Entrepreneurial orientation, absorptive capacity and business performance in SMEs

Abstract

Purpose Firms must be constantly looking for markets and business opportunities and developing new products; to do so, they must find ways to increase their competitiveness, productivity so that it is noticed in their financial statements. The purpose of this paper is to establish the influence of entrepreneurial orientation (EO) in business performance (BP) of small and medium-sized enterprises of the manufacturing sector in Mexico. Likewise, it is intended to demonstrate how absorptive capacity (ACAP) allows moderating this important relation. Design/methodology/approach Analyzing important theoretical and empirical contributions as regards this topic, a survey was designed and applied to 165 manufacturing firms, and by means of partial least squares structural equation modeling resorting to SmartPLS, the research hypotheses were tried. Findings The obtained results indicate that indeed, EO positively influences BP; in like manner, ACAP has a moderating effect on this relation. Thereby, it can be established that the manufacturing sector carries out the right practices that aim at increasing entrepreneurial competitiveness. Research limitations/implications The main limitation of the paper is its regional scale, not national; however, the typology of the manufacturing sector in the country is very similar, as the analyzed subsectors are the most relevant at a national level. Moreover, the existence of international value chains is also found in the rest of the country, so these chains are not exclusive to the region. Another limitation is that even if the analysis focuses on the main manufacturing subsectors, it would have been interesting to analyze if the behavior is similar in other subsectors. Originality/value This paper contributes to broadening the studies on EO, ACAP and BP in a different context. Besides, it allows contrasting the results obtained in an eminently manufacturing country with other economies less dependent on this sector. It also contributes to broadening the multidimensional analysis of the manufacturing sector in Mexico, as the authors of the present paper have also performed studies over similar lines in the same sector.

Chinese-Style Innovation and Its International Repercussions in the New Economic Times

“…On the other hand, some researchers have conducted analyses of entrepreneurial orientation, proactiveness and risk-taking [28]. They carried out their study between January 2018 to June 2018 by using two methods Structural Equation Modelling (PLS-SEM) and Fuzzy Set Qualitative Comparative Analysis (fsQCA).…”

Does absorptive capacity moderate the relationship between entrepreneurial orientation and supply chain resilience?

“…AC takes advantage of essential resources inherent in the firm's relationships with supply chain partners and allows deploying those resources effectively to attain a sustainable competitive advantage (Gölgeci & Kuivalainen, 2020). Moreover, previous literature has confirmed that AC effectively moderates the relation between EO and other factors as performance (Engelen et al, 2014), technological innovation capabilities (Mohd Noor & Aljanabi, 2016), international performance of family firms (Hernandez-Perlines, 2018), innovation performance (Zhai et al, 2018), and business performance (Ibarra-Cisneros & Hernandez-Perlines, 2019). Therefore, the current study expands research in terms of how a firm's AC interacts with EO so as to improve SCR by arguing that AC plays a core role in boosting the effect of EO on SCR.…”

“…Entrepreneurial orientation (EO) is among the themes that have been studied widely in recent times due to its major influence on business performance (Al-Hakimi et al, 2020;Hernandez-Perlines, 2018;Ibarra-Cisneros & Hernandez-Perlines, 2019;Sarsah et al, 2020). Entrepreneurialoriented firms can respond to changes, disruptions, and environmental uncertainty by providing opportunities and allocating resources to invest for sustainment and expansion (Hisrich et al, 2016;Hitt et al, 2001).…”

Environmental Outcomes of Green Entrepreneurship Harmonization

“…This study revealed that GAC had a significantly positive effect on both GEO and SEP, especially when GIP served as a mediator. This implies that successful green entrepreneurs need to absorb and explore new opportunities that suit the increasing external environmental concerns [13,112]. The GIP, which reflects a combination of GAC [111] and GEO [113], is integral to achieve the noble objective that advances industry and economy without influencing ecological systems [13,72].…”