ARTICLE

THE INFLUENCE OF ENVIRONMENTAL FACTORS AND ACCESS TO FINANCIAL CAPITAL ON THE LINK BETWEEN ENTREPRENEURIAL ORIENTATION AND SMES PERFORMANCE A CASE FROM PAKISTAN

15 Pages : 146-153

http://dx.doi.org/10.31703/gssr.2020(V-I).15      10.31703/gssr.2020(V-I).15      Published : Mar 2020

The Influence of Environmental Factors and Access to Financial Capital on the Link Between Entrepreneurial Orientation and SMEs Performance: A Case from Pakistan

    This paper is an attempt to explore the buffering role of environmental factors and access to financial capital on entrepreneurial orientation (EO) and SMEs performance relationship in Pakistan. The population of the study consists of all the SMEs that are operated in KPK, Pakistan. We select the sample from the Peshawar division, which includes three districts i.e. Peshawar, Charssada and Nowshehra. The study used a multistage cluster sampling technique. Through this technique, the study finally selects the 254 organization from the selected population. The managerial levels employees of SMEs were the respondents of the study and the responses were gathered through a structure questionnaire. The study found a significant positive relationship between EO and firm SMEs performance. It is also found that the relationship between EO and SMEs performance is moderated by access to financial capital. Furthermore, EF did not affect the relationship.

