations, regulators and research agents were included [26], with
the industry boundary defined by their commitment to leather as a product. The data was collected in April – June 2018 by
the researcher and an assistant from respondents at their premises and during an industry networking meeting.
Measurement indicators for the creating, innovation and performance variables were adapted from reviewed literature.
Reflective questions collected self-reported data which was quantitatively-coded on a Likert scale for further analysis. Ef-
fort was made to ensure that the measurement items were reflective of behaviours for creating, while innovation and
performance outcomes were relevant to industry ecosystem goals. A five-point Likert scale showed the extent to which
respondents agreed with the measurement items [57]. Al-Ansari [4] used Likert scale from self-reported measures for inno-
vativeness and business growth performance. Lans et al. [43] used the Likert-scale to measure self-reported assessment of
SME owners’ entrepreneurial competencies.
The Delphi technique was used to establish face validity of the measurement items by consulting nine doctorate-level
entrepreneurship scholars. A pilot study was conducted on seventeen value-system actors from Kariokor Market leather in-
dustry cluster [26,53]. Pilot study reliability results showed the variables to have a Cronbach’s alpha coefficient of at least 0.7
and above [22]. Creating had seven indicator items with an overall reliability index of 0.753, innovation had nine indicator
items with and an index of 0.761, while performance had nine indicator items with an index of 0.717. Man et al. [49] con-
ducted the spectrum of expert opinion, EFA, correlational analysis, and hypotheses testing to develop and empirical model
comprising the relationship between a construct of entrepreneurial competence and SME performance in a given competi-
tive context. Zhang et al. [78] applied Principal Component Analysis (PCA) in investigating dimensionality of entrepreneurial
orientation.
Research findings and discussion
Out of fifty-two respondents, 3 (65.3%) were in leather processing. Ten (19.2%) were in delivery (either secondary or
tertiary), 3 (5.8%) were producers, while 2 (3.8%) were industry networking association officials. Two (3.8%) each were in
research support institutions and one (1.9%) was in the industry regulator. Results are shown in Table 2.
As shown in Fig. 2, study respondents were decision makers at owner or manager levels, as key-informants of value-
system actors. 73% identified themselves as owners / owner managers of the business, 10% were strategic level managers,
10% were line managers and 8% were chief executive officers. These results were consistent with a survey of MSME estab-
lishments in Kenya showing that 78.9% were owned by sole proprietors [36]. Forty-two percent of the business were in
operation for a period of above 10 years. Thirty-nine percent were in operation for a period between 5 and 10 years and
19.2% of the businesses were in existence for a period below 5 years.
Factor analysis for the study variables
This section discusses results of factor analysis for the independent, mediating and dependent variables. Factor analysis
was performed using the Principal Component Analysis (PCA) with Promax rotation for convergent and discriminant validity.
7
Fig. 2. Respondent role in venture.
Table 3
Pattern matrix for entrepreneurial competence.
Component Matrix (a)

Component
1
CDescription .758
CFacts .876
CSources .681
CPerspectives .784
CIdeas .878
CSynthesis .753
Extraction Method: Principal Component Analy-

sis. a 1 components extracted.
Zhang et al. [78] used similar tests with Principal Component Analysis (PCA) applied to obtain scores above the 0.60 thresh-
old for all measurement items. This showed that all items had communalities with factors extracted. The indicator items for
the independent variable were analyzed in an iterative process to identify those that pass the acceptable level (Eingen value
>1).
Factor analysis for creating

Exploratory factor analysis was employed on Creating variable that was measured using seven items. The study revealed
as show that the Kaiser-Meyer-Olkin Measure of Sampling Adequacy was 0.828 which was above 0.6 [32]. This meant that
the sample was adequate for factor analysis. The Chi-Square value for Bartlett’s Test of Sphericity was 158.713 with degrees
of freedom amount to 15 and p-value less than 0.05 indicating suitability of data for structure detection [9].
Communalities for items measuring the creating construct were all greater than 0.5 indicating that the retained items
fitted well with other items in the creating factor solution. Small values for communalities signify that the items of the
construct do not fit well with the extracted factor solution, and should certainly be dropped from further analysis. Costello
and Osborne (2005) aver that communalities of 0.4 to 0.7 are acceptable for analysis.
Based on Kaiser Criterion, one factor with an eigenvalue greater than 1.0 0 0 was extracted out of a total seven items. The
factor was able to explain 62.624% of the total variance in the study data. At 62.624%, the cumulative variability explained
by the imputed single factor in the extracted solution showed that no explained variation by the initial eigenvalues is lost
during the Promax rotation of the creating factor solution [25].
Pattern matrix for creating

