The Role of Creating Shared Value and Entrepreneurial Orientation in Generating Social and Economic Benefits: Evidence from Korean SMEs

Joohwan Seo · Jiseon Lee · Sung-gwang Jung

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Entrepreneurship Studies and Influences Corporate Social Responsibility Reporting Firm Innovation and Growth

Abstract

This study investigates the effect of entrepreneurial orientation (EO; one of the most broadly acknowledged firm-level constructs) on the performance of small- and medium-sized enterprises (SMEs). Furthermore, we analyze the moderator effect of creating shared value (CSV) on firm performance. Our analysis was conducted using a structural equation model on a stratified sampling method of 294 manufacturing and service SMEs in Korea. The results show that an SME’s efforts in some variables in EO constructs are statistically positively related to both its financial (economic benefits) and non-financial performance (social benefits). Our study results also reveal that there is a significant positive moderator effect of CSV on the EO-performance relationship. This implies that CSV, when bundled with EO, can boost firm performance and provide SMEs with not only a competitive and sustainable advantage but also reduces their risk. This research contributes to the extant literature by investigating the interactive effect of CSV on the relationship between EO and firm performance in the context of SMEs, which has received scant attention in the extant literature. In the last section, the limitations and future research agenda of this study are presented.

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References

1981Evaluating Structural Equation Models with Unobservable Variables and Measurement Error 1996Clarifying the Entrepreneurial Orientation Construct and Linking It To Performance 1989Strategic management of small firms in hostile and benign environments 1983The Correlates of Entrepreneurship in Three Types of Firms 1998Innovation, Market Orientation, and Organizational Learning: An Integration and Empirical Examination 2004Entrepreneurial orientation and small business performance: a configurational approach 2001Linking two dimensions of entrepreneurial orientation to firm performance 2003Knowledge‐based resources, entrepreneurial orientation, and the performance of small and medium‐sized businesses

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