    (1) Muhammad Fayaz
    IBMS,Agriculture University Peshawar,KP, Pakistan.
    (2) Shams Ur Rahman
    Assistant Professor, IBMS,Agriculture University Peshawar, KP, Pakistan.
    (3) Abdur Rauf
    Assistant Professor,Department of Economics,Abbotabad University, Haveleian, KP, Pakistan.
  • Antoncic, B., & Hisrich, R. D. (2004). Corporate entrepreneurship contingencies and organizational wealth creation. Journal of management development, 23(6), 518-550.
  • Ayuso, S., & Navarrete-Báez, F. E. (2018). How does entrepreneurial and international orientation influence SMEs' commitment to sustainable development? Empirical evidence from Spain and Mexico. Corporate Social Responsibility and Environmental Management, 25(1), 80-94.
  • Batra, G., Kaufmann, D., & Stone, A. H. (2003). Investment climate around the world: Voices of the firms from the World Business Environment Survey. The World Bank.
  • Cooper, A. C., Gimeno-Gascon, F. J., & Woo, C. Y. (1994). Initial human and financial capital as predictors of new venture performance. Journal of business venturing, 9(5), 371-395.
  • Covin, J. G., & Slevin, D. P. (1989). Strategic management of small firms in hostile and benign environments. Strategic management journal, 10(1), 75-87.
  • Covin, J. G., Green, K. M., & Slevin, D. P. (2006). Strategic process effects on the entrepreneurial orientation-sales growth rate relationship. Entrepreneurship theory and practice, 30(1), 57-81.
  • Fairoz, F. M., Hirobumi, T., & Tanaka, Y. (2010). Entrepreneurial orientation and business performance of small and medium scale enterprises of Hambantota District Sri Lanka. Asian Social Science, 6(3), 34.
  • Fayaz, M., & Shah, S. A. (2017). Relationship between Entrepreneurial Orientation and Firm Performance: Moderation of Transformational Leadership in the Context of Pakistani SMEs.
  • Gunawan, T., Jacob, J., & Duysters, G. (2016). Network ties and entrepreneurial orientation: Innovative performance of SMEs in a developing country. International Entrepreneurship and Management Journal, 12(2), 575-599.
  • Haider, S. H., Asad, M., & Fatima, M. (2017). Entrepreneurial orientation and business performance of manufacturing sector small and medium scale enterprises of Punjab Pakistan. European Business and Management, 3(2), 21-28.
  • Hernández-Linares, R., & López-Fernández, M. C. (2018). Entrepreneurial orientation and the family firm: Mapping the field and tracing a path for future research. Family Business Review, 31(3), 318-351.
  • Hoque, A. S. M. M. (2018). The effect of entrepreneurial orientation on Bangladeshi SME performance: Role of organizational culture. International Journal of Data and Network Science, 2(1), 1-14.
  • Hughes, M., & Morgan, R. E. (2007). Deconstructing the relationship between entrepreneurial orientation and business performance at the embryonic stage of firm growth. Industrial marketing management, 36(5), 651-661..
  • Hussain, J., Abbas, Q., & Khan, M. A. (2017). Entrepreneurial Orientation and Performance: The Moderating Effect of Market Orientation. Global Management Journal for Academic & Corporate Studies, 7(1), 9.
  • Imran, M., Aziz, A., Hamid, S., Shabbir, M., Salman, R., & Jian, Z. (2018). The mediating role of total quality management between entrepreneurial orientation and SMEs export performance. Management Science Letters, 8(6), 519-532.
  • Islam, M. A., Khan, M. A., Obaidullah, A. Z. M., & Alam, M. S. (2011). Effect of entrepreneur and firm characteristics on the business success of small and medium enterprises (SMEs) in Bangladesh. International Journal of Business and Management, 6(3), 289.
  • Javed, A., Yasir, M., & Majid, A. (2018). Psychological factors and entrepreneurial orientation: Could education and supportive environment moderate this relationship?. Pakistan Journal of Commerce and Social Sciences (PJCSS), 12(2), 571-597.
  • Knight, G. (2000). Entrepreneurship and marketing strategy: The SME under globalization. Journal of international marketing, 8(2), 12-32.
  • Koe, W. L. (2013). Entrepreneurial Orientation (EO) and Entrepreneurial Orientation (EO) and Companies (GLCs). Journal of Entrepreneurship, Management and Innovation, 9(3), 21-41.
  • Lumpkin, G. T., & Dess, G. G. (1996). Enriching the Entrepreneurial Orientation Construct-A Reply to
  • Mason, M. C., Floreani, J., Miani, S., Beltrame, F., & Cappelletto, R. (2015). Understanding the impact of entrepreneurial orientation on SMEs performance. The role of the financing structure. Procedia Economics and Finance, 23, 1649-1661.
  • Mazanai, M., & Fatoki, O. (2012). Access to finance in the SME sector: A South African perspective. Asian Journal of Business Management, 4(1), 58-67.
  • McKelvie, A., & Wiklund, J. (2010). Advancing firm growth research: A focus on growth mode instead of growth rate. Entrepreneurship theory and practice, 34(2), 261-288.
  • Miller, D. (1983). The correlates of entrepreneurship in three types of firms. Management science, 29(7), 770-791.
  • Muchiri, M., & McMurray, A. (2015). Entrepreneurial orientation within small firms: A critical review of why leadership and contextual factors matter. Small Enterprise Research, 22(1), 17-31.
  • Othman, N., Hashim, N., & Ab Wahid, H. (2012). Readiness towards entrepreneurship education: Students and Malaysian universities. Education Training, 54(8/9), 697-708.
  • Rambe, P., & Mosweunyane, L. (2017). A poverty-reduction oriented perspective to small business development in South Africa: A human capabilities approach. African Journal of Science, Technology, Innovation and Development, 9(3), 289-302.
  • Rogo, H. B., Shariff, M. N. M., & Hafeez, M. H. (2017). Moderating effect of access to finance on the relationship between total quality management, market orientation and small and medium enterprises performance: A proposed framework. International Review of Management and Marketing, 7(1), 119-127.
  • Runyan, R. C., Ge, B., Dong, B., & Swinney, J. L. (2012). Entrepreneurial orientation in cross-cultural research: assessing measurement invariance in the construct. Entrepreneurship Theory and Practice, 36(4), 819-836.
  • Shahbaz, M., Sbia, R., Hamdi, H., & Ozturk, I. (2014). Economic growth, electricity consumption, urbanization and environmental degradation relationship in United Arab Emirates. Ecological Indicators, 45, 622-631.
  • Sohn, H., Farrar, C. R., Hemez, F. M., Shunk, D. D., Stinemates, D. W., Nadler, B. R., & Czarnecki, J. J. (2003). A review of structural health monitoring literature: 1996-2001. Los Alamos National Laboratory, USA
  • Subhan, Q. A., Mehmood, M. R., & Sattar, A. (2013, January). Innovation in Small and Medium Enterprises (SME's) and its impact on Economic Development in Pakistan. In Proceedings of 6th international business and social sciences research conference (pp. 3-4).
  • Tan, J. (2007). Phase transitions and emergence of entrepreneurship: The transformation of Chinese SOEs over time. Journal of Business Venturing, 22(1), 77-96.
  • Tipu, S. A. A., Ryan, J. C., & Fantazy, K. A. (2012). Transformational leadership in Pakistan: An examination of the relationship of transformational leadership to organizational culture and innovation propensity. Journal of Management & Organization, 18(4), 461-480.
  • TomÅ¡ič, N., Bojnec, Å ., & Simčič, B. (2015). Corporate sustainability and economic performance in small and medium sized enterprises. Journal of cleaner production, 108, 603-612.
  • Wiklund, J., & Shepherd, D. (2005). Entrepreneurial orientation and small business performance: a configurational approach. Journal of business venturing, 20(1), 71-91.

