The impact of entrepreneurial orientation on SMEs’ performance in Nigeria: the moderating role played by entrepreneurial ecosystems

Abstract

Scholars often agree with the fact that SMEs have a significant effect on nations’ overall Gross Domestic Product (GDP). However, the process to establish SME performance had been widely debated. Hence, scholars had devoted much effort to identifying the distinctive ability of individual entrepreneurs, understanding the market, and responding strategically to the unprecedented market forces. Given this, entrepreneurial orientation (EO) has become an essential means of strategic decision making among firms, especially small and medium enterprises (SMEs'). Theoretical evidence from previous studies showed a lack of consensus among researchers on the influence of EO on SMEs’ performance. Therefore, this study investigates the influence of EO on the performance of SMEs in Nigeria through the moderating role of the entrepreneurial ecosystem (EE). The study employed a mixed research method to collect primary data from the selected SMEs in Nigeria. A structured questionnaire was used in the quantitative research phase to collect data from 531 SMEs using a cross-sectional study design and stratified random sampling technique. Partial Least Square – Structural Equation Modelling (PLS-SEM) approach was applied to test the hypotheses. Findings from the quantitative analysis revealed that four of the EO dimensions significantly influence SMEs’ performance among the surveyed SMEs. In contrast, a significant relationship between competitive aggressiveness and SMEs’ performance could not be established in the study context. Also, ecosystem and entrepreneurial attributes were introduced as moderators and mediators. Furthermore, the researcher further employs a qualitative research method to confirm the empirical findings. In this regard, the result reveals several competing results on the relationship between EO dimensions and SMEs’ performance. The implications and contributions of the observed results were fully discussed