Exploring the role of entrepreneurial self-efficacy into performance of graduate-owned small and medium-sized enterprises in Tanzania

Purpose The study assessed the role of entrepreneurial self-efficacy (ESE) in the performance of graduate-owned small and medium-sized enterprises (SMEs). Specifically, the paper focused on how graduate owners' confidence in identifying and commercializing new business opportunities and create new commodities according to the market demand influences both, the financial and non-financial performance of graduate-owned SMEs. Design/methodology/approach The study employed a cross-sectional survey design, in which 228 SME graduate owners majored in entrepreneurship were involved through online structured questionnaires. The relationship between the variables was determined by using partial least squares structured equation modeling (PLS-SEM). Findings The results indicate that entrepreneurial self-efficacy of graduate SME owners influence the financial and non-financial performance of their SMEs. Specifically, financial performance values have a ss-value of 0.576 and a p-value of <0.0001, non-financial performance values have a ss-value of 0.275 and a p-value of <0.0001. Practical implications In order to improve the performance of graduate-owned SMEs, universities should strive to equip graduates with self-confidence, which will enable them to utilize their entrepreneurial competences acquired through the entrepreneurship course programs. This will enable them to tackle business environmental challenges and be able to run successful businesses. Originality/value The results of this study extend the use of the self-efficacy theory in explaining the performance of graduate-owned SMEs in Tanzanian. Further, the study focused on ESE as a specific domain developed from entrepreneurship learning for entrepreneurial outcomes. Therefore, the study engaged graduate entrepreneurs who majored in entrepreneurship, which has not been the focus in most studies.