The relationship between regulatory focus and innovative performance of SMEs in Ghana: The role of entrepreneurial resilience, orientation and learning

Abstract

Most small and medium scale enterprises in Ghana neglect very critical performance indicators in their bossiness. As a result most SMEs do not survive till their fifth anniversary. The purpose of this study is to examine the relationship between prevention focus, promotion focus, resilience, and SME performance in Ghana. Furthermore, we investigated the moderation effect of entrepreneurial learning and Entrepreneurial orientation on the relationship between entrepreneurial resilience and SME performance in Ghana. Our results show that both promotion- and prevention-focused increase entrepreneurial resilience and SME performance significantly. This is an indication that there is a strong positive correlation between entrepreneurial resilience and success in both the individual and firm levels. This inference can therefore assist policy makers, politicians and various industry players in designing training programs on how to improve the resilience of SME owners in Ghana. Statistically our analysis shows that prevention focus (PreV) has a positive effect on entrepreneurial resilience (EntR) (β = 0.250; p<0.001), and promotion focus (PreM) has a positive effect on entrepreneurial resilience (EntR) (β = 0.268; p<0.001). Additionally, entrepreneurial resilience (EntR) has a positive effect on innovative performance (IP) (β = 0.547; p<0.001). Furthermore, the mediation results has shown that entrepreneurial resilience (EntR) mediates the relationship between prevention focus (PreV) and innovative performance (IP) (β = 0.136; p<0.001); as well as that of promotion focus (PreM) and firm performance (IP) (β = 0.146; p<0.001). Finally, the results with regards to moderation effects has shown that entrepreneurial orientation (EntO) partially moderates the relationship between entrepreneurial resilience (EntR) and innovative performance (IP) (β = 0.109; p<0.05), however, the result established that entrepreneurial learning (EntL) does not moderate the relationship between entrepreneurial resilience (EntR) and firm performance (IP) (β = -0.031; p<0.05). Using the Resource Based View theory, we concluded that, SME’s needs to adopted prevention (vigilant/avoidant strategies) by minimizing losses, and taking calculated risks with motivation from mentors to avoid loss as this would achieve resilience as well as promotion of strategies (eager/approach strategies) to achieve gains for their SMEs during economic disruption and economic downturn such as COVID-19. We concluded that SME’s could also achieve resilience when managers or owners of SMEs inspire the employees to work harder, and think outside the box to identify latent ideas and opportunities within their SME business environment.