Linking natural resources and performance of small agricultural businesses: Do entrepreneurial orientation and environmental sustainability orientation matter?

Abstract

AbstractIt is still unclear how the natural environment influences the firm's performance. It is needed to understand how business activities that strongly depend on natural resources, as it is agriculture, manage their scarcity and uncertainty. Based on a sample of 150 small agricultural businesses, hierarchical regression was used to analyze how entrepreneurial orientation (EO) and environmental sustainability orientation (ESO) can shape the influence of natural resources on environmental performance (EP) and financial performance (FP). Supported by the Natural Resource‐Dependence Theory (NRDT), our study found that natural resources availability is determinant for FP. At the same time, EP depends on Land but not on water and climatic conditions. The results also support the resource‐based view (RBV), since EO and ESO are mediators in the association between natural resources and FP, representing powerful internal responses to agricultural businesses face the natural environment constraints.