Government Policy as a Catalyst: Linking Entrepreneurial Mindset to SME Success

Abstract

Existing literature underscores the relevance of the entrepreneurial mindset and government policy initiatives on sustainable business growth. Yet, many small and medium enterprises (SMEs) in developing countries like Nigeria fail to achieve the desired level of success, as they are persistently prone to low competitiveness, low patronage, low profitability and premature collapse. So, this research highlighted the crucial influence of government policy on entrepreneurial mindset and SME success. This research draws support from the resource-based view (RBV) and the self-determination theory (SDT) to examine the moderating effect of government policy on the relationship between the multidimensional entrepreneurial mindset and SME success. In establishing causality between the variables, a personally administered questionnaire was used to collect data and responses from 219 SME managers, which was empirically analyzed using Statistical Package for Social Sciences (SPSS) and Smart PLS version 3.0. According to findings, the effect of elaborating mindset and implemental mindset on SME success was statistically established. Yet, the findings showed that government policy has a direct significant effect on the relationship between elaborating mindset, implemental mindset and SME success. However, it was further established that the effect of automatic mindset on SME success lacks statistical support, even when moderated by government policy. Therefore, the findings bring an important insight into the domain of government policy, entrepreneurial mindset and SME success research.

Keywords

Entrepreneurial mindset government policy small and medium enterprises,success

1. Introduction

In the contemporary business landscape, the growth of small and medium enterprises (SMEs) is crucial to developed and emerging economies. Khan et al. (2022) asserted that successful SMEs contribute meaningfully to the advancement of the global economy, in terms of wealth creation, contribution to gross domestic product (GDP), creation of employment opportunities and improvement in living standards and well-being of people. Subsequently, governments across the globe adopt diverse policy initiatives to help SMEs grow and succeed in marketplace. In the same vein, Ahimbisibwe et al. (2023) and Khan et al. (2022) proclaimed that government policies in the form of provisions of finances, tax reliefs, incentives and training programmes are paramount to support entrepreneurs in nurturing the ‘success’ mindset and achieving sustainable growth. Hence, performance indicators are used as a distinguishing factor between successful and unsuccessful SMEs.

Accordingly, Ahimbisibwe et al. (2021) posited that SMEs that achieve remarkable success in domestic and foreign environments recorded optimum performance levels in terms of sales growth, a rise in profitability, an increase in competitiveness and market share, as well as goal accomplishment and customer satisfaction. Correspondingly, Karimi et al. (2023) and Oluwaseun et al. (2020) reported that SMEs in Europe, America and Asia (developed and emerging economies) are more inclined to success than their counterparts in African countries like Nigeria, due to inadequate government support and inability to cultivate an entrepreneurial growth mindset. Interestingly, it is empirically evident that government policy support mechanisms are crucial for SMEs to achieve sustainable growth (Khan et al., 2022; Le et al., 2020).

Yet, Kyal et al. (2022) investigated the effect of government intervention as a moderating variable on the relationship between entrepreneurial orientation and performance of SMEs. Additionally, Otache and Usang (2022) have statistically tested the effect of government support as a moderator on the relationship between innovation capability and SME performance. However, literature is scanty on the influence of government policy on SME success, as it focuses on the influence of policy-related factors or government support on SME development and survival (Khan et al., 2022; Le et al., 2020). Creating a lacuna on the role of government policy in the realm of entrepreneurial mindset and SME success research. Hence, there is a dearth of empirical evidence on how government policy affects entrepreneurial mindset and drives SME success in the context of emerging economies.

Nevertheless, few empirical studies have examined the effect of entrepreneurial mindset and its dimensions that comprised cognition and opportunity recognition, on SME growth/performance (Daspit et al., 2023; Lanivich et al., 2021; Vivian & Ihinmoyan, 2022). However, the effect of entrepreneurial mindset dimensions such as elaborating mindset, implemental mindset and automatic mindset on SME success with moderating government policy has not been empirically established in the literature. Accordingly, scholars have advocated for future research that can bring new insights into the effect of a multifaceted entrepreneurial mindset on SME success with intervening mechanism that will strength the association (Cunningham et al., 2023; Zhang & Ayele, 2022). Also, Kuratko et al. (2021) suggested that future research can examine how each dimension of the entrepreneurial mindset is reshaped by specific contextual factors to accelerate SME success.

