What drives entrepreneurial orientation in small firms? The roles of owner-manager and financial conditions

Abstract

The economic importance of small and medium sized enterprises (SMEs) and entrepreneurship has increased during last decades significantly. Therefore, it is valuable to investigate the underlying mechanisms of the antecedents of entrepreneurial activity in SMEs. Our study investigates the drivers of entrepreneurially oriented behaviour (EO) as a main contributor to entrepreneurship in Finnish small owner-managed firms. We focus on entrepreneur’s work values and experience as entrepreneur and firm’s financial slack and financial conservatism. The empirical data were drawn from a mail survey of 194 Finnish owner-managed small companies. Our results reveal that owner-manager’s intrinsic and status work values and experience are the strongest drivers of EO. This study contributes to the EO literature by focusing on the personal characteristics of the entrepreneur or top manager as owner’s personality, values and identities are recognised as important factors fostering entrepreneurial behaviour, especially in the small firm context.

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