As shown in Table 3, the pattern matrix shows the single component had factor loadings ranged from 0.681 to 0.878.
Creating therefore comprised six indicator items, namely describing challenges (CDescription), separating facts from opinions
(CFacts), using multiple sources of ideas (CSources), seeing issues from different perspectives (CPerspectives), creating of
new ideas (CIdeas), and bringing together diverse information to solve problems (CSynthesis). The pattern matrix provided
empirical evidence to support the behavioural analysing component of the entrepreneurial competence variable established
by Lans et al. [43] from where this measure was adapted. Ng and Kee [58] acknowledged similar competencies and their
influence on firm performance. Man et al. [49] affirm entrepreneurial competencies as observable behaviours that involve
8
Table 4
Pattern matrix for innovation.
Component
1 2
InnovCosts .871
InnovRevenues .837
InnovSystInteraction .753
InnovOrgForm .688
InnovCapabilities .578
InnovMarkets .888
InnovCustEngagement .823
InnovProducts .716
InnovProcesses .607
Extraction Method: Principal Component Analysis.

Rotation Method: Promax with Kaiser Normalization.
a. Rotation converged in 3 iterations.
performance of entrepreneurial tasks to develop and utilize organizational capability, to pursue a wider competitive scope
in business, to set and take action on long-term performance goals.
Factor analysis for innovation by value-system actors

Exploratory factor analysis was employed on Innovation construct that was measured using nine items. The items were
introduction of new product offerings, new processes, new organizational capabilities, new organizational forms or struc-
tures, new customers/markets, new customer engagements, new partnerships or system interactions, new revenue genera-
tion practices and new cost structures.
The study revealed that the Kaiser-Meyer-Olkin Measure of Sampling Adequacy was 0.720 which was above the 0.6
threshold [32]. This meant that the sample was adequate for factor analysis. The Chi-Square value for Bartlett’s Test of
Sphericity was 199.682 with degrees of freedom of 36 and p-value less than 0.05 indicating suitability of data for structure
detection [9]. The extraction communalities for the retained items measuring innovation construct were all equal to or more
than 0.5, indicating that the retained items fitted well with other items in the innovation factor solution.
Two factors imputed attained eigenvalues in the initial solution greater or equal to 1.0 based on the Kaiser Criterion. Two factors out of a total 9
indicators were therefore extracted which were able to explain 60.542% of the total variance in the study data. Thus, no explained variation by the
initial eigenvalues is lost during the Promax rotation of the innovation factor solution [25].
Pattern matrix for innovation