Although many studies exist on the impact of the entrepreneurial mindset within the SME sector in Nigeria (Vivian & Ihinmoyan, 2022), the moderating effect of government policy on the relationship between entrepreneurial mindset and SME success at a multidimensional level has not been investigated. Accordingly, Pidduck et al. (2023) advocated for future research that can examine how a moderator reshapes the effect of each dimension of entrepreneurial mindset on SME performance outcome. Therefore, this research is designed to bring new insights on the effect of government policy on the relationship between entrepreneurial mindset dimensions, such as elaborating mindset, implemental mindset and automatic mindset and SME success, in the context of Kano, Nigeria. The objective of this research is threefold. One, to investigate the effect of a multidimensional entrepreneurial mindset on SME success. Two, to examine the effect of government policy on SME success. And, lastly, analyze the effect of government support on the relationship between entrepreneurial mindset and SME success. The article is structured based on the following sections: Introduction, Literature Review, Methodology, Data Analysis and Discussion of Findings and Research Implications and Limitations.

2. Literature Review

2.1. Theoretical Background and Research Hypotheses

Several scholars like Lanivich et al. (2021) contend that the success of business enterprises is largely influenced by the disposition of entrepreneurs to develop relevant attributes and act in an entrepreneurial way, alongside the ability of entrepreneurs managing such entities to access resources from various supportive government policies, to achieve sustainable growth in the business environment. Therefore, this research is underpinned by two theories. One is the self-determination theory (SDT); and the second is the resource-based view (RBV). The SDT is built on the premise that it provided comprehensive framework for understanding the psychological needs of humans to succeed (Lanivich et al., 2021). Applying the theory in the context of this research, SDT offers better explanations of the connection between entrepreneurial mindset and SME success. On this basis, the SDT theory is relevant in understanding that the entrepreneurial mindset encompasses innate beliefs which were characterized by courage, determination and confidence to succeed through spotting opportunities and responding to evolving market trends. Yet, the theory is relevant in understanding that the entrepreneurial mindset involves intrinsic motives that propel entrepreneurs to be obsessed with the desire to satisfy innate psychological needs by nurturing a growth mindset, striving for excellence and venturing into entrepreneurial thinking, feeling and action. Hence, this study assumed that an entrepreneurial mindset can have a significant influence on the sustainable growth and success of firms.

On the other hand, the RBV focused on the ability of entrepreneurs to harness resources from within and outside the enterprise and regenerate/transform such resources as a source of competitive advantage, sustainable growth, survival and realization of superior performance (Barney, 1991). According to Khan et al. (2022), RBV has been universally applied to explain how enterprises enhance competitiveness, improve performance and achieve sustainable growth and success, through the utilization of rare, valuable, inimitable and non-substitutable resources. Applying RBV in the current research context, the theory signified that entrepreneurs can access enormous resources from government policy support initiatives, to overcome the problem of inadequate finances, access new technology and master the art of nurturing an entrepreneurial growth mindset from government-sponsored entrepreneurship programmes, which in the long run can help SME succeed and achieve sustainable growth. Hence, this study assumed that government policy is crucial in shaping entrepreneurial mindset and driving SME success, see Figure 1.

2.2. Entrepreneurial Mindset and SME Success

Pidduck et al. (2023) conceptualized mindset in terms of entrepreneurial dispositional, value and opportunity beliefs, orientation and entrepreneurial behaviour. The dispositional beliefs (state of mind) entail a feeling of optimism, belief in positive expectancy/information in mind, and the ability to execute certain imaginative moves and generate entrepreneurial outcomes. Yet, value beliefs (doing entrepreneurial things) involved things like opportunity seeking, creativity, risk taking, autonomous decision making, investing in possibilities and problem-solving skills. On the other hand, opportunity beliefs (response to stimuli) focus more on cognitive processes demonstrated in the form of perceiving opportunities, reflecting conditions surrounding opportunities, goal setting and responding to environmental stimuli. Hence, the belief process, generally, according to entrepreneurship literature, is based on the basis that opportunity exists, the opportunity is exploitable and pursuing the opportunity is desirable achieve a valuable entrepreneurial outcome.

