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Small Business Economics

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01-02-2013

Disaggregating entrepreneurial orientation: the non-linear impact of innovativeness, proactiveness and risk-taking on SME performance

Authors: Patrick M. Kreiser, Louis D. Marino, Donald F. Kuratko, K. Mark Weaver

Published in: Small Business Economics | Issue 2/2013

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Abstract

Previous studies have generally established a positive relationship between aggregated measures of entrepreneurial orientation (EO) and firm performance. However, there are theoretical reasons suggesting that three dimensions of EO (innovativeness, proactiveness, and risk-taking) may possess differential relationships with performance in smaller firms. This study utilizes a sample consisting of 1,668 small-to-medium sized enterprises (SMEs) in nine countries across 13 different industries to provide a finer-grained analysis of the EO-performance relationship. Specifically, we theorize and test a non-monotonic influence of innovativeness, proactiveness, and risk-taking on SME performance. Innovativeness and proactiveness displayed predominantly positive U-shaped relationships with SME performance. Risk-taking, however, displayed a predominantly negative U-shaped relationship with SME performance. Further, individualism was found to positively moderate the relationships between innovativeness-performance and proactiveness-performance. Taken together, these results suggest that differential relationships exist between three dimensions of EO and SME performance, with important theoretical implications for future EO research.

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We recognize that EO has been conceptualized with additional dimensions (Lumpkin and Dess 1996). However, the earlier conceptualization using three underlying dimensions (innovativeness, proactiveness, and risk-taking) has been the most widely utilized framework of the EO construct in both the entrepreneurship and strategic management literature (Rauch et al. 2009). Thus, we focused our study on these three dimensions.

We also conducted a latent methods factor test and a one-factor test on the perceptual data employed in this study. The results of these tests are available from the authors upon request. Taken together, these various tests suggest that common method bias did not pose a significant threat to this research.

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Title: Disaggregating entrepreneurial orientation: the non-linear impact of innovativeness, proactiveness and risk-taking on SME performance
Authors: Patrick M. Kreiser
Louis D. Marino
Donald F. Kuratko
K. Mark Weaver
Publication date: 01-02-2013
Publisher: Springer US
Published in: Small Business Economics / Issue 2/2013
Print ISSN: 0921-898X
Electronic ISSN: 1573-0913
DOI: https://doi.org/10.1007/s11187-012-9460-x

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