Entrepreneurial Orientation and Start-Up Performance: A Configurational Approach

Abstract

Abstract The relationship between entrepreneurial orientation and firm performance has been the object of a number of studies, but the literature has not yet reached a consensus about the true relationship between the two variables. Previous research attributes this lack of consensus to the moderating effect of numerous variables, including those related to the firm’s environment. While the literature evaluates the direct and moderating effects of uncertainty and hostility on the relationship between entrepreneurial orientation and firm performance, no one has investigated how these environmental variables simultaneously affect this relationship. To fill this gap, we use a configurational approach to clarify the nature of the relationship between entrepreneurial orientation and firm performance and investigate how hostility and uncertainty jointly moderate this relationship. Our arguments are tested using a sample of 140 Brazilian start-ups, and we conclude that there is a positive relationship between entrepreneurial orientation and firm performance. Nevertheless, this relationship is jointly conditioned by the level of environmental hostility and uncertainty.