A mindset geared towards entrepreneurship can be viewed as a perspective focused on growth, through which people encourage adaptability, originality, ongoing advancement and rejuvenation within organizations (Ireland et al., 2003, 2009; Ireland & Webb, 2007; Kuratko & Audretsch, 2009). Uncertainty can work to your advantage if you establish and utilize an entrepreneurial attitude. Therefore, an entrepreneurial attitude is essential for establishing new enterprises as well as revitalizing current ones (Draghici et al., 2014; Harel, 2025; Mishra et al., 2020). Traits of an entrepreneurial mindset encompass creativity, persuasion, self-drive, persistence and curiosity, adaptability and responsibility. Neneh’s (2012) research indicated that the absence of an entrepreneurial mindset leads to the elevated failure percentage of small and medium enterprises in South Africa. The writer highlighted the necessity of comprehending elements that are closely linked to the mindset of an entrepreneur. These elements include ongoing learning, a growth mindset, innovation, drive and willingness or tendency to take risks. An entrepreneurial mindset can facilitate business growth. Possessing an entrepreneurial mindset will foster innovation. Individuals have confidence in those who appear to be competent. In opposition, a business-minded Mindset consistently limits flexible working hours. Additionally, business owners will not make a significant income during the initial year (or longer) of the creation of their venture.

Nevertheless, entrepreneurial orientation is made up of competitiveness (need achievement), autonomy (internal locus of control), innovativeness (tolerance for ambiguity), risk-taking (propensity to taking risk) and proactiveness (alertness to seize opportunities). Similarly, Kuratko et al. (2021) defined entrepreneurial mindset as the ability to mobilize resource and act in an entrepreneurial manner (entrepreneurial behaviour); think and perceive opportunities (cognitive aspect); and feel optimistic and disposed to pursue entrepreneurial opportunities, even under uncertainty. Equally, Cunningham et al. (2023) described the entrepreneurial mindset as a business growth orientation that involves opportunity recognition and cognitive process. Hence, an entrepreneurial mindset is a cognitive process and entrepreneurial action that encompasses dispositional optimism, tolerance of ambiguity, propensity to risk-taking and alertness to seize opportunities (Cui, 2021).

Accordingly, Ersarı and Naktiyo (2022) empirically established that the entrepreneurial mindset has a positive and significant effect on the performance of enterprises. Additionally, Mathisen and Arnulf (2014) conceptualized entrepreneurial mindset as multidimensional construct that encompassed elaborating mindset which is characterized by feasibility and desirability—ability to visualize expected outcome and reflect value of entrepreneurial action in any situational context; implemental mindset which is characterized by determination to pursue opportunities and desire to achieve goals; and automatic mindset which is characterized by being obsessed to respond, having strength to act and compulsive to become successful in business. Hence, each of the entrepreneurial mindset dimensions influences the performance of SMEs differently (Cunningham et al., 2023). Therefore, it is postulated that,

H₁: Elaborating mindset has a significant effect on SME success.

H₂: Implemental mindset has a significant effect on SME success.

H₃: Automatic mindset has a significant effect on SME success.

2.3. Relationship Between Government Policy and SME Success

According to Prasannath et al. (2024), government policy is wide, encompassing concepts involving direct and indirect support policies, as well as financial and nonfinancial. While direct policy is controlled by the government and is mostly in the form of assistance or financial support, such as risk-sharing schemes, guarantees, loans and grants that the government offers to business enterprises. On the other hand, the indirect policy is a form of assistance that is nonfinancial in nature and comprises enterprise development policies, taxes, regulations and a conducive business ecosystem, provided by the government for business enterprises to thrive. Yet, the financial government policy encompasses government support, such as loans and grants. However, the nonfinancial government policy comprises government support for innovation, promotion of technology, consultation, advice, information and training and development programmes.