As the pattern matrix shows in Table 4, the first component had five items (InnovCosts, InnovRevenues, InnovSystInter-
action, InnovOrgForm and InnovCapabilities) whose factor loadings ranged from 0.578 to 0.871. The second component had
four items (InnovMarkets, InnovCustEngagement, InnovProducts and InnovProcesses) whose loadings ranged from 0.607 to
0.888.
The pattern matrix showed that innovation can be dichotomous or multi-dimensional variable. The first component of
the innovation variable comprises items measuring how the business is modeled in terms of business system or concept
(InnovCosts, InnovRevenues, InnovSystInteraction, InnovOrgForm and InnovCapabilities) and are associated with business
model, structure or administrative innovation. The second component can be seen as having items measuring the business-
customer interface (InnovMarkets, InnovCustEngagement, InnovProducts and InnovProcesses) which are changes associated
with products and customers.
The multi-dimensionality of innovation is supported by theoretical and empirical studies [10,18]. Literature on business
model innovation (BMI) suggests that it is the design of novel business-system interactions that determines how a firm
does business. BMI was described by Bashir and Verma [10] as “the process of finding a novel way of doing business which
results in reconfiguring of value creation and value capturing mechanisms” which can occur by changing even one element
of a business model. Studying established but entrepreneurial firms, Amit and Zott [6] identified creating novel activities to
be performed (activity system content), new ways of activities’ linkage an sequence (activities structure), changing parties
that perform activities (activities governance) with which parallels to capability innovation (with resultant costs revenues
changes), change in organizational form and change in an organization’s interaction with the industry system respectively.
This is in line with scholarly literature on business model innovation as distinct form of innovation from product and pro-
cess innovation [10] which are the second component of the innovation variable in this study. Further, Roach, Ryman and
Makani [66] found measures of innovativeness to discriminate into two sub-constructs, namely innovation orientation and
product/service innovation. In this study, extracted factors of the innovation variable extracted two dimensions that could
be classified as system / configuration changes and customer-interface / content changes.
9
Table 5
Pattern matrix for performance of value-system actors.
Component
1 2
BusPerformSales .949
BusPerformQuantity .937
BusPerformProfit .885
BusPerformProductivity .816
BusPerformShare .812
BuPerformVariety .632
BusPerformDefects .911
BusPerformComplaints .881
BusPerformExpenses .613
Extraction Method: Principal Component Analysis.

Rotation Method: Promax with Kaiser Normalization.
a. Rotation converged in 3 iterations.
Factor analysis for performance of value-system actors

Exploratory factor analysis was employed on Performance construct that was measured using nine items. Results of
structure detection and communalities are presented below.
The study revealed that the Kaiser-Meyer-Olkin Measure of Sampling Adequacy was 0.796 which was above 0.6 [32]. This
meant that the sample was adequate for factor analysis. The Chi-Square value for Bartlett’s Test of Sphericity was 325.913
with degrees of freedom amount to 36 and p-value less than 0.05 indicating suitability of data for structure detection
[9]. The extraction communalities for the retained items measuring the performance construct were all greater than 0.5
indicating that the retained items fitted well with other items in the performance of value system factor solution.
Based on Kaiser Criterion, two factors were extracted out of a total 9 indicators. The two factors were able to explain
71.853% of the total variance in the study data. The two factors imputed attained eigenvalues in the initial solution greater
or equal to 1.0. The cumulative variability explained by these imputed two factors in the extracted solution was 71.853%,
showing that no explained variation by the initial eigenvalues is lost during the Promax rotation of the performance of value
system factor solution [25].
Pattern matrix for performance of value-system actors

The pattern matrix for business performance showed two components. The pattern matrix in Table 5 shows the first
component had six items (BusPerformSales, BusPerformQuantity, BusPerformProfit, BusPerformProductivity, BusPerformShare
and BuPerformVariety) whose factor loadings ranged from 0.632 to 0.949. The second component had three items (BusPer-
formDefects, BusPerformComplaints and BusPerformExpenses) whose loadings ranged from 0.613 to 0.911.
These results support previous studies on entrepreneurship identify business performance as a dependent variable whose
measures include the same indirect measures. Diverse performance measures were used in this study as inductively deter-
mined from theoretical and empirical literature ([76] and [4,30,39,50,56,65,68,77]).
For the Performance variable, the items with positively stated desired outcome measures of performance (namely im-
provement in profit, sales, markets, quantity, productivity, and variety) showed convergence as one dimension, while those
with negative non-desired / undesirable performance outcomes (reduction in business expenses, defects and customer com-
plaints). Expenses can be considered as an indirect measure of operational and financial performance efficiencies, product
defects as proxy measure of product quality and customer complaints as a proxy for stakeholder (in this customer) satisfac-
tion.
Test for statistical assumptions
Assumptions of normality, heteroscedasticity and multicollinearity were tested to establish suitability of the data for
linear regression and statistical modeling [22]. Normality of the data was tested using P-P plots. Results showed that the
distribution graph was not perfectly normal but most of the data points did not deviate drastically from the 45-degree
line. Results of the inferential analysis are therefore interpreted with caution. Homoscedasticity assumption was tested us-
ing a scatter plot of the standardized residuals versus standardized predicted residuals. The data showed a normal visual
distribution that were randomly distributed with no obvious or funnel pattern. This indicated that the data met the ho-
moscedasticity assumption. Multicollinearity was tested using Variance Inflation Factors (VIF) with an acceptance value of
below 10. Results showed that the VIF was below 10 indicating that multicollinearity was not a problem.
Tests of hypotheses
Relationship between creating and performance of value-system actors

