Understanding early-stage firm performance: the explanatory role of individual and firm level factors
Year: 2020
Type: article
Abstract: Purpose This study presents and validates a theoretical model linking individual characteristics of the founding or lead innovative entrepreneur of a start-up venture – the entrepreneur's values, entrepreneurial attitudes and entrepreneurial self-efficacy – to the firm's entrepreneurial orientation (EO) and market orientation (MO) and, ultimately, to firm performance. Design/methodology/approach We conducted a survey on a stratified random sample of founders of early-stage South Australian micro- and small enterprises with a response rate of 24% ( N = 204). Structural equation modelling was used to evaluate the model. Findings The study found that there is a significant relationship between the individual lead entrepreneur and firm strategies developed in early-stage firms in explaining firm performance. It also found that internal values are positively related to entrepreneurial attitude. Entrepreneurial attitude is positively related to entrepreneurial self-efficacy and EO innovativeness. In turn, entrepreneurial self-efficacy is related to innovativeness, proactiveness and risk-taking. The proactiveness dimension of EO and entrepreneurial attitude is related to MO. Entrepreneurial self-efficacy, innovativeness and MO are related to firm performance. Research limitations/implications This research was limited to entrepreneurial ventures in South Australia and may lack generalisability in other states and countries. Originality/value The research contributes to the understanding of the heterogeneity within self-employed individuals, in particular among innovative entrepreneurs, by expanding insights regarding antecedents and consequences of the entrepreneurial process. It develops insights into the links of individual-level constructs with firm-level constructs to develop a more meaningful understanding of new venture creation and performance. It enhances our knowledge of the heterogeneity within the group of self-employed by exploring the individual entrepreneurial antecedents of performance in early-stage firms.
Authors: Pi-Shen Seet, Noel Lindsay, Fredric Kropp
Language: English
Subfield: Management of Technology and Innovation
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W3033342192