Moderating Effect of Environmental Dynamism on the Relationship between a Firm’s Entrepreneurial Orientation and Financial Performance

Kayhan Tajeddini 1  and Stephen Mueller 2
  • 1 Sheffield Hallam University, Sheffield Business School, City Campus, Sheffield, United Kingdom of Great Britain and Northern Ireland
  • 2 Department of Management, Springfield, USA
Kayhan Tajeddini
  • Corresponding author
  • Sheffield Hallam University, Sheffield Business School, Service Sector Management, City Campus, Sheffield, United Kingdom of Great Britain and Northern Ireland
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and Stephen Mueller

Abstract

The relationship between entrepreneurial orientation and firm performance has been the focus of numerous empirical studies over the past decade. The conclusions and findings reported are diverse and often conflicting. One possible explanation for mixed findings is that past studies do not take into account the dynamic nature of the industry environment. Using a sample of 192 Swiss firms from several different industries, this study examines the direct effect of entrepreneurial orientation on financial firm performance along with the moderating effect of a dynamic environment on the relationship between entrepreneurial orientation and performance. Results of this study suggest that for firms competing in a highly dynamic environment, the positive effect of an entrepreneurial orientation on financial performance is enhanced.

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