Abstract

Purpose: This study investigates how entrepreneurial leadership mobilises employee innovative behaviour to enhance distribution efficiency in Vietnamese small and medium enterprises (SMEs), with particular emphasis on logistics optimisation and supply chain management improvements. The research examines psychological and organisational mechanisms through which leadership drives distribution-specific innovations whilst introducing family background as a social capital moderator reflecting Vietnam's relationship-intensive commercial networks. Research design, data and methodology: Cross-sectional survey data were collected from 978 employees across 89 Vietnamese SMEs operating in distribution-intensive sectors. Structural equation modelling via Smart PLS 4.1 tested hypothesised relationships, incorporating rigorous common method bias assessments and multi-group analysis examining demographic and organisational variations. Results: Entrepreneurial leadership demonstrated substantial direct effects on employee innovative behaviour and significant indirect effects through all hypothesised mediators. Family background significantly moderated the leadership-innovation relationship, with bias-corrected bootstrap confidence intervals confirming mediation robustness. Multi-group analysis revealed stronger effects among female employees and non-financial enterprises. Conclusions: Findings advance distribution science by demonstrating how social capital amplifies leadership effectiveness in fostering employee-generated solutions for logistics inefficiencies and supply chain constraints. The study provides evidence that human capital optimisation through entrepreneurial leadership represents a viable pathway for resource-constrained SMEs to achieve competitive advantage in relationship-intensive distribution networks.