The Sustainability of the Entrepreneurial Orientation—Performance Relationship

TLDR

Entrepreneurial orientation is a widely studied strategic construct that has been shown to influence firm performance. This study investigates whether the EO–performance link endures over time or merely provides a temporary boost. In Swedish small firms, EO positively affects performance, with the effect strengthening over time, indicating long‑term benefits for firms that invest in EO.

Abstract

Entrepreneurial orientation (EO) has become an important and extensively researched topic in the literature. Empirical results suggest that EO may influence firm performance. However, it is important to determine whether the EO-performance relationship is sustainable since EO can be a resource-consuming strategic orientation. This research examines the sustainability of the EO-performance relationship; i.e., whether EO affects performance during an extended period of time or is a “quick fix” where performance is only temporarily affected. Using data from Swedish small firms, the results indicate that there is indeed a positive relationship between EO and performance. This relationship also increases over time. The results show that investments in EO may be worthwhile for small firms since they pay off over an extended period of time.