Abstract
Corporate entrepreneurship creates opportunities in employment, technological advances, value creation, and cultural transformation for entrepreneurial ecosystems, entrepreneurs, governments, economies, and society around the globe. The purpose of this study is to assess the impact of corporate entrepreneurship on the financial performance of subsidiaries in Colombian business groups under the moderating effect of the environmental dynamism, because the relationship between corporate entrepreneurship and financial performance in emerging economies must differ from developed economies. Using a cross-sectional structural equation modeling analysis, this study assessed the impact of entrepreneurial orientation and corporate venturing on the firm financial performance of 87 subsidiaries of Colombian business groups at different levels of environmental dynamism. This study also confirms that the relationship between corporate entrepreneurship and performance is context-dependent and that entrepreneurial orientation has a strong and positive causal relationship with corporate venturing. Additionally, subsidiaries of Colombian business groups increase their financial performance when also does the entrepreneurial orientation, and decrease financial performance when so does corporate venturing. Furthermore, the results show that environmental dynamism does not have a moderating effect on the relationship between corporate entrepreneurship of subsidiaries in Colombian business groups and their performance. This paper would contribute to important areas in Latin America business, where such studies are scarce.
Highlights
Nowadays, corporate entrepreneurship (CE) is an important trend to improve firm financial performance (FP) (Bouchard & Fayolle, 2017; Ferreira, Fernandes, & PerisOrtiz, 2018; Ireland, Covin, & Kuratko, 2009a; Siota & Prats, 2020)
environmental dynamism (ED) has a positive correlation with the variables technological entrepreneurship (TE) and expansion and growth (EG); and revenue growth (RG) has a negative correlation with product innovation (PI)
It suggests that the willingness to be innovative, proactive, competitive, autonomous, and risktaking oriented in the subsidiaries of Colombian business groups (SCBG) has a positive relationship with the development of products and firms consolidation; this is in line with Dess and Lumpkin (2005), who stated that “firms often rely on an entrepreneurial orientation (EO) to enhance their corporate venturing activities” (p. 148)
Summary
Corporate entrepreneurship (CE) is an important trend to improve firm financial performance (FP) (Bouchard & Fayolle, 2017; Ferreira, Fernandes, & PerisOrtiz, 2018; Ireland, Covin, & Kuratko, 2009a; Siota & Prats, 2020). Little research to date has examined those effects in emerging economies (De Villiers-Scheepers, 2012; Demirkan, Yang, & Jiang, 2019), leaving a gap in the literature about CE in Latin America, where it is a recent trend (Kantis & Angelelli, 2020; Prats & Siota, 2018). This comes up with the question of whether these causal relations are similar for emerging economies, because their conditions are very different (Kelley, Singer, & Herrington, 2016)
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