Entrepreneurial orientation and the business performance of SMEs: a quantitative study from the Netherlands

Abstract

Entrepreneurial Orientation (EO) is often mentioned as an antecedent of growth, competitive advantage and superior performance, and prior empirical research has often shown a positive relationship between EO and performance appears to exist. However, an important question that remains unanswered is what effect EO might have on firm performance during periods of economic crisis, and the severe environmental turbulence that accompany such crises. This research is a first investigation towards the effects of EO on the performance of small and medium sized firms during the current global economic crisis. In this study we use the multidimensional model of EO and test a series of hypotheses pertaining to its performance effects using survey data gathered from 164 Dutch SMEs. The present research shows that proactive firm behavior positively contributes to SME performance during the economic crisis. We further show that innovative SMEs do perform better in turbulent environments, but those innovative SMEs should minimize the level of risk and should take action to avoid projects that are too risky.

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“…Chirico and Salvato 2016;De Massis et al 2015), and SME performance literature (e.g., Keh et al 2007;Kraus et al 2012b), to develop an understanding of how family SMEs can source, develop and ultimately benefit from innovation. Family firms are complex entities that show a peculiar entrepreneurial behavior, driven by their simultaneous family and business orientations (Zellweger et al 2012).…”

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