IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v140y2012i2p614-621.html
   My bibliography  Save this article

Entrepreneurial orientation: Growth and profitability of Finnish small- and medium-sized enterprises

Author

Listed:
  • Soininen, Juha
  • Martikainen, Minna
  • Puumalainen, Kaisu
  • Kyläheiko, Kalevi

Abstract

Our paper investigates, whether there exist intrinsic strategic characteristics, which enables some firms to tolerate economic difficulties stronger than their companions. Tolerance as such also indicates if SMEs as investments are providing return accordingly to their risk level. In our view, the differences in entrepreneurial orientation could be a decisive explainer behind this phenomenon. This paper contributes to previous literature by investigating, how the firm's internal strategic behavior is able to improve the firm performance, and also by showing that SMEs are providing the compensation of risk to investors. Our results indicate that entrepreneurial orientation affects directly firm's growth rate.

Suggested Citation

  • Soininen, Juha & Martikainen, Minna & Puumalainen, Kaisu & Kyläheiko, Kalevi, 2012. "Entrepreneurial orientation: Growth and profitability of Finnish small- and medium-sized enterprises," International Journal of Production Economics, Elsevier, vol. 140(2), pages 614-621.
    • Handle: RePEc:eee:proeco:v:140:y:2012:i:2:p:614-621
    DOI: 10.1016/j.ijpe.2011.05.029
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527311002623
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijpe.2011.05.029?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Andreas Rauch & Johan Wiklund & G.T. Lumpkin & Michael Frese, 2009. "Entrepreneurial Orientation and Business Performance: An Assessment of past Research and Suggestions for the Future," Entrepreneurship Theory and Practice, , vol. 33(3), pages 761-787, May.
    2. Covin, Jeffrey G. & Slevin, Dennis P., 1990. "New venture strategic posture, structure, and performance: An industry life cycle analysis," Journal of Business Venturing, Elsevier, vol. 5(2), pages 123-135, March.
    3. Jeffrey G. Covin & Kimberly M. Green & Dennis P. Slevin, 2006. "Strategic Process Effects on the Entrepreneurial Orientation–Sales Growth Rate Relationship," Entrepreneurship Theory and Practice, , vol. 30(1), pages 57-81, January.
    4. Einar Lier Madsen, 2007. "The significance of sustained entrepreneurial orientation on performance of firms -- A longitudinal analysis," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 19(2), pages 185-204, March.
    5. Keh, Hean Tat & Nguyen, Thi Tuyet Mai & Ng, Hwei Ping, 2007. "The effects of entrepreneurial orientation and marketing information on the performance of SMEs," Journal of Business Venturing, Elsevier, vol. 22(4), pages 592-611, July.
    6. Danny Miller, 1983. "The Correlates of Entrepreneurship in Three Types of Firms," Management Science, INFORMS, vol. 29(7), pages 770-791, July.
    7. David J. Teece, 2007. "Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance," Strategic Management Journal, Wiley Blackwell, vol. 28(13), pages 1319-1350, December.
    8. Leon, Angel & Nave, Juan M. & Rubio, Gonzalo, 2007. "The relationship between risk and expected return in Europe," Journal of Banking & Finance, Elsevier, vol. 31(2), pages 495-512, February.
    9. Bhuian, Shahid N. & Menguc, Bulent & Bell, Simon J., 2005. "Just entrepreneurial enough: the moderating effect of entrepreneurship on the relationship between market orientation and performance," Journal of Business Research, Elsevier, vol. 58(1), pages 9-17, January.
    10. Ana M. Moreno & José C. Casillas, 2008. "Entrepreneurial Orientation and Growth of SMEs: A Causal Model," Entrepreneurship Theory and Practice, , vol. 32(3), pages 507-528, May.
    11. Nickel, Manuel Núñez & Rodriguez, Manuel Cano, 2002. "A review of research on the negative accounting relationship between risk and return: Bowman's paradox," Omega, Elsevier, vol. 30(1), pages 1-18, February.
    12. Armstrong, J. Scott & Overton, Terry S., 1977. "Estimating Nonresponse Bias in Mail Surveys," MPRA Paper 81694, University Library of Munich, Germany.