Still, Le et al. (2020) conceptualized government policy into insurance policy, tax support, preferential banking policy, financial support, business administration laws and supportive environment networking. In contrast, Yang and Yu (2022) conceptualized government policy into formal and informal institution support that enables managers to effectively carry out business operations within the designated regulatory framework. Furthermore, Khan et al. (2022) described government policy in terms of the provision of assistance/support and the establishment of regulations/laws for business sector growth and development. Hence, government policy is a broad concept that comprises gender policies, social policies, regional development policies, labour market policies, trade policies and regulatory policies (Kyal et al., 2022; Talukder & Tripathi, 2021).

Notwithstanding, Zhang and Ayele (2022) asserted that favourable government policy favours entrepreneurship and offers entrepreneurs a kind of support to regenerate better ideas and explore opportunities that are advantageous to enterprises in terms of offering greater value to customers, increasing market share and boosting the level of profitability. Also, Otache and Usang (2022) empirically established that government policy, conceptualized into financial support/palliative measures such as granting of credit facilities, tax and interest rate reduction, is crucial for SMEs to achieve superior performance. Equally, Kurniawan et al. (2023) found that government financial support helps SMEs to recover from financial shock/crisis and achieve sustainable financial performance. Thus, it is hypothesized that,

H₄: Government policy has a significant effect on SME success.

2.4. Moderating Effect of Government Policy

According to Lanivich et al. (2021), harsh government policies within a controlled business environment do not generally favour entrepreneurship, because workers can interpret such policies as counterproductive due to rigidity and they do not provide entrepreneurs with the autonomy to act and derive advantage from every spotted opportunity. Nevertheless, Yang and Yu (2022) contend that government policy support is an effective tool in shaping the future of business enterprises, especially in mitigating risk, aiding innovation, fostering growth, understanding market opportunities and boosting organizational performance. Yet, Zhang and Ayele (2022) tested the effect of government policy as a mediating variable. According to findings, government policy has a significant effect on the performance of SMEs. Equally, the findings indicated that government policy significantly mediated the effect of entrepreneurial orientation on SMEs performance.

Additionally, the study of Kyal et al. (2022) has examined the effect of government intervention as a moderator. The result showed that government intervention has a direct influence on SME performance, and also, succeeded in strengthening the effect of entrepreneurial orientation on SME performance. However, the moderating effect of government support on the relationship between different facets of entrepreneurial mindset and SME success is not evident in the literature. Hence, favourably perceived government policies enabled entrepreneurs to develop a mindset of exploring every circumstance to their advantage, and possess entrepreneurial competencies to work toward the accomplishment of self-directed goals and attainment of optimum performance level (Lanivich et al., 2021). Thus, it is postulated that,

H₅: Government policy moderates the effect of an elaborating mindset on SME success.

H₆: Government policy moderates the effect of implemental mindset on SME success.

H₇: Government policy moderates the effect of automatic mindset on SME success.

3. Materials and Methods

This study is a quantitative research that employs a cross-sectional design. According to Sekaran and Bougie (2019), quantitative research enables researchers the opportunity to gather primary data from respondents, test statistical inferences and generalize the outcome to the entire phenomenon under investigation. In congruence to this, a quantitative approach was deemed preferable in unfolding the causal effect of government policy in shaping entrepreneurial mindset and driving SME success. A population of 79,328 SMEs operating in Kano State, Nigeria, was used as the basis to determine the sample size of 382 SMEs (Krejcie & Morgan, 1970). Specifically, Kano was chosen because it has the largest concentration of SMEs in Northern Nigeria, which makes Kano a commercial hub, and popularly known as the ‘centre of commerce’ that connects Nigerian businesses with their counterparts in neighbouring countries like Niger, Chad, Mali, Togo, Ghana and Cameroon (SMEDAN, 2021).