Linear regression was applied to test Ha1 . Creating variable was regressed on performance and results of the linear re-
gression were interpreted using R2 and p-values at p<0.05 significance level (2-tailed) [38].
10
Table 6
Regression results on the effect of creating on performance of value-system actors.
Unstandardized Coefficients Standardized Coefficients t Sig.

Model
B Std. Error Beta B Std. Error
1 (Constant) 1.505 .901 1.671 .101

Creating .593 .213 .367 2.792 .007
a Dependent Variable: Performance_index.
Table 7
Correlation between creating and performance of value-system actors.
Correlations
Creating Performance_index
Creating Pearson Correlation 1 .443(∗ ∗ )

Sig. (2-tailed) .001
N 52 52
Performance_index Pearson Correlation .443(∗ ∗ ) 1
Sig. (2-tailed) .001
N 52 52
∗∗
Correlation is significant at the 0.01 level (2-tailed).
The R-squared is 0.135 meaning that the Creating factor was able to explain up to 13.5% of variations in the performance
of value-system actors in leather industry in Kenya while the rest are explained by the exogenous factors. The F-statistic
is 7.793 with a p-value of 0.007 which was below the p<0.05 significance level. This implied that the regression model is
significant. Therefore, the t-statistics and p-values can reliably be used to test the significance of coefficients in the model.
As shown in Table 6, the beta coefficient for creating was 0.593. This indicates that a unit increase in creating would
result in 59.3% increase in performance of value system actors in the leather industry in Kenya. The t-statistic and corre-
sponding p-value were 2.792 and 0.007 respectively.
Therefore, at p<0.05 level of significance the null hypothesis was rejected implying that creating was a significant deter-
minant of performance of value-system actors in the leather industry in Kenya. On the basis of these statistics, the study
concludes that there is significant positive relationship between creating and performance of value-system actors in the
leather industry in Kenya.
Test for mediation between creating and performance of value-system actors by innovation
To establish the mediation effect and test Ha2 , Baron and Kenny’s [35] causal step approach was used. The Sobel Test and
Bootstrapping methods were used to test the significance of the mediation relationship. The first step involved testing the
correlation between creating and performance of value-system actors which was found to be statistically significant.
Correlation between creating and performance of value-system actors

The relationship between creating and performance of value-system actors was assessed using Pearson correlation coef-
ficient results obtained as shown in Table 7. The output indicates that creating had a positive correlation with performance
of value-system actors (r = 0.443, p<0.05) in a two-tailed test and this relationship was significant.
Relationship between creating and performance of value-system actors

The causal relationship between creating and performance of value-system actors in Kenya’s leather industry is confirmed
as described in Section 4.4.1 above. The first step of testing mediation by innovation of the creating-performance link is thus
satisfied. The findings as showed that creating determined 13.5% of the variation in performance of value-system actors in
Kenya’s leather industry, and this relationship was significant.
Relationship between creating and innovation by value-system actors

Results showed that the R-squared was 0.291 meaning that the creating was able to explain 29.1% variations in the
innovation by value-system actors in leather industry in Kenya while the rest are explained by the error term. The F-statistic
was 20.573 with a p-value of 0.0 0 0 which implies that the regression model is significant. Therefore, the t-statistics and p-
values can reliably be used to test the significance of coefficients in the model.
Table 8 shows that the beta coefficient for creating was 0.966. This indicates that a unit increase in creating would result
in 96.6% increase in innovation of value-system actors in the leather industry in Kenya. The t-statistic and corresponding p-
value were 4.532 and 0.0 0 0 respectively. Therefore, creating has a significant influence on Innovation of value-system actors
in the leather industry in Kenya at p<0.05 level of significance.
11
Table 8
Regression results on effect of creating on innovation by value-system actors.
Unstandardized Coefficients Standardized Coefficients