    13. Avlonitis, George J. & Salavou, Helen E., 2007. "Entrepreneurial orientation of SMEs, product innovativeness, and performance," Journal of Business Research, Elsevier, vol. 60(5), pages 566-575, May.
    14. William F. Sharpe, 1964. "Capital Asset Prices: A Theory Of Market Equilibrium Under Conditions Of Risk," Journal of Finance, American Finance Association, vol. 19(3), pages 425-442, September.
    15. Ari Jantunen & Kaisu Puumalainen & Sami Saarenketo & Kalevi Kyläheiko, 2005. "Entrepreneurial Orientation, Dynamic Capabilities and International Performance," Journal of International Entrepreneurship, Springer, vol. 3(3), pages 223-243, September.
    16. Jeffrey G. Covin & Dennis P. Slevin, 1989. "Strategic management of small firms in hostile and benign environments," Strategic Management Journal, Wiley Blackwell, vol. 10(1), pages 75-87, January.
    17. Dimitratos, Pavlos & Lioukas, Spyros & Carter, Sara, 2004. "The relationship between entrepreneurship and international performance: the importance of domestic environment," International Business Review, Elsevier, vol. 13(1), pages 19-41, February.
    18. Zahra, Shaker A. & Covin, Jeffrey G., 1995. "Contextual influences on the corporate entrepreneurship-performance relationship: A longitudinal analysis," Journal of Business Venturing, Elsevier, vol. 10(1), pages 43-58, January.
    19. Karpak, Birsen & Topcu, Ilker, 2010. "Small medium manufacturing enterprises in Turkey: An analytic network process framework for prioritizing factors affecting success," International Journal of Production Economics, Elsevier, vol. 125(1), pages 60-70, May.
    20. Fama, Eugene F & MacBeth, James D, 1973. "Risk, Return, and Equilibrium: Empirical Tests," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 607-636, May-June.
    21. Wiklund, Johan & Shepherd, Dean, 2005. "Entrepreneurial orientation and small business performance: a configurational approach," Journal of Business Venturing, Elsevier, vol. 20(1), pages 71-91, January.
    22. Catherine L. Wang, 2008. "Entrepreneurial Orientation, Learning Orientation, and Firm Performance," Entrepreneurship Theory and Practice, , vol. 32(4), pages 635-657, July.
    23. Bullinger, Hans-Jorg, 1999. "Turbulent times require creative thinking: New European concepts in production management," International Journal of Production Economics, Elsevier, vol. 60(1), pages 9-27, April.
    24. M. Carree & A. Thurik, 1998. "Small firms and economic growth in europe," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 26(2), pages 137-146, June.
    25. Bruce H. Kemelgor, 2002. "A comparative analysis of corporate entrepreneurial orientation between selected firms in the Netherlands and the USA," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 14(1), pages 67-87, January.
    26. Gerard George & D. Robley Wood & Raihan Khan, 2001. "Networking strategy of boards: implications for small and medium-sized enterprises," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 13(3), pages 269-285, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bradley A. George & Louis Marino, 2011. "The Epistemology of Entrepreneurial Orientation: Conceptual Formation, Modeling, and Operationalization," Entrepreneurship Theory and Practice, , vol. 35(5), pages 989-1024, September.
    2. Jörg Freiling & Christoph Lütke Schelhowe, 2014. "The Impact of Entrepreneurial Orientation on the Performance and Speed of Internationalization," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 10(4), pages 169-199.
    3. García-Villaverde, Pedro M. & Ruiz-Ortega, María J. & Ignacio Canales, J., 2013. "Entrepreneurial orientation and the threat of imitation: The influence of upstream and downstream capabilities," European Management Journal, Elsevier, vol. 31(3), pages 263-277.
    4. Samuel Adomako, 2018. "The Moderating Effects Of Adaptive And Intellectual Resource Capabilities On The Relationship Between Entrepreneurial Orientation And Financial Performance," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 22(03), pages 1-35, April.
