Influence of Entrepreneurship Orientation on Financial Performance of Construction SMEs in Nigeria

Abstract

Entrepreneurship orientation (EO) recently came to light as a major business strategy for improving firm performance in different contexts. The goal of this paper is to investigate the impact of EO dimensional components as independent constructs on the financial performance of Nigerian construction SMEs. A field survey method was used to collect information from 139 owners and top managers of construction SME in Abuja and Lagos, Nigeria. Partial Least Square-Structural Equation Modeling (PLS-SEM) technique with the aid of Smart PLS 3.0 software was used to analyse and tests the hypothesized relationships between EO dimensional components and financial performance of construction SME’s. Finding shows that EO strongly explains 78.1% of the variance in construction SME’s financial performance. Innovativeness, proactiveness and autonomy orientations were found to correlate positively with financial performance while competitive aggressiveness and risk taking reported no significant relationship with financial performance. The study concludes that EO has a very strong potential for boosting the financial outcomes of construction SMEs in Nigeria. The study recommends construction SMEs to leverage on EO strategies to engender improvement in their general corporate performance.

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