Model B Std. Error Beta t Sig.
1 (Constant) .599 .904 .619 .536

Creating .966 .213 .540 4.532 .000
a. Dependent Variable: Innovation_index.
Table 9
Regression results on effect of innovation on performance of value-system actors.
Unstandardized Coefficients Standardized Coefficients

Model B Std. Error Beta t Sig.
1 (Constant) 1.338 .464 2.886 .006

Innovation_index .576 .098 .638 5.863 .000
Table 10
Multiple linear regression results on effect of creating and innovation on performance of value-system actors.
Model Unstandardized Coefficients Standardized Coefficients t Sig.
B Std. Error Beta
1 (Constant) 1.192 .756 1.577 .121

Creating .052 .211 .032 .246 .806
innovation_index .560 .118 .621 4.757 .000
Relationship between innovation and performance of value-system actors

Results showed the R-squared as 0.407 meaning that the innovation was able to explain 40.7% variations in the perfor-
mance of value systems in leather industry in Kenya while the rest are explained by the error term. The F-statistic is 34.376
with a p-value of 0.0 0 0 which implies that the regression model is significant. Therefore, the t-statistics and p-values can
reliably be used to test the significance of coefficients in the model.
Table 9 shows that the beta coefficient for Innovation was 0.576. This indicates that a unit increase in Innovation would
result in 57.6% increase in Performance of value-system actors in the leather industry in Kenya. The t-statistic and corre-
sponding p-value were 5.863 and 0.0 0 0 respectively. Therefore, innovation has a significant influence on Performance of
value-system actors in the leather industry in Kenya at p<0.05 level of significance.
Multiple linear regression of creating and innovation on performance of value-system actors

Multiple linear regression analysis was carried out of independent creating and mediating innovation variables on the
dependent performance variable. The results show that creating and innovation accounted for 63.9% of variation in perfor-
mance (R2 =0.639) and that this relationship was significant (F = 16.895, p = 0.0 0 0). Therefore, the t-statistics and p-values
can reliably be used to test the significance of coefficients in the model.
Table 10 shows results of the unstandardized beta coefficients for the independent and mediating variables were 0.052
and 0.560 respectively, with 1.192 as a constant. The t-statistics the variables were 0.246 and 4.757 respectively. The corre-
sponding p-value for innovation was within the acceptable at p<0.05 level of significance.
These statistics indicated that a unit increase in creating would result in a 0.052 increase in performance of value-system
actors in Kenya’s leather industry. A unit increase in innovation would result in a 0.560 increase in performance of value-
system actors in Kenya’s leather industry. However, the coefficient for creating in the multiple regression was insignificant
for the sample studied of Kenya’s leather industry.
Significance of the mediator innovation variable in Step 3 where creating is controlled shows mediation effect of inno-
vation on the creating-performance link (Step 1) is supported. Step 4 where both creating and innovation variable were
regressed on performance together showed that was not a predictor of performance when regressed together with innova-
tion. Significance of the innovation variables in both Steps 3 and 4, and the loss of significance for creating in Step 4 implies
that innovation fully mediates the creating-performance link. The results therefore further support rejection of the null hy-
pothesis and acceptance of the alternative hypothesis at p<0.05 level of significance. Therefore, innovation has a significant
and full mediating effect on the creating-performance link.
Significance of mediation between the creating and performance link

