Knowledge source preferences as determinants of strategic entrepreneurial orientation

Abstract

In the knowledge intensive context, firms’ capacity to integrate external and internal sources of knowledge becomes an important competitive advantage and may distinguish entrepreneurial from conservative firms. This paper explores the proposition that differences in strategic entrepreneurial orientation (EO) across firms may be significantly determined by differences in firms’ preferences regarding knowledge sources. Our research is based on 208 firms operating in knowledge intensive industries in six Central and East European countries (CEEC). We identified three types of firms in terms of patterns of sources of knowledge: external R&D knowledge based firms, in-house knowledge based firms and value chain dependent firms. By using different proxies or different dimensions of EO, we have found that the EO is strongest in firms based on external knowledge. Firms with inhouse based knowledge have an intermediate strength of the EO, and firms dependent on value chains are the least entrepreneurially oriented. We have also found moderate support for grouping different proxies of EO into three dimensions identified in literature – innovativeness, pro-activeness and risk-taking. Value chain firms are not pro-active, have the lowest innovativeness, and are the most risk averse. External knowledge based firms are the most active in all three dimensions of EO, while inhouse knowledge based firms are in an intermediate position. Our results point to strong systemic features of entrepreneurial activities; i.e., EO is inherently different in different sub-populations of firms depending on their patterns of sources of knowledge. It seems that these patterns operate as a moderating factor between performance and the EO, which explains mixed results from the literature