Management Letters/Cuadernos de Gestión (May 2013)

Entrepreneurial orientation, environmental hostility and SME profitability: a contingency approach

  • Izaias Martins,
  • Alex Rialp

DOI
https://doi.org/10.5295/cdg.110297iz
Journal volume & issue
Vol. 13, no. 2
pp. 67 – 88

Abstract

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This study investigates the effect of the entrepreneurial orientation (EO) on SME financial performance. The essay also proposes a contingency model to explore the moderating effects of environmental hostility on the relationship between EO and profitability. The study was conducted using a sample of 121 manufacturing SMEs in Spain. Results confirm the positive influence of EO on a firm’s profitability. More importantly, the impact of EO on SME profitability is higher when there is a fit between EO and the external environment.

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