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Exploring EO strategic performance measures: value-added versus efficiency outcomes

Robert Newbery (Department of Entrepreneurship, Innovation and Strategy, Northumbria University, Newcastle upon Tyne, UK)
Stephen Roderick (Rural Business School, Duchy College Stoke Climsland, Camborne, UK)
Johannes Sauer (Technical University of Munich, Munich, Germany)
Matthew Gorton (National Innovation Centre for Rural Enterprise, Business School, Newcastle University, Newcastle upon Tyne, UK)
Keith Robbins (Rural Business School, Duchy College Stoke Climsland, Camborne, UK)

International Journal of Entrepreneurial Behavior & Research

ISSN: 1355-2554

Article publication date: 21 April 2023

Issue publication date: 4 May 2023

252

Abstract

Purpose

Research on entrepreneurial orientation (EO) seeks to understand the EO–performance relationship. However, at a strategic level, performance relates to a competitive advantage and comprises both value-added and efficiency measures. Following arguments that performance is context and strategy dependent, the paper argues that EO research needs to clarify and specify the type of performance relationship measured.

Design/methodology/approach

To explore the EO–performance relationship, the research considers the agricultural sector where policy has traditionally encouraged the maximisation of efficiency in production and has only recently promoted entrepreneurship, providing fertile ground to explore different approaches to measuring performance. A survey collected detailed accounting records and context specific EO for 282 commercial farms. The authors estimate two models (Heckman selection regression and stochastic production frontier) that examine the relationships between EO and value-added/efficiency performance outcomes.

Findings

The analysis confirms the EO–value-added performance relationship, with significant positive relationships for the EO components proactiveness and innovativeness and a negative relationship for risk. No EO–efficiency performance relationship was found, despite a robust analysis of technical efficiency using detailed accounting data.

Originality/value

The paper contributes to EO theory by problematizing performance and highlighting the importance of the type of performance measured. This paper contributes empirically with findings relating to a mature industry contributes to entrepreneurship methodology by outlining how EO–performance relationships can be measured in terms of productivity and technical efficiency.

Keywords

Acknowledgements

The authors would like to thank the data collection and processing team at Duchy College, and the farmers, horticulturalists and other rural businesses who provide the confidential data for the Farm Business Survey.

Citation

Newbery, R., Roderick, S., Sauer, J., Gorton, M. and Robbins, K. (2023), "Exploring EO strategic performance measures: value-added versus efficiency outcomes", International Journal of Entrepreneurial Behavior & Research, Vol. 29 No. 4, pp. 1027-1049. https://doi.org/10.1108/IJEBR-01-2022-0022

Publisher

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Emerald Publishing Limited

Copyright © 2023, Emerald Publishing Limited

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