How Entrepreneurial Orientation Influences Firm Performance: From Outside-in and Inside-out Views

Abstract

Drawing on the theories of resource-based view (RBV), entrepreneurship perspective, and external approach, this study combines outside-in and inside-out views in the field of strategic management and examines the relationship between entrepreneurial orientation (EO) and firm performance: the moderating and meadiating effects of environmental dynamism and resource attributes. Resource attributes refer to the value and rareness of resource¡Vcapability combinations (value and rareness). By combining data collected via a questionnaire survey and a secondary database from 201 public firms in Taiwan, this study finds that firms with strong EO are likely to exploit resource attributes that promote firm performance, and the resource attributes also significantly mediate the association between EO and firm performance, supporting the resource-based perspective of entrepreneurship. Moreover, using a multi-group analysis in SEM technique and regression analysis, this study further finds that the EO-resource attributes relationship is moderated by environmental dynamism. That is, when firms are located in environmental dynamism, EO is likely to exploit value and rareness to respond external opportunities, confirming environmental dynamism of external approach.