Leadership and Financial Performance in Indonesian Micro, Small, and Medium-Sized Enterprises
https://doi.org/10.47703/2789-8253-2026-3-89-110
Abstract
In resource-constrained settings, the sustainability of micro, small, and medium-sized enterprises largely depends on how effectively managerial practices are translated into marketing capabilities, market outcomes, and financial performance. This study aims to examine whether integrated marketing communication, campaign effectiveness, and brand market performance sequentially mediate the relationship between leadership styles and financial performance. A quantitative cross-sectional research design was employed, and data collected from 398 owners, founders, and marketing managers of Indonesian MSMEs were analyzed using partial least squares structural equation modeling in WarpPLS. Transactional leadership is positively and significantly associated with integrated marketing communication (β = 0.660; t = 9.486; p < 0.001), whereas the association between transformational leadership and integrated marketing communication is not statistically significant (β = 0.080; t = 1.038; p = 0.150). The model explains the variance in integrated marketing communication (R2 = 0.433), campaign effectiveness (R2 = 0.714), brand market performance (R2 = 0.803), and financial performance (R2 = 0.336). Integrated marketing communication has no statistically significant direct association with financial performance (β = −0.070; p = 0.180), while campaign effectiveness (β = −0.280; p < 0.001) and brand market performance (β = −0.330; p < 0.001) are negatively associated with financial performance. Overall, the findings indicate that transactional leadership is a more important antecedent of integrated marketing communication than transformational leadership and that improvements in marketing and brand outcomes do not necessarily translate into immediate gains in financial performance among Indonesian MSMEs.
About the Authors
C.-W. Lee
Chung Yuan Christian University
Taiwan, Province of China
Taiwan, Province of China
Cheng-Wen Lee – Professor, Department of International Business
Taoyuan City
A. Sunani
Chung Yuan Christian University
Taiwan, Province of China
Taiwan, Province of China
Avi Sunani – PhD Program in Business
Taoyuan City
H.-V. Ngo
Chung Yuan Christian University
Taiwan, Province of China
Taiwan, Province of China
Hong-Vui Ngo – PhD Program in Business
Taoyuan City
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Review
For citations:
Lee C., Sunani A., Ngo H. Leadership and Financial Performance in Indonesian Micro, Small, and Medium-Sized Enterprises. Eurasian Journal of Economic and Business Studies. 2026;70(3):89-110. https://doi.org/10.47703/2789-8253-2026-3-89-110
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