Entrepreneurial behaviour, firm size and financial performance: the case of rural tourism family firms

Abstract

Family firms dominate the rural tourism industry, and within these firms family related interests guide entrepreneurial behaviour. This study utilises the entrepreneurial orientation (EO)-performance relationship to investigate which kind of entrepreneurial behaviour is important in order for rural tourism family firms to perform well. Considering the moderating effect of firm size, findings based on a sample of 198 firms and 4 follow-up interviews with owner-managers show that Innovativeness and Proactiveness are relevant variables to explain performance, while Risk-Taking is not. In addition, the Proactiveness-performance effect was negatively impacted by micro firm size. Initiatives to foster firm collaboration to overcome the disadvantage of small firm size and to stimulate entrepreneurship and innovation are suggested.