Empirical analysis using structural equation modeling shows CEO traits enhance innovation capabilities in resource-constrained MSMEs, suggesting leadership development is essential.
<ns3:p>Background Innovation in micro, small, and medium-sized enterprises (MSMEs) often stems from CEO traits and leadership. This study examines how CEO personality, transformational leadership, and innovative behavior drive innovation capabilities in Colombian MSMEs. Methods Grounded in the HEXACO model and transformational leadership theory, a mediation model was tested using data from 106 CEOs. Structural equation modeling (SEM) assessed relationships among Openness to Experience, Conscientiousness, leadership, innovative behavior, and 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 enhanced firms’ innovation capabilities, confirming mediation from CEO traits through leadership to organizational outcomes. Conclusions CEO personality and leadership are key to 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.</ns3:p>
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Camaño et al. (2025) studied this question.
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