Institutional Environment for Entrepreneurship, Strategic Flexibility, and Entrepreneurial Orientation

Abstract

Entrepreneurial orientation (EO) is a key source of competitive advantage. Yet, firms vary strongly in approaching it, making what are the antecedents of EO a serious question. This article tests the individual and joint effects of institutional environment for entrepreneurship (IEE) and strategic flexibility on EO. It finds that the governmental dimension of IEE (Governmental IEE) has a nonsignificant relationship with EO, but the societal dimension of IEE (Societal IEE) and strategic flexibility both are positively related to EO. Moreover, Governmental IEE and strategic flexibility interactively have a positive effect on EO, whereas the joint effect of Societal IEE and strategic flexibility is negative. The findings enrich the knowledge on the antecedents of EO and aid in elaborating the implications of IEE and strategic flexibility.