Despite scholarly debates on the role of entrepreneurial orientation, its effect on new venture performance remains largely understudied, particularly in the context of emerging economies. Determining this association is crucial and has an important implication for scholars and managers of SMEs to increase performance. Therefore, using the resource-based view and upper-echelon theories, this study examines this link by considering the mediating role of opportunity exploitation and the moderating role of transformational leadership in the case of an emerging market in Lebanon. The resource-based view theory discusses the importance of intangible and tangible resources in obtaining a sustainable competitive edge. The upper-echelon theory also connects the attributes of firm performance and top employee management. To achieve this purpose, we conducted a comprehensive survey of 411 managers and owners, 346 of whom were men and 65 of whom were women, of SMEs in the top five provinces of North Lebanon, South Lebanon, Mount Lebanon, Beirut, and Bekaa, where the majority of SMEs are located. This study also collected the data in 2022 and performed moderated mediation analysis to probe this nexus. The empirical results show that entrepreneurial orientation has a positive direct and indirect (through opportunity exploitation) effect on new venture performance. Furthermore, it reveals that opportunity exploitation has a positive effect on new venture performance and partially mediates the entrepreneurial orientation–new venture performance nexus. Furthermore, the results highlight that transformational leadership moderates the direct entrepreneurial orientation–new venture performance nexus, and the positive relationship is stronger for managers (or owners) with higher-level transformational leadership. Moreover, the results reveal that transformational leadership moderates the indirect effect between entrepreneurial orientation and new venture performance through opportunity exploitation, and the extent of the indirect effect is enhanced for managers (or owners) with higher-level transformational leadership. The results are robust and have important policy implications. The current research offers crucial managerial implications for the management of SMEs by paying attention to significant drivers of entrepreneurial orientation and opportunity exploitation. The findings also suggest that entrepreneurs and managers of new ventures must transform their entrepreneurial strategic posture into opportunity exploitation behaviors by pinpointing market inefficiencies and consumer needs, launching novel products and services, and taking advantage of opportunities for new products to enter the market to maximize financial gain.
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