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Entrepreneurial orientation and firm performance in SMEs: the mediating role of entrepreneurial competencies and moderating role of environmental dynamism

Junaid Aftab (Department of Economics and Management, University of Brescia, Brescia, Italy)
Monica Veneziani (Department of Economics and Management, University of Brescia, Brescia, Italy)
Huma Sarwar (Department of Economics and Management, University of Brescia, Brescia, Italy)
Muhammad Ishtiaq Ishaq (Quaid-i-Azam University Islamabad, Islamabad, Pakistan)

International Journal of Emerging Markets

ISSN: 1746-8809

Article publication date: 28 December 2022

89

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. (2022), "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. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJOEM-07-2021-1151

Publisher

:

Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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