Accordingly, a systematic random sampling technique was employed, relying on a list of the SMEs obtained from the Small and Medium Enterprises Development Agency (SMEDAN) office in Kano. This technique was employed because it is assumed to be an unbiased method of sample selection that accorded every member of a population equal opportunity of being selected (Creswell & Creswell, 2018). SPSS and Smart PLS software were utilized to run data analysis. SPSS was used to run descriptive statistics, which involved an analysis of the respondents’ profiles. On the other hand, the Smart PLS was applied in testing causal inferences. Hence, it is a robust technique of testing cause-and-effect analysis (Gorondutse & Hilman, 2018; Hair et al., 2019).

3.1. Measures

In this study, all instruments that measure research variables were adopted. The scale for SME success consists of four items adopted from Otache and Usang (2022). On the other hand, the entrepreneurial mindset scale was adopted from Mathisen and Arnulf (2014) and was divided into elaborating mindset (five items), implemental mindset (five items) and automatic mindset (four items). However, the government policy scale contains eight items adopted from Le and Loan (2022). Thus, questions were measured on a five-point Likert scale ranging from Strongly Agree to Strongly Disagree. In addition, the measure was tested and found valid and reliable.

3.2. Data Collection

A structured questionnaire, designed into sections in order to elicit responses related to demographic and continuous variables, was self-administered to 382 owners and managers of SMEs in Kano, Nigeria. Also, to facilitate the questionnaire administration and overcome the low response rate, two research assistants were employed to speed up the data collection process. Thus, the hand delivery method yielded a response rate of 226 retrieved questionnaires out of the total 382 distributed questionnaires. Whereas, 156 questionnaires were unreturned, accounting for 40.8% of the distributed questionnaires.

3.3. Data Analysis

The data analysis was done in phases. The first phase featured preliminary data analysis, which was conducted using statistical procedures advocated by Tabachnick and Fidell (2019) and Podsakoff et al. (2024), that involved data cleaning, testing of non-response and common method bias, in ensuring that the data are suitable for multivariate analysis. Based on this, all responses were input into SPSS and missing values and outliers were checked. According to the outcome, a few cases of missing values were noticed and replaced using the series mean through the Transform function of SPSS. Yet, in the course of checking outliers, seven cases of univariate outliers were detected and completely removed the data set for having extreme scores above 3.29. Thus, bringing the number of usable questionnaires to 219, which accounted for 57.3% of the valid response rate and is also considered suitable for data analysis.

On the other hand, the non-response bias was evaluated by grouping responses into early using 110 questionnaires, and late 109 questionnaires, as a basis for comparing responses. The outcome depicted that there was no wide disparity among the mean scores, which were significant at less than 0.05. Similarly, Harman’s single-factor test was used to examine common method bias as criterion for overcoming spurious correlations and measurement-induced errors among variables due to the adoption of repeated items in the research questionnaire. Also, the outcome demonstrated that common method bias does not exist, as the per cent of variance extract is lower than 50.

Additionally, the second phase featured descriptive statistics, and the outcome showed that most of the SMEs were owned and managed by male respondents (171; 78%). Signifying that (48; 22%) SMEs were owned and managed by female respondents. Still, the result showed that most of the respondents are within the age bracket of 40–50 years (99; 45%), followed by respondents who are above 50 years (67; 31%). Suggesting further that there are few younger people who are involved in the management of SMEs (53; 24%). Also, it was found that the majority of respondents have business experience of 5–10 years, followed by 1–5 years and 11 years and above. Suggesting that new startups are springing up and are within the first 5 years of gestation. Hence, a larger percentage of SMEs were concentrated in the city centre (103), with the rest spread across major townships in the State (Table 1).

Table 1.

Respondents’ Profile.

S/No.	Variable		Frequency	Percentage
1.	Gender	Male	171	78
		Female	48	22
2.	Age	30–40 years	53	24
		40–50 years	99	45
		51 years and above	67	31
3.	Business experience	1–5 years	76	35
		5–10 years	81	37
		11 years and above	62	28
4.	Business location	City	103	47
		Townships	116	53

4. Results and Discussions

4.1. Measurement Model

The first phase of the data analysis seeks to establish the reliability and validity of questionnaire items used in this study. Accordingly, Figure 2 shows that all the measures used in this study have an adequate level of reliability and validity, in terms of outer loadings, composite reliability and convergent and discriminant validity.

