Entrepreneurial orientation and small business performance: a case of East Coast Enterprises

The contemporary studies in small enterprises have sparked a heated debated the issues of business performance in their researches. This area of research, however, not only still limited in empirical studies, dependent on normative assumptions but also theoretically weak which leads to more focus on empirically robust studies subject to a series of complex factors that determine performance of small business. Among these, entrepreneurial orientation, access to finance and competitive advantage are determinants of business performance that needs a further study due to inconclusive results on previous findings. Therefore, the main objective of this research is to identify the relationship among entrepreneurial orientation, access to finance, competitive advantage and small business performance. Also, this study aims to examine the serial mediating effects of access to finance and competitive advantage in the relationship between entrepreneurial orientation and business performance. A data of 280 small businesses in East Coast of Malaysia drawn by questionnaires and proportionate stratified random sampling were analysed via covariance-based using Structural Equation Modelling (SEM-AMOS) techniques. Resulting this, the study found that four dimensions of entrepreneurial orientation were positively and significantly related to business performance. Moreover, access to finance and competitive advantage found partial mediated in the relationship between entrepreneurial orientation and business performance. While, the relationship between entrepreneurial orientation and business performance was partially serial mediated by the access to finance and subsequently, competitive advantage. Besides consolidating the Resource-based View theory about the importance of entrepreneurial orientation, access to finance and competitive advantage on business performance, this study also identified that high of entrepreneurial orientation able to increase the chances for enterprises to access to finance and increase competitive advantage which ultimately contributes to better business performance. Meanwhile, the findings enlighten small business owners including policy makers that entrepreneurial orientation, access to finance and competitive advantage were critical factors in improving business performance especially in Malaysia.