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Effects of formal institutions on the performance of the tourism sector in the Philippines: The mediating role of entrepreneurial orientation

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  • Roxas, Banjo
  • Chadee, Doren

Abstract

Although formal institutions and entrepreneurial orientation have both been found to contribute separately and positively to firm performance, the interplay between the two factors has not received much attention. This study draws from institutional theory and the entrepreneurship literature to argue that entrepreneurial orientation (EO) provides the mechanism through which the formal institutional environment influences the performance of firms in the tourism sector. Using structural equation modelling and data from a large-scale survey of firms in the tourism sector in the Philippines, it is shown that elements of the institutional environment, by themselves, only have limited influence on tourism firms' performance. EO is shown to partially enhance the effects of the institutional environment on firm performance. The strong mediating effect of entrepreneurial orientation on the relationship between the institutional environment and firm performance is a novel finding and highlights the important role of the government in ensuring that the formal institutional environment promotes entrepreneurship which, in turn, enhances the performance of the tourism sector.

Suggested Citation

  • Roxas, Banjo & Chadee, Doren, 2013. "Effects of formal institutions on the performance of the tourism sector in the Philippines: The mediating role of entrepreneurial orientation," Tourism Management, Elsevier, vol. 37(C), pages 1-12.
  • Handle: RePEc:eee:touman:v:37:y:2013:i:c:p:1-12
    DOI: 10.1016/j.tourman.2012.10.016
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    File URL: http://www.sciencedirect.com/science/article/pii/S0261517712001963
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    References listed on IDEAS

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    Cited by:

    1. Hingtgen, Nathan & Kline, Carol & Fernandes, Luci & McGehee, Nancy Gard, 2015. "Cuba in transition: Tourism industry perceptions of entrepreneurial change," Tourism Management, Elsevier, vol. 50(C), pages 184-193.
    2. Cajaiba-Santana, Giovany & Faury, Olivier & Ramadan, Maarouf, 2020. "The emerging cruise shipping industry in the arctic: Institutional pressures and institutional voids," Annals of Tourism Research, Elsevier, vol. 80(C).
    3. Joonhyeong Joseph Kim & Insin Kim, 2018. "Entrepreneurial Marketing and Airline-Cause Sponsorship Congruence: Passenger Sponsorship Response to US-Based Full-Service Airlines," Sustainability, MDPI, Open Access Journal, vol. 10(7), pages 1-20, July.
    4. Lavandoski, Joice & Albino Silva, João & Vargas-Sánchez, Alfonso, 2014. "Institutional Theory In Tourism Studies: Evidence And Future Directions," Spatial and Organizational Dynamics Discussion Papers 2014-3, CIEO-Research Centre for Spatial and Organizational Dynamics, University of Algarve.
    5. Huanmei Li & Graciela Zubielqui & Allan O’Connor, 2015. "Entrepreneurial networking capacity of cluster firms: a social network perspective on how shared resources enhance firm performance," Small Business Economics, Springer, vol. 45(3), pages 523-541, October.
    6. Felipe Hernández-Perlines & Manuel Alejandro Ibarra Cisneros, 2017. "Analysis of the moderating effect of entrepreneurial orientation on the influence of social responsibility on the performance of Mexican family companies," Cogent Business & Management, Taylor & Francis Journals, vol. 4(1), pages 1408209-140, January.
    7. Buckley, R.C. & Guitart, D. & Shakeela, A., 2017. "Contested surf tourism resources in the Maldives," Annals of Tourism Research, Elsevier, vol. 64(C), pages 185-199.
    8. Altinay, Levent & Sigala, Marianna & Waligo, Victoria, 2016. "Social value creation through tourism enterprise," Tourism Management, Elsevier, vol. 54(C), pages 404-417.
    9. Darma Mahadea & Martin Kabange, 2019. "Influence Of Government Regulations And Institutions On Entrepreneurial Performance In Cameroon," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 24(04), pages 1-17, December.
    10. Felipe Hernández-Perlines & Nina Rung-Hoch, 2017. "Sustainable Entrepreneurial Orientation in Family Firms," Sustainability, MDPI, Open Access Journal, vol. 9(7), pages 1-16, July.
    11. Héctor Cuevas-Vargas & Neftalí Parga-Montoya & Rudy Fernández-Escobedo, 2019. "Effects of Entrepreneurial Orientation on Business Performance: The Mediating Role of Customer Satisfaction—A Formative–Reflective Model Analysis," SAGE Open, , vol. 9(2), pages 21582440198, June.
    12. Mehmet Altin & Esra Memili & Sevil Sönmez, 2017. "Institutional economics and firm creation in the hospitality and tourism industry," Tourism Economics, , vol. 23(7), pages 1381-1397, November.
    13. Hundera, Mulu, 2019. "Role conflict, coping strategies and female entrepreneurial success in sub-Saharan Africa," Other publications TiSEM 3e263b0c-3bf3-474a-8a20-b, Tilburg University, School of Economics and Management.
    14. Sainaghi, Ruggero & Phillips, Paul & Zavarrone, Emma, 2017. "Performance measurement in tourism firms: A content analytical meta-approach," Tourism Management, Elsevier, vol. 59(C), pages 36-56.

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