Background Innovation in micro, small, and medium-sized enterprises (MSMEs) often stems from CEO traits and leadership. While prior research highlights the role of executive traits in innovation, less is known about the mechanisms through which these traits translate into firm-level innovation capabilities in emerging-economy MSMEs. Methods Grounded in Upper Echelons Theory, the HEXACO personality framework, and transformational leadership theory, this study tests a sequential mediation model using data from 106 CEOs of Colombian MSMEs. Structural equation modeling (SEM) was employed to examine whether transformational leadership and innovative behavior mediate the relationship between CEO personality traits (Openness to Experience and Conscientiousness) and organizational innovation capabilities. Results The model showed good fit (CFI = 0.92, TLI = 0.90, RMSEA = 0.09, SRMR = 0.07). Openness and Conscientiousness significantly predicted transformational leadership, which in turn promoted innovative behavior. Innovative behavior subsequently enhanced firms’ innovation capabilities, confirming (through bootstrapped indirect effects) mediation from CEO traits to innovation capabilities through transformational leadership and innovative behavior. Conclusions The findings indicate that CEO personality and leadership are key to indirectly fostering innovation in resource-constrained MSMEs. The findings extend upper-echelons theory and suggest leadership development is key to improving innovation performance in emerging-economy MSMEs.
Parodi-Camano et al. (Wed,) studied this question.