Small agricultural businesses' performance—What is the role of dynamic capabilities, entrepreneurial orientation, and environmental sustainability commitment?

Abstract

The role that the resources and capabilities of agricultural entrepreneurs play on both environmental performance (EP) and financial performance (FP) is still unclear. This study analyzes how small farms enhance EP and FP in an inland Portuguese region through the relationship between dynamic capabilities (DCs), entrepreneurial orientation (EO), and environmental sustainability commitment (ESC). Based on a sample of 160 fresh fruit farms and applying a partial least squares structural equation modeling (PLS-SEM), our study concludes that EO and ESC influence EP and FP positively.Hence, farms can achieve competitive advantage through mitigating their profound impacts on the environment as proposed by the natural resource-based view (NRBV).Farms are also improving DCs, but farmers respond to the higher environmental requirements of agricultural markets primarily through research and development (R&D) capabilities and not through marketing capabilities. Having as theoretical supports the NRBV and the DCs, our study contributes to a better understanding of the mechanisms through which entrepreneurs enhance EP and FP in sectors with high environmental impacts such as agriculture. The findings suggest that entrepreneurship training projects may enable farmers to approach food security as a market opportunity and not only as rules they must follow.

The role of innovative work behaviour and knowledge-based dynamic capabilities in increasing the innovative performance of agricultural enterprises

“…EO itself has a direct influence on the IP of companies. This effect, although statistically significant, is not high (β = 0.149), which is consistent with the findings of other studies on the positive but low correlations between the two variables (Dias et al 2021). By confirming this finding in different conditions, we verified its validity.…”

“…At the same time, EO can enable farmers to approach many of the challenges they face not only as rules (e.g. in the case of food safety) but also as market opportunities (Dias et al 2021). H 1 : We assume that the EO of agrarian managers is positively related to the IP of agrarian enterprises.…”

Sustaining superior international performance: Strategic orientations and dynamic capability of environmentally concerned small‐ and medium‐sized enterprises

“…The notion of EO is reflected in the tendency of a firm's to pursue activities including innovation (ability to introduce new products/services and modify existing ones), risk‐taking (propensity of a firm to commit resources to activities with unknown outcomes), and proactiveness (introducing products and services ahead of competitors) (Lumpkin & Dess, 1996; Miller, 1983). As such, EO becomes a conduit for the sustained competitive advantage of an SME in particular because innovative behavior allows it to introduce new products/services and develop new capabilities ahead of competitors (Dias et al, 2021; Solano Acosta et al, 2018). Furthermore, proactive and risk‐taking behaviors enable an SME to pursue promising opportunities and enjoy first‐mover advantage in markets (Silva et al, 2021; Thanos et al, 2016).…”

Critical Success Factors for Supply Chain Sustainability in the Wood Industry: An Integrated PCA-ISM Model

“…The concept of a sustainable supply chain is viewed as a measure that pertains to profit and loss-but also broader social and environmental concerns [4,5]. In other words, sustainability centres around reducing a business's harmful impacts on people, society, and the environment while still enhancing value for customers, business partners, and stakeholders [6]. Aside from meeting social and environmental expectations, sustainability reduces cost and reputational risk, boosts revenue, and ensures long-term success [7].…”