Do entrepreneurial orientation and size of enterprise influence the performance of micro and small enterprises? A study on mediating role of innovation

Abstract

This paper identifies the mediating role of innovation and moderating role of size of enterprise on the relationship between entrepreneurial orientation and performance of Micro and Small Enterprises (MSEs). For the purpose of this study, the necessary data is collected from 384 MSE's operating in Punjab province, Pakistan. Initially the data are analyzed using SPSS 22 and then, for the development of structure equation modeling, Smart PLS-3 is used. Two aspects of entrepreneurial orientations; namely risk taking and pro-activeness are analyzed and innovation is considered as mediating variable. The major contribution of the study is to identify any moderating effect of size of the enterprise on the relationship between entrepreneurial orientation, innovation and performance of MSEs. These elements basically show the contribution that is made by the innovation and performance of the MSE's. The results reveal that the size of enterprises moderated the relationship between risk taking and performance, pro-activeness and performance as well as innovation and performance.