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This research explores the influence of entrepreneurial orientation (EO) on SMEs located at core and peripheral regions, by focusing on a single dimension of EO: proactiveness. We conducted a quantitative study of 626 Israeli SMEs. Business growth, as measured by the rate of change in number of employees, was found to be significantly higher in the core region. As expected, proactiveness was found to strongly affect SME growth as well as firm expansion to international markets. Our analysis shows that the difference in business growth between regions can be attributed also to a lower level of ownersʼ proactiveness in peripheral regions since it was found to mediate the effect of peripheral location on firm growth. Differences in proactiveness levels may be explained by the historical development of peripheral regions. Our results have useful implications for policies that aim to promote growth and development in peripheral regions.

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This study explores differentiating factors in employment growth between young small and medium-sized enterprises in rural regions and their application in developing economies. We applied a mixed-method approach, including a survey of 155 new ventures in Israel, an economy whose rural regions exhibit similarities to those of less developed countries, and 10 in-depth interviews with academics and practitioners. The results suggest that the economic development of rural areas through the cultivation of entrepreneurship should be carried out by providing potential business owners with two resources that are scarcer in these areas: funding and knowledge.