Does the firm size matter on firm entrepreneurship and performance?

Abstract

Purpose The purpose of this paper is to investigate whether the relationship between firm entrepreneurship and performance is dependent on firm size within a small and medium‐size enterprise (SME) population, using non‐manufacturing, industry‐specific empirical data. Design/methodology/approach Survey methodology was employed, using a national sample of US apparel import intermediary (AII) SMEs. Regression analysis was performed to determine the type of the moderator variable, firm size, and to test statistical significance of the firm size effect on the relationship between firm entrepreneurship and performance measures. Findings The paper's results suggested that the firm size effect was present on the relationship between firm entrepreneurship and SMEs' longevity performance; however, there was no statistical significance of the firm size effect on the relationship between firm entrepreneurship and SMEs' creative contribution or profitability performance. Research limitations/implications Although the study results were based on randomly selected nation‐wide surveys, the findings should be viewed as industry‐ and time‐specific; generalization to a larger population, or to other firms, must be undertaken with caution. Practical implications These findings help to recognize and understand the heterogeneity of the relationship between firm entrepreneurship and performance even within a population of SMEs. Therefore, the results suggest that AII SME managers should put different emphasis on firm entrepreneurship, depending on specific goals and the firm size. Originality/value The paper shows that different approaches to SME entrepreneurship research are needed to recognize diversity within an SME population. The study also supports the view that performance measures are not necessarily correlated; thus justification of selection is critical.

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