This study examines the determinants of startup performance and innovation within Nepalese tourism Small and Medium-sized Enterprises (SMEs), a sector central to national economic development yet operating in a resource-constrained, emerging marke...
This study examines the determinants of startup performance and innovation within Nepalese tourism Small and Medium-sized Enterprises (SMEs), a sector central to national economic development yet operating in a resource-constrained, emerging market environment. Grounded in the Resource-Based View (RBV) and Strategic Fit Theory, the research develops and empirically tests an integrated model assessing the direct effects of entrepreneurial orientation (EO), network orientation (NO), and entrepreneurial leadership (EL) on startup performance (SP). The model further incorporates technological innovation capabilities (TIC) as a mediating mechanism and strategic flexibility (SF) as a moderating variable. A quantitative, cross-sectional methodology was employed using a structured questionnaire administered to 313 owners and managers of tourism SMEs across Nepal. Data were analysed using SPSS 29.0 and the PROCESS macro to test both mediation and moderation effects. The measurement model demonstrated satisfactory reliability, convergent validity, and discriminant validity. The empirical results show that EO exerts a significant positive direct effect on SP, supporting H1a. However, contrary to expectations, NO (H1b) and EL (H1c) do not exhibit significant direct effects on SP. TIC was found to have a strong direct impact on SP (H2). Moreover, EO, NO, and EL each have significant positive effects on TIC, supporting H3a, H3b, and H3c. Mediation analysis confirmed that TIC partially mediates the relationships between EO and SP (H4a), between NO and SP (H4b), and between EL and SP (H4c). This indicates that while EO contributes directly to performance, the influence of NO and EL on SP operates indirectly through technological innovation capabilities. In terms of moderation, SF significantly strengthens the effect of EL on SP (H5c) and the relationship between TIC and SP (H6), but it does not moderate the EO-SP (H5a) or NO-SP (H5b) relationships. Overall, the study concludes that within Nepal's fragmented and resource-scarce tourism sector, an entrepreneurial mindset is essential for achieving direct performance gains. However, the performance effects of networking and leadership become substantial only when these capabilities are channelled toward building strong technological innovation capabilities. Theoretically, these capabilities are linked to the adoption of sustainable practices such as green technologies and energy-saving methods, though empirical testing of sustainability outcomes remains a direction for future research. Strategic flexibility emerges as a critical catalyst, amplifying the impact of leadership and existing innovation capacities on performance outcomes. The study contributes theoretically by clarifying the mediating role of TIC and contextualizing the nuanced effects of NO and EL in emerging economy settings. Practically, the findings offer actionable insights for entrepreneurs aiming to strengthen innovation and adaptability, and for policymakers seeking to design supportive ecosystems that foster entrepreneurial development, technological progress, and resilience in the Nepalese tourism industry.