To establish the significance of the mediation effect of Innovation on the relationship between creating and the per-
formance of value-system actors in leather industry in Kenya, the Sobel test and bootstrapping methods were used in the
study [35]. Use of both methods provides an unambiguous understanding of the mediation effect established through the
12
Table 11
Significance of Sobel test.
Mediation Z-value for the Sobel test One-tailed probability Two-tailed probability
Creating and performance mediated by innovation 3.59057465 0.00016497 0.00032995
Baron and Kenny method. The Sobel test involves multiplication of coefficient estimates for the paths between independent
variable and mediator variable (a), and the mediator variable and the dependent variable (b) and determining the ratio of
the resulting value to standard error [60].
The significance is measured by the following formula: z-value = a∗ b/SQRT(b2 ∗ sa2 + a2 ∗ sb2 )
Where,
a = raw (unstandardized) regression coefficient for the association between the independent variable and mediator.
sa = standard error of a.
b = raw coefficient for the association between the mediator and the dependent variable (when the intervening variable
is also a predictor of the dependent variable). sb = standard error of b.
The resulting Z-value is the score of the mediation effect. If z-score is greater than 1.96 when checked against the prob-
abilities corresponding to a standard normal distribution, the mediation effect is interpreted to be statistically significant at
the 0.05 level.
As shown in Table 11, the results indicate that the Z-value for the Sobel test (Z = 3.59057465) with a p-value of
0.0 0 032995 (two-tailed) which is less than the p<0.05 test threshold for significance. Therefore, at p<0.05 level of signifi-
cance the null hypothesis is rejected implying that innovation mediates the relationship between creating and performance
of value-system actors in the leather industry in Kenya. On the basis of these statistics, the study confirms that there is a
significant mediating effect of innovation on the relationship between creating and performance of value-system actors in
Kenya’s leather industry. The full mediation effect of innovation on the creating and performance link is established in the
four sequential steps above [35].
Bootstrapping is a re-sampling method that does not require the assumption of normality in sampling distribution to
test mediation. It involves a process of estimating the indirect effect in multiple re-sampling. Bootstrapping produced lower
standard errors and was bootstrapping provided more reliable results in small samples like the one used in this study [60].
Repeating the process thousands of times produces an empirical normal distribution from which an estimate the confidence
intervals of the indirect effect is obtained. If zero is not in the confidence interval, the researcher can be confident that the
indirect effect is different from zero [35].
As shown in Table 12, the bootstrapping procedure revealed that approximately 40.81% of the variance in performance
was accounted for by the creating and innovation predictors (R2 = 0.4081). Results showed when regressed together with
innovation, creating was not a significant predictor of performance (p = 0.8064), but innovation remained a significant pre-
dictor of performance, (β =0.5630, SE=0.1178, t(52)=4.7568, p<0.05). Independently however, creating accounted for 13.48%
of variation in performance (R2 =0.1348) and was a significant predictor of performance after controlling for innovation,
(β =5935, SE=0.2126, t(52)=2.7916, p<0.05). Re-sampling was done five thousand times at 95% confidence levels using the
PROCESS macro Version 3 [27].
The bootstrapping statistics indicated the mediation effect was significant at α =0.05. The results were consistent with
Baron and Kenny [35] four-step process for testing mediation. Significance of innovation when creating is no longer sig-
nificant when both are regressed on performance is a confirmation of the full mediation of innovation in the creating-
performance link.
This study’s findings are in agreement with previous studies on the relationship between attributes of entrepreneurship,
innovation and performance. On the basis of the Sobel test and bootstrapping statistics, the study confirms that there is
a significant mediating effect of innovation on the relationship between creating and performance of value-system actors
in Kenya’s leather industry. Given that the direct relationship between creating and performance is significant, then the
mediating effect of innovation is full. The full mediation effect of innovation on the creating and performance link is es-
tablished in the four sequential steps above and tested for significance using the Sobel test and bootstrapping methods
[35,60]. Musuva-Musimba [52] applied the Sobel test and bootstrapping methods to establish significance of mediation for
a sample of fifty-eight respondents (86.2% response rate). Madhoushi et al. [48], Kraus et al. [39] Ndubisi et al. [56], Koll-
man and Stockmann [37], Al-Ansari [4] have found that innovation had a significant direct relationship with attributes of
entrepreneurial performance and that it mediates the entrepreneurship-performance link. Acs et al. [2] asserted that inno-
vation is a mediator of firm growth performance.
Regression analysis by Abdilahi et al. [1] showed that innovation, including product innovation, marketing innovation and
organizational innovation, significantly affected SME performance. Although innovation has ambivalent both positive and
negative effects on performance, especially sales or financial growth, some such as administrative innovations can lead to
better SME performance [45,55]. Despite not distinguishing cognitive and behavioural characteristics of entrepreneurs (their
study labeled what one may consider diverse behavior, skill, knowledge and attitudes as entrepreneurial competencies),
Umar et al. [72] found that innovation partially mediated the relationship between various entrepreneurial competencies
and SME performance (both financial and non-financial) link in Malaysia.
13
Table 12
Results of the bootstrapping procedure.
PROCESS Procedure for SPSS Version 3.3