Similarly, Table 2 shows that all items that measure the latent variables have satisfactory outer loadings above 0.6. Yet, the latent constructs—SME success, elaborating mindset, automatic mindset and government support have a sufficient level of composite reliability and average variance extracted (AVE) above 0.8 and 0.5. Notwithstanding, 2 items that measure implemental mindset were deleted as suggested by Hair et al. (2019), in order to achieve an AVE of 0.5. Suggesting that the latent variables have a high level of reliability and validity.

Table 2.

Reliability and Validity of Variables.

	Items	Outer Loadings	Cronbach’s Alpha	Composite Reliability	AVE
SME success	PF1	0.841	.779	0.856	0.599
	PF2	0.838
	PF3	0.677
	PF4	0.726
Elaborating mindset	ELM1	0.742	.875	0.896	0.635
	ELM2	0.844
	ELM3	0.830
	ELM4	0.866
	ELM5	0.688
Implemental mindset	IPM1	0.866	.878	0.923	0.801
	IPM2	0.943
	IPM3	0.874
Automatic mindset	ATM1	0.889	.823	0.869	0.628
	ATM2	0.885
	ATM3	0.707
	ATM4	0.661
Government policy	GP1	0.917	.959	0.966	0.781
	GP2	0.700
	GP3	0.780
	GP4	0.910
	GP5	0.919
	GP6	0.939
	GP7	0.938
	GP8	0.934

Note: AVE: Average variance extracted; SME: Small and medium enterprise.

Additionally, Table 3 shows the result of discriminant validity, which was assessed using Fornell and Larcker’s criterion. According to the outcome, the square root AVE for each construct is higher than the correlation of other constructs along the diagonal, both in rows and columns. Suggesting that the latent variables have an acceptable level of discriminant validity.

Table 3.

Discriminant Validity.

	Automatic Mindset	Elaborating Mindset	Government Policy	Implemental Mindset	SME Performance
Automatic mindset	0.792
Elaborating mindset	0.711	0.797
Government policy	0.650	0.753	0.884
Implemental mindset	0.592	0.768	0.854	0.895
SME success	0.409	0.406	0.253	0.248	0.774

Note: SME: Small and medium enterprise.

4.2. Structural Model

The second phase of the data analysis assesses the cause-and-effect relationship between exogenous variables and endogenous variables. Figure 3 shows the result of the structural model assessment with the moderator. Accordingly, the R² showed that elaborating mindset, implemental mindset, automatic mindset and government support explained 26.2% variance of SME success. Yet, the f² showed that implemental mindset (0.047) and government support (0.044) have a stronger effect on SME success. On the contrary, the elaborating mindset (0.020) and the automatic mindset (0.007), have a lower effect on SME success. Furthermore, the findings indicated that government policy has the strongest effects on the relationship between elaborating mindset and SME success (0.019) and implemental mindset and SME success (0.049). However, government policy has the lowest effect on the relationship between automatic mindset and SME success (0.000).

Still, the outcome in Table 4 shows that elaborating mindset (t-value = 1.918, p value < .02), implemental mindset (t-value = 2.191, p value < .01), and government support (t-value = 2.177, p value < .01) have a significant effect on SME success. On the other hand, the automatic mindset (t-value = 1.145, p value > .01) has no significant effect on SME success, suggesting that H₂, H₃ and H₄ are statistically supported, while H₁ lacks statistical support. Furthermore, the results show that the moderating effect of government support on the relationship between elaborating mindset and SME success (t-value = 1.990, p value < .02), and implemental mindset and SME success (t-value = 4.500, p value < .00), is statistically established, whereas the moderating effect of government policy on the relationship between automatic mindset and SME success (t-value = 0.014, p value > .01) lacks empirical evidence, suggesting that H₅ and H₆ are statistically supported. However, H₇ lacks statistical support.

Table 4.

Hypotheses Testing Outcome.

