The Relationship Between Entrepreneurial Orientation and Firm Performance From the perspective of MASEM: The Mediation Effect of Market Orientation and the Moderated Mediation Effect of Environmental Dynamism

Abstract

This research introduces Meta-Analysis Structural Equation Modeling (MASEM), a novel method that integrates meta-analysis (MA) and structural equation modeling (SEM). The method helps researchers to comprehensively understand issues in the strategic management field. Applying MASEM to analyze data from 112 papers, covering 101,981 observations, the results can be summarized as follows. (1) Entrepreneurial orientation (EO) is significantly positively correlated with firm performance (FP), which addresses the issue of inconsistency among prior studies’ findings. (2) There is a significantly positive correlation between EO and market orientation (MO) and a significantly positive relationship between MO and FP, indicating that MO is a mediator variable to the EO-FP. (3) Environmental dynamism (ED) increases a positive link exists between MO and FP; in other words, compared to low ED, the presence of high ED enhances the correlation between MO and FP significantly. (4) ED influences the slope of MO’s function as a mediator between EO and FP - that is, high ED increases the slope of the intermediary effect of MO on the MO-FP nexus, and low ED reduces the slope of the mediation effect of MO on the MO-FP nexus. These findings provide new thoughts and insights for studies on the correlation between EO and FP and offer substantial suggestions for enterprises. The aforementioned results indicate that besides providing deeper insights and a more comprehensive understanding, MASEM presents deeper insights for researchers and is more efficient than the traditional meta-analysis method. Moreover, MASEM can be applied to in other fields and used with other methods for greater in-depth analyses. Overall, the MASEM technique herein has high reliability and validity when utilized for discussing relationships among variables and gives more comprehensive and accurate conclusions in theoretical and practical aspects.