Y: Performance X: Creating M: innovation Sample Size: 52
OUTCOME VARIABLE: innovation
Model Summary
R R-sq MSE F df1 df2 p

.5396 0.2911 0.6661 20.5366 1.0000 50.0000 0.0000
Model
coeff se t p LLCI ULCI
constant 0.5593 0.9039 .6187 0.5389 −1.2563 2.3749

Creating 0.9665 0.2133 4.5317 0.0000 0.5381 1.3943
OUTCOME VARIABLE: Performance

Model Summary
.6389 0.4081 0.4620 16.8955 2.0000 49.0000 0.0000
Model
constant 1.1919 0.7557 1.5772 0.1212 −0.3268 2.7106

Creating 0.0520 .2110 0.2464 0.8064 −0.3720 0.4759
innovation 0.5630 0.1178 4.7568 0.0000 0.3236 0.7970
TOTAL EFFECT MODEL

OUTCOME VARIABLE: Performance
Model Summary
.3672 .1348 .6619 7.7931 1.0000 50.0000 .0074
Model
constant 1.5052 .9011 1.6705 .1011 −0.3046 3.3151

Creating .5935 .2126 2.7916 .0074 .1665 1.0205
TOTAL, DIRECT AND INDIRECT EFFECTS OF X ON Y

Total effect of X on Y
Effect se t p LLCI ULCI
.5935 .2126 2.7916 .0074 .1665 1.0205
Direct effect of X on Y
Effect se t p LLCI ULCI
.0520 .2110 .2464 .8064 −0.3720 .4759
Indirect effect(s) of X on Y:
Effect BootSE BootLLCI BootULCI
innovation .5415 .2129 .1963 1.0468
Studies of creating as an entrepreneurial behavior are few. However, in recent studies on effectuation, creative action and
experimentation are seen as central to the design process by leading to new possibilities or artifacts, and as determinants
of innovation performance. Effectuation, and its antecedents of means and leveraging contingency (experimentation), was
found to have a strong and positive impact on firm-level innovation and ultimately firm performance. Experimentation can
be seen in the broader effectuation logic of creating opportunities through leveraging resources in adaptive and novel ways
[66]. Lans et al. [43] empirical study showed that analyzing, from which the creating variable in this study was adapted,
was an entrepreneurial competence that determined performance.
Conclusion
On the basis of these statistics, the study concluded that there is significant positive relationship between creating and
performance of value-system actors in the leather industry in Kenya. Further, this relationship is mediated by innovation
outcomes of the value-system actors. This relationship is illustrated in Fig. 3.
Empirical evidence from this study established creating as having convergent validity as a unidimensional factor compris-
ing six behavioural indicators. Similarly, innovation and performance of value-system actors had nine indicators converging
in two components each. Innovation dimensions could be classified in either system- or customer-focused types of inno-
14
Fig. 3. Empirical model showing the relationship between creating, innovation and performance of value-system actors.
vation. The two dimensions of performance depended on whether measurement items used were positively or negatively
stated. Creating is also established as a significant determinant of performance of value-system actors in the leather indus-
try in Kenya. Further, innovation was a full mediator of the relationship between creating as an entrepreneurial competence
and performance of ventures in Kenya’s leather industry. Results from this research were supported by previous studies
on the role creativity in determining entrepreneurial outcomes of innovation and other performance measures. Thus, under-
standing and developing an entrepreneurial competence of creating of entrepreneurs can lead to an improvement in venture
performance. Creating leads to innovation and the latter is indispensable to firm performance.
Recommendations
Given the central role of creating behaviours in entrepreneurship therefore, it is important to develop the creating ca-
pacity of key individual players in different ecosystem roles. This is even more so in an uncompetitive and underperforming
leather industry in Kenya. Ecosystem actors would include enterprise owners and leaders in raw material processing, man-
ufacturing, industry networking, regulatory and research support roles of the industry value-system. For impact on perfor-
mance, the creating capacity should also be translated into tangible business model and customer-focused innovations. This
would facilitate the development a globally competitive entrepreneurial ecosystem. The results of this study therefore have
relevance in entrepreneurship studies for providing a measure of creating as a competence, its translation into appropriate
innovation outcomes, its potential application in training and business practice, and in the formulation of guiding policies
for industry ecosystems. This study recommends an extension of this research to other industry contexts and using bigger
samples to establish the validity of the methodology, the constructs used and the relationships demonstrated. Analysis could
be carried out not only at firm-level, but also at ecosystem role and entire industry levels.
Funding
The author declares that there was no funding associated with this manuscript.
15
Declaration of Competing Interest
The author declares that there are no competing interests associated with this manuscript.
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Scientiﬁc African 11 (2021) e00664

