Entrepreneurial orientation and firm performance in Italian firms: The moderating role of competitive strategy

Abstract

© 2020, Emerald Publishing Limited.

Purpose: Considering that context is important and relying on a contingency perspective, the purpose of the study is to analyze the relationship between an entrepreneurial orientation (EO) and firm performance in one of the world's oldest economies: Italy. The contingency perspective relies on competitive strategy as a moderating variable. Design/methodology/approach: Using a mix of primary and secondary data sources, relationships are explored in a sample of 229 Italian for-profit firms. Moderated regression analysis is used for the sample and additional tests are conducted by firm size groupings. Findings: The analysis suggests that an EO is positively associated with firm performance in the sample firms. Further, competitive strategy acts as a moderating influence: a low-cost strategy negatively influences the relationship, while a differentiation strategy positively influences the relationship. The firm size groupings do not appear to affect the results. Research limitations/implications: The study examines only for-profit firms in a single country, Italy; therefore, generalizability is limited. The results must be interpreted in light of these limitations. Originality/value: This study contributes to the entrepreneurship literature by considering a relatively new international context in the EO–firm performance relationship. Further, a new contingency perspective is advanced by considering competitive strategy. In doing so, this study extends an understanding of the conditions under which an EO might be associated with firm performance.