	Beta	Standardize Beta	T Values	p Values	Decision
Automatic mindset → SME success	0.171	0.149	1.145	.126	Not supported
Elaborating mindset → SME success	0.367	0.192	1.918	.028	Supported
Government policy → SME success	−0.858	0.394	2.177	.015	Supported
Implemental mindset → SME success	0.721	0.329	2.191	.014	Supported
Moderating effect 1 → SME success	−0.361	0.181	1.990	.024	Supported
Moderating effect 2 → SME success	0.436	0.097	4.500	.000	Supported
Moderating effect 3 → SME success	−0.002	0.158	0.014	.495	Not supported

Note: SME: Small and medium enterprise.

5. Discussion

Although the effect of the entrepreneurial mindset in different domains has been documented in the entrepreneurship literature; however, there are limited studies that have examined the effect of the entrepreneurial mindset while taking into account its multifaceted nature. Yet, the effect of government policy in the realm of entrepreneurial mindset and SME success is not fully evident in the literature. Therefore, this study empirically examined the moderating effect of government policy in shaping different facets of entrepreneurial mindset and driving SME success in an emerging economy. Also, the study illuminated existing literature and provided new insights on the effect of the multidimensional entrepreneurial mindset construct on SME success, as well as the moderating effect of government policy on the relationship between elaborating mindset, implemental mindset, automatic mindset and SME success in the Nigerian context.

Interestingly, the outcome revealed that SME success is strongly enhanced by entrepreneurial mindset and government policy. Thus, lending support to five out of seven hypotheses. Specifically, the outcome underscores the direct effect of elaborating mindset and implemental mindset in boosting SME success. Suggesting that entrepreneurs who nurture the growth mindset by visualizing the expected outcome, reflecting the value of entrepreneurial endeavour, pursuing opportunities and being determined to achieve goals, are more likely to succeed in marketplace. Therefore, the current finding concurred with that of Lanivich et al. (2021) and Oluwaseun et al. (2020), who empirically established a significant connection between entrepreneurial mindset and SME /enterprise success.

Notwithstanding, the study found that an automatic mindset lacks statistical evidence to foster SME success. Therefore, the insignificant effect of automatic mindset on SME success can be traced to the fact that the entrepreneurs lack the mindset that propels them to develop the necessary competence and capability to act courageously and respond to evolving market trends. In the same vein, the findings concurred with the study of Cunningham et al. (2023), who established that each dimension of entrepreneurial mindset has a differential effect on SME performance outcome.

Furthermore, the outcome indicated that government policy exerts a significant effect on driving SME success. Buttressing the assertion that government intervention and support initiatives in terms of provision of adequate finances, tax subsidies, incentives and entrepreneurship training programmes are key to SME growth and development. The findings corroborated a similar study by Le et al. (2020) who found that policy-related factors have a significant influence on the survival and development of SMEs. Again, the finding accentuated the effect of government support on SME development (Khan et al., 2022). In addition, the outcome demonstrated that government support has played a key role as a moderating variable and therefore, remain critical factor that strengthened the effect of entrepreneurial mindset on SME success.

Categorically, the study found that government policy exercised significant influence on the relationship between the elaborating mindset and SME success, and the implemental mindset and SME success. However, the moderating effect of government support on the relationship between automatic mindset and SME success could not be established in this study. Signifying that government policy emerged as an important factor that shapes the entrepreneurial mindset and drives SME success. The current findings corroborated those of Zhang and Ayele (2022), which established that government policy favours entrepreneurs who offer better market offerings and explore opportunities. Therefore, the finding contributed to the literature, in the sense that elaborating mindset and implemental mindset dimensions of entrepreneurial mindset exert a direct significant effect on SME success, both as predicting variables and even when moderated by government policy. In contrast, the automatic mindset, either as an independent variable or even when moderated by government policy failed to statistically drive SME success. Symbolizing that the entrepreneurs are not always inquisitive to respond to evolving market trends or willing to leverage government policy/support initiatives to succeed in domestic and foreign scenes.

