Social Capital and Entrepreneurial Orientation on Micro- business Performance: A Study on Business Actors in East Nusa Tenggara

Micro-enterprises play a crucial role in regional economic development, particularly inemployment creation and poverty reduction. However, their performance in less-developedregions remain constrained by limited resources and structural challenges. This studyexamines the effects of social capital and entrepreneurial orientation on micro-enterprisesperformance in East Nusa Tenggara, Indonesia. Using a quantitative explanatory approach,data were collected through a survey of 50 micro-entrepreneurs in Kupang City and analyzedusing Partial Least Squares–Structural Equation Modeling (PLS-SEM). The results indicatethat both social capital and entrepreneurial orientation have positive and significant effects onmicro-enterprise performance. Entrepreneurial orientation, reflected in innovativeness,proactiveness, and risk-taking, exhibits a stronger influence than social capital. Furthermore,the two variables jointly explain 58.7% of the variance in micro-enterprise performance,indicating substantial explanatory power. These findings highlight that non-financial factorsplay a vital role in enhancing micro-enterprise performance, particularly in regionscharacterized by strong social ties but limited institutional support. This study contributes tothe entrepreneurship literature by integrating social capital and entrepreneurial orientationwithin a single empirical model and offers practical implications for micro-enterprisedevelopment policies that emphasize not only financial assistance but also the strengthening ofsocial networks and entrepreneurial capabilities.