The Effect Of Transformational Leadership And Local Wisdom On Msme Performance With Consumer Satisfaction As A Mediating Variable: A Study Of The Food And Beverage Sector In Sumbawa Regency

Wahyu Haryadi

doi:10.63922/ijebir.v5i06.6657

Wahyu Haryadi Doctoral Program in Management Science, Universitas Dr. Soetomo, Surabaya, Indonesia and Faculty of Economics and Business, Universitas Samawa, Sumbawa, Indonesia

DOI: https://doi.org/10.63922/ijebir.v5i06.6657

Keywords: transformational leadership, local wisdom, consumer satisfaction, MSME performance, PLS-SEM

Abstract

Micro, small, and medium enterprises (MSMEs) in emerging regions face a structural paradox: the number of business units keeps growing, yet productivity and competitiveness remain low. This study examines the effect of transformational leadership and local wisdom on MSME performance, and tests consumer satisfaction as a mediating variable, in the food and beverage sector of Sumbawa Regency, West Nusa Tenggara, Indonesia. The study applies an explanatory quantitative design with a cross-sectional survey. Data were collected through a structured questionnaire from 100 MSME owners and managers selected by purposive sampling, after the instrument had been validated on 50 respondents. Data were analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM) with SmartPLS, followed by bootstrapping with 500 subsamples and bias-corrected and accelerated confidence intervals. The measurement model satisfies convergent validity, construct reliability, and discriminant validity. The results show that transformational leadership and local wisdom both have a positive and significant effect on consumer satisfaction, that consumer satisfaction has the strongest effect on MSME performance, and that local wisdom also affects performance directly. The direct effect of transformational leadership on MSME performance is not significant, so its contribution runs entirely through consumer satisfaction (indirect-only mediation), whereas local wisdom shows complementary partial mediation. The findings position consumer satisfaction as the central transmission mechanism through which internal leadership capability and culturally embedded resources are converted into MSME performance.

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