Contents lists available at ScienceDirect

Creating as an entrepreneurial competence, innovation and

Background of the study

E-mail address: kamurisimon@gmail.com

Theoretical perspectives on entrepreneurship

Creating as an entrepreneurial competence

Fig. 1. The leather industry value-chain.

Value-system Role Value-addition Activities

Primary Processing Tanners

Researcher’s own classiﬁcation.

Value-system actors in Kenya’s leather industry

Innovation by value-system actors

Performance of value-system actors

Studies on innovation in entrepreneurship

Studies on performance of entrepreneurial ventures

Respondent Value-system Role Number of Respondents Percent Participants

Producer 3 5.8% Tanners in Ruai and Sagana

Research ﬁndings and discussion

Factor analysis for the study variables

Fig. 2. Respondent role in venture.

Component Matrix (a)

Extraction Method: Principal Component Analy-

Factor analysis for creating

Pattern matrix for creating

Extraction Method: Principal Component Analysis.

Factor analysis for innovation by value-system actors

Pattern matrix for innovation

Extraction Method: Principal Component Analysis.

Factor analysis for performance of value-system actors

Pattern matrix for performance of value-system actors

Test for statistical assumptions

Relationship between creating and performance of value-system actors

Unstandardized Coeﬃcients Standardized Coeﬃcients t Sig.

1 (Constant) 1.505 .901 1.671 .101

a Dependent Variable: Performance_index.

Creating Pearson Correlation 1 .443(∗ ∗ )

Correlation between creating and performance of value-system actors

Relationship between creating and performance of value-system actors

Relationship between creating and innovation by value-system actors

Unstandardized Coeﬃcients Standardized Coeﬃcients

1 (Constant) .599 .904 .619 .536

a. Dependent Variable: Innovation_index.

Unstandardized Coeﬃcients Standardized Coeﬃcients

1 (Constant) 1.338 .464 2.886 .006

a Dependent Variable: Performance_index.

Model Unstandardized Coeﬃcients Standardized Coeﬃcients t Sig.

B Std. Error Beta

1 (Constant) 1.192 .756 1.577 .121

a Dependent Variable: Performance_index.

Relationship between innovation and performance of value-system actors

Multiple linear regression of creating and innovation on performance of value-system actors

Signiﬁcance of mediation between the creating and performance link

Creating and performance mediated by innovation 3.59057465 0.00016497 0.00032995

PROCESS Procedure for SPSS Version 3.3

R R-sq MSE F df1 df2 p

constant 0.5593 0.9039 .6187 0.5389 −1.2563 2.3749

OUTCOME VARIABLE: Performance