Cite this article

    APA : Fayaz, M., Rahman, S. U., & Rauf, A. (2020). The Influence of Environmental Factors and Access to Financial Capital on the Link Between Entrepreneurial Orientation and SMEs Performance: A Case from Pakistan. Global Social Sciences Review, V(I), 146-153. https://doi.org/10.31703/gssr.2020(V-I).15
    CHICAGO : Fayaz, Muhammad, Shams Ur Rahman, and Abdur Rauf. 2020. "The Influence of Environmental Factors and Access to Financial Capital on the Link Between Entrepreneurial Orientation and SMEs Performance: A Case from Pakistan." Global Social Sciences Review, V (I): 146-153 doi: 10.31703/gssr.2020(V-I).15
    HARVARD : FAYAZ, M., RAHMAN, S. U. & RAUF, A. 2020. The Influence of Environmental Factors and Access to Financial Capital on the Link Between Entrepreneurial Orientation and SMEs Performance: A Case from Pakistan. Global Social Sciences Review, V, 146-153.
    MHRA : Fayaz, Muhammad, Shams Ur Rahman, and Abdur Rauf. 2020. "The Influence of Environmental Factors and Access to Financial Capital on the Link Between Entrepreneurial Orientation and SMEs Performance: A Case from Pakistan." Global Social Sciences Review, V: 146-153
    MLA : Fayaz, Muhammad, Shams Ur Rahman, and Abdur Rauf. "The Influence of Environmental Factors and Access to Financial Capital on the Link Between Entrepreneurial Orientation and SMEs Performance: A Case from Pakistan." Global Social Sciences Review, V.I (2020): 146-153 Print.
    OXFORD : Fayaz, Muhammad, Rahman, Shams Ur, and Rauf, Abdur (2020), "The Influence of Environmental Factors and Access to Financial Capital on the Link Between Entrepreneurial Orientation and SMEs Performance: A Case from Pakistan", Global Social Sciences Review, V (I), 146-153
    TURABIAN : Fayaz, Muhammad, Shams Ur Rahman, and Abdur Rauf. "The Influence of Environmental Factors and Access to Financial Capital on the Link Between Entrepreneurial Orientation and SMEs Performance: A Case from Pakistan." Global Social Sciences Review V, no. I (2020): 146-153. https://doi.org/10.31703/gssr.2020(V-I).15