6. Conclusion

6.1. Implications

A lot of theoretical and practical implications can be drawn from the research findings. To begin with, the theoretical implications. First, this research integrated RBV and SDT into a single framework. The RBV was particularly used in this research to offer valuable insights on how SMEs can benefit from government policies through technology transfer and other support initiatives to stimulate access to finance and entrepreneurship training, and help entrepreneurs to nurture an entrepreneurial growth mindset and succeed in marketplace. On the other hand, the SDT proclaimed that the innate desire to satisfy psychological needs is the propelling factor that motivates entrepreneurs to think, feel and act in an entrepreneurial way to achieve growth and enterprise succeed. Second, unlike previous studies, this research is among the few that investigated the causal effect of entrepreneurial mindset dimensions on SME success, as most prior studies have neglected the multidimensionality aspect by investigating the relationship at the construct level. Third, the current research enriches the body of literature on the moderating effect of government policy in the realm of entrepreneurial mindset and SME success.

Specifically, the current research illuminated the body of literature in three distinct ways. (a) The research expanded the scope of entrepreneurship literature on the multidimensionality of the entrepreneurial mindset and its corresponding effect on SME success. (b) The research contributed to the body of knowledge on the direct causal influence of government policy on SME success. (c) The research provided empirical evidence on the moderating effect of government policy in strengthening the causal relationship between entrepreneurial mindset dimensions and SME success. Making it the first to establish how the elaborating mindset and implemental mindset were reshaped by government policy to drive SME success. Therefore, the current research investigation is the first to focus on how government policy influences entrepreneurial mindsets and success among Nigerian SMEs that are operating in various sub-sectors such as manufacturing, services, food and beverages, shoes, and agri-businesses and so on.

From the practical viewpoint, the outcome has a number of implications for existing and potential entrepreneurs, regulatory bodies, educational institutions and policy makers. First, the findings suggest that entrepreneurs must nurture the entrepreneurial growth mindset, which is inevitable in promoting business success. Second, the findings demonstrate that entrepreneurs must understand the need to accord greater emphasis on elaborating mindset and implemental mindset in seeking to achieve the desired level of SME success. Third, the finding implies that entrepreneurs must realize the importance of accessing a wider range of government support initiatives/programmes, through collaboration with governmental institutions and ministries, in order to stimulate growth. Hence, entrepreneurs adopt government policy as a mechanism to reshape their entrepreneurial mindset, by visualizing the value of their strategic actions and continuously pursuing opportunities that are critical in boosting productivity, market share, competitiveness, profitability and overall organizational performance.

6.2. Limitations

Although this research contributed to existing literature on the effect of entrepreneurial mindset and SME success, as well as the effect of government policy on entrepreneurial mindset and SME success. Yet, it has a number of limitations that request further research investigations. First, the research finding was based on empirical analysis of data obtained using a questionnaire from homogenous samples in one of the 36 states of Nigeria. Future researchers can investigate the framework in other contexts. Second, this research adopted quantitative research, and as such, future research can adopt a mixed-mode in order to collect data from a diverse group of respondents by combining a questionnaire and interview, as this will help in providing an in-depth understanding of the circumstances surrounding causality between government support, entrepreneurial mindset and SME success. Lastly, this research focused on the effect of government support on the relationship between three dimensions of entrepreneurial mindset and SME success. Therefore, future research can extend the model by analyzing how government support moderates the effect of other dimensions of entrepreneurial mindset on SME success.

Footnotes

Authors’ Contribution

Abdullahi Hassan Gorondutse: Conceived the research idea, designed the study, conducted data analysis, and drafted the manuscript.

Garba Muddaha: Assisted to collect data, add idea and contributed to manuscript writing and provided critical revisions.

Ahmad Said Ibrahim Alshuabi: Reviewed literature, contributed to manuscript drafting, and provided supervision throughout the project.

Muhammad Aminu Isa: Assisted to collect and analyze data, contributed to manuscript writing draft and provided critical revisions.

Gamal Abdualmajed Ali: Assisted to review literature, contributed to manuscript drafting, proof read the article and provided supervision throughout the project.

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.

Ethical Declaration

The authors abide by all the ethics involved in this academic work and have not submitted it to any other journal.

Funding

The authors received no financial support for the research, authorship and/or publication of this article.

ORCID iDs

Abdullahi Hassan Gorondutse

Gamal Abdualmajed Ali

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