Abstract
In this study the authors tried to identify mediating role of innovation and moderating role of size of enterprise in the relationship between entrepreneurial orientation and performance of Micro and Small Enterprises (MSEs). The researchers also investigated the effect that vary from enterprise size that basically means micro and small enterprises. For the purpose of this study data was collected from 384 MSE's operating in Punjab province. Initially the data was analyzed using SPSS 22 and later on for the development of structure equation modeling Smart PLS-3 was used. Only two aspects of entrepreneurial orientation have been analyzed; first one is risk taking and second one is pro-activeness, third most common aspect innovation has been taken as mediating variable as an enterprise cannot be innovative if it has not the capacity of risk taking and pro-activeness. These both aspects are attached to performance and also deals with innovation. The major contribution of the study is to identify any moderating effect of size of the enterprise over the relationship between entrepreneurial orientation, innovation and performance of MSEs. These elements basically show the contribution that is made by the innovation and performance of the MSE's. The objectives of the study were achieved, and it was found that there is no difference between performance of MSEs on the basis of entrepreneurial orientation and innovation. It is proved that the size of the enterprise is not the factor. The linkages found are affected by size of the enterprises.
Highlights
In the past few years business activities have increased, and dynamics of businesses have caused complexities in the business environment leading to need for innovation (Ahlin, Drnovšek, & Hisrich, 2013)
The current era is very competitive, all enterprises take the challenge of innovation to survive in the competitive environment
Innovation is important for the enhancement of profits in the local markets
Summary
In the past few years business activities have increased, and dynamics of businesses have caused complexities in the business environment leading to need for innovation (Ahlin, Drnovšek, & Hisrich, 2013). Considering the declining position of MSEs in the country the current study tries to focus on identifying any moderating effect of size and mediating effect of innovation between the relationship among risk taking, pro-activeness, and performance of MSEs (Brettel, Chomik, & Flatten, 2015). Pro-activeness is considered as vital for the growth and performance of large enterprises (Runyan, Droge, & Swinney, 2008), whereas, this study argues that MSEs operate in the same environment, so they have the same issue and need the same to perform well. Entrepreneurial orientation is considered as the combination of innovation, risk taking, and pro-activeness (Aloulou & Fayolle, 2005). The objective of current study is to focus on mediating role of innovation between risk taking, pro-activeness, and performance of MSEs, and to analyze if size of the enterprise moderates the relationship between risk taking, pro-activeness, innovation, and performance of MSEs
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