Abstract:
The research investigates the relationship between Entrepreneurial Psychological
Capital (EPC) and Firm Performance Expectations (FPE), emphasizing the mediating
role of Entrepreneurial Orientation (ENO). A quantitative study design was employed,
utilizing convenience sampling to collect survey data from 90 entrepreneurs in the Jaffna
District. Data analysis was performed using SPSS 22 and SmartPLS 4 software,
implementing structural equation modeling through the partial least square’s method.
The findings indicate that EPC exerts a direct influence on FPE, with variables such as
achievement motivation, need for cognition, and internal locus of control identified as
critical factors driving business success. Additionally, ENO was found to serve as a
significant mediator between EPC and FPE. Entrepreneurs exhibiting personal attributes
that encourage proactive, risk-taking, and innovative behaviors are more inclined to
adopt an entrepreneurial orientation, thereby enhancing business performance. These
results underscore the importance of cultivating robust personal characteristics and an
entrepreneurial mindset among entrepreneurs to improve business outcomes. The study
contributes to the literature by elucidating the direct impact of EPC on FPE and the
essential mediating function of ENO. Moreover, it stresses the significance of nurturing
both personal traits and entrepreneurial orientation to optimize business results. The
contributions of the study highlight the dual influence of EPC on FPE, both directly and
indirectly through ENO. Future research should consider incorporating diverse samples
and employing objective measures of firm performance to further validate the proposed
relationships.
