Polytechnic University of Valencia Congress, CARMA 2016 - 1st International Conference on Advanced Research Methods and Analytics

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Entrepreneurial Orientation and Firm Performance in the Context of Upper Echelon Theory
Nazha Gali

Last modified: 20-11-2017


Entrepreneurial Orientation (EO) is a firm-level phenomenon, which involves the firm’s prospects to take risks, be proactive, and be innovati ve. Most of the research assumes a positive EO-performance relationship adopting the EO-as-advantage perspective without providing enoug h theoretical foundations of the way EO enhances performance. This pape r provides insights into the EO and firm performance relationship looking i nto the EO-as-experimentation perspective. Through EO-as-experimentati on perspective, we argue for the importance of looking into the differenti al effects of each of the EO dimensions on firm performance in active an d inactive firms. We hypothesized that the effect of each of the proactiveness and innovativeness dimension of EO on firm performance is positive among active firms and negative among inactive firms. Whereas risk taking dimension of EO is negative among active and inactive firms. Based on the results of firm fixed effect regression some empirical support for the hypotheses is presented and discussed.

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