ENTREPRENEURIAL Competencies, Financial Literacy and Innovation as Determinants of Business Longevity of MSMEs in Davao Region: A Path ANALYSIS

Abstract

Business longevity is vital for assessing sustainability and ensuring continuity. Accordingly, the sustainability of a business is significantly dependent on its longevity. This study primarily aims to determine the factors significantly contributing to the Business Longevity of Micro, small, medium enterprisers (MSMEs) in the Davao Region. A descriptive-correlational research design was employed alongside path analysis to comprehensively examine the interrelationships among variables. Data were gathered using survey questionnaires, which were administered to 300 owners, managers, and supervisors of MSMEs in Davao Region, Philippines, using proportional stratified random sampling. The statistical tools used in the study are Mean, Pearson R, and Path Analysis. Based on the result, the level of Entrepreneurial Competencies and Financial Literacy of the MSME owners, managers, and supervisors is high. Also, the level of Innovation and Business Longevity among MSMEs is evaluated as high. Results revealed that there is a significant relationship between entrepreneurial competencies and financial literacy, financial literacy and innovation, as well as entrepreneurial competencies and innovation. Moreover, it was determined that only entrepreneurial competencies and innovation have a direct effect on business longevity, with entrepreneurial competencies having the most significant effect. Financial Literacy has an indirect impact on business longevity through innovation. Results also showed that entrepreneurial competencies and financial literacy demonstrated a significant relationship, as indicated by path analysis.