Understanding early-stage firm performance: the explanatory role of individual and firm level factors

Pi-Shen Seet, Noel Lindsay and Fredric Kropp

International Journal of Manpower, 2020, vol. 42, issue 2, 260-285

Abstract: Purpose - This study presents and validates a theoretical model linking individual characteristics of the founding or lead innovative entrepreneur of a start-up venture – the entrepreneur's values, entrepreneurial attitudes and entrepreneurial self-efficacy – to the firm's entrepreneurial orientation (EO) and market orientation (MO) and, ultimately, to firm performance. Design/methodology/approach - We conducted a survey on a stratified random sample of founders of early-stage South Australian micro- and small enterprises with a response rate of 24% (N = 204). Structural equation modelling was used to evaluate the model. Findings - The study found that there is a significant relationship between the individual lead entrepreneur and firm strategies developed in early-stage firms in explaining firm performance. It also found that internal values are positively related to entrepreneurial attitude. Entrepreneurial attitude is positively related to entrepreneurial self-efficacy and EO innovativeness. In turn, entrepreneurial self-efficacy is related to innovativeness, proactiveness and risk-taking. The proactiveness dimension of EO and entrepreneurial attitude is related to MO. Entrepreneurial self-efficacy, innovativeness and MO are related to firm performance. Research limitations/implications - This research was limited to entrepreneurial ventures in South Australia and may lack generalisability in other states and countries. Originality/value - The research contributes to the understanding of the heterogeneity within self-employed individuals, in particular among innovative entrepreneurs, by expanding insights regarding antecedents and consequences of the entrepreneurial process. It develops insights into the links of individual-level constructs with firm-level constructs to develop a more meaningful understanding of new venture creation and performance. It enhances our knowledge of the heterogeneity within the group of self-employed by exploring the individual entrepreneurial antecedents of performance in early-stage firms.

Keywords: Self-employment; Antecedents; Consequences; Early-stage ventures; Values; Entrepreneurial attitude; Entrepreneurial self-efficacy; Entrepreneurial orientation; Market orientation; Firm performance (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijmpps:ijm-02-2019-0112

DOI: 10.1108/IJM-02-2019-0112

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