    5. D’Angelo, Alfredo & Presutti, Manuela, 2019. "SMEs international growth: The moderating role of experience on entrepreneurial and learning orientations," International Business Review, Elsevier, vol. 28(3), pages 613-624.
    6. Engelen, Andreas & Kube, Harald & Schmidt, Susanne & Flatten, Tessa Christina, 2014. "Entrepreneurial orientation in turbulent environments: The moderating role of absorptive capacity," Research Policy, Elsevier, vol. 43(8), pages 1353-1369.
    7. Antonio Rodríguez-Peña, 2023. "Corporate entrepreneurship and firm performance relationship under the moderating effect of environmental dynamism: Replication and extension analysis," Journal of International Entrepreneurship, Springer, vol. 21(4), pages 550-585, December.
    8. Farhad Uddin Ahmed & Louis Brennan, 2019. "Performance determinants of early internationalizing firms: The role of international entrepreneurial orientation," Journal of International Entrepreneurship, Springer, vol. 17(3), pages 389-424, September.
    9. Jiang, Xu & Liu, Heng & Fey, Carl & Jiang, Feifei, 2018. "Entrepreneurial orientation, network resource acquisition, and firm performance: A network approach," Journal of Business Research, Elsevier, vol. 87(C), pages 46-57.
    10. Nida Nazar & Sara Ravan Ramzani & Temoor Anjum & Imran Ahmed Shahzad, 2018. "Impact of Entrepreneurial Orientation of Bank Performance in Pakistan," Business Management and Strategy, Macrothink Institute, vol. 9(1), pages 290-309, December.
    11. Elena Patricia Mojica-Carrillo & Gonzalo Maldonado-Guzmán & Sandra Yesenia Pinzón-Castro & Angie Lorena Riaño-Castillo, 2021. "Effects of Entrepreneurial Orientation on Performance and Growth: Are Microenterprises and Small Firms Equal?," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 11(4), pages 1-2.
    12. Katharina Fellnhofer, 2019. "The Complementary Effects Of Firms’ And Team Leaders’ Entrepreneurial Orientation On Innovation Success And Performance," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 23(05), pages 1-32, June.
    13. Andreas Rauch & Johan Wiklund & G.T. Lumpkin & Michael Frese, 2009. "Entrepreneurial Orientation and Business Performance: An Assessment of past Research and Suggestions for the Future," Entrepreneurship Theory and Practice, , vol. 33(3), pages 761-787, May.
    14. Agnes Asemokha & Jackson Musona & Lasse Torkkeli & Sami Saarenketo, 2019. "Business model innovation and entrepreneurial orientation relationships in SMEs: Implications for international performance," Journal of International Entrepreneurship, Springer, vol. 17(3), pages 425-453, September.
    15. Lim Euncheon & Kim Dohyeon, 2020. "Entrepreneurial Orientation and Performance in South Korea: The Mediating Roles of Dynamic Capabilities and Corporate Entrepreneurship," Entrepreneurship Research Journal, De Gruyter, vol. 10(3), pages 1-18, July.
    16. Vishal K. Gupta & William J. Wales, 2017. "Assessing Organisational Performance Within Entrepreneurial Orientation Research: Where Have We Been and Where Can We Go from Here?," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 26(1), pages 51-76, March.
    17. Leonidas A. Zampetakis & Melina Vekini & Vassilis Moustakis, 2009. "Entrepreneurial orientation, access to financial resources, and product performance in the Greek commercial TV industry," The Service Industries Journal, Taylor & Francis Journals, vol. 31(6), pages 897-910, April.
    18. Hwan Jin Kim, 2018. "Reconciling Entrepreneurial Orientation and Dynamic Capabilities: A Strategic Entrepreneurship Perspective," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 27(2), pages 180-208, September.
    19. Li Chen & Shaoming Zou & Hui Xu & Yiwen Chen, 2020. "Entrepreneurial Orientation in Multinational Corporations: Antecedents and Effects," Management International Review, Springer, vol. 60(1), pages 123-148, February.
    20. Morgan, Todd & Anokhin, Sergey Alexander, 2020. "The joint impact of entrepreneurial orientation and market orientation in new product development: Studying firm and environmental contingencies," Journal of Business Research, Elsevier, vol. 113(C), pages 129-138.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:140:y:2012:i:2:p:614-621. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.