Entrepreneurial orientation and firm performance in SMEs: the mediating role of entrepreneurial competencies and moderating role of environmental dynamism
International Journal of Emerging Markets
ISSN: 1746-8809
Article publication date: 28 December 2022
Issue publication date: 28 October 2024
Abstract
Purpose
Entrepreneurial orientation is among the vital factors that contribute to performance, especially for small and medium-sized enterprises (SMEs). However, the empirical studies provide mixed results and call for new studies to examine this relationship. Therefore, this study aims to determine the entrepreneurial orientation's (EO) direct and indirect impact (via entrepreneurial competencies) on firm performance. Additionally, the moderating role of environmental dynamism is also tested in entrepreneurial competencies and firm performance relationships.
Design/methodology/approach
The data (N = 332) were collected from managerial rank employees, using a self-administered questionnaire, working in different SMEs in Pakistan. In addition, structural equation modeling (SEM) was executed using SmartPLS 3.2.
Findings
The study's results demonstrate that EO positively influences entrepreneurial competencies and firm performance, and entrepreneurial competencies also mediate the relationship between EO and performance. Additionally, environmental dynamism strengthens the positive relationship between entrepreneurial competencies and performance.
Originality/value
This study identifies that entrepreneurial competency is the missing link between EO and firm performance, due to which the relationship between them is indecisive. This study also contributes to the contingency perspective by explaining the role of environmental dynamism as a boundary condition in strengthening the relationship between entrepreneurial competencies and SMEs' performance in an emerging economy.
Keywords
Acknowledgements
The authors want to thank the editor-in-chief and anonymous reviewers for the valuable feedback. This helped us to improve the authors' research work.
Citation
Aftab, J., Veneziani, M., Sarwar, H. and Ishaq, M.I. (2024), "Entrepreneurial orientation and firm performance in SMEs: the mediating role of entrepreneurial competencies and moderating role of environmental dynamism", International Journal of Emerging Markets, Vol. 19 No. 10, pp. 3329-3352. https://doi.org/10.1108/IJOEM-07-2021-1151
Publisher
:Emerald Publishing Limited
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