Entrepreneurial orientation and social ties in transitional economies

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Luu, Ngoc and Ngo, Liem (2018) Entrepreneurial orientation and social ties in transitional economies. Long Range Planning. ISSN 0024-6301

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Abstract

Recent research suggests that entrepreneurial orientation (EO) has a more complex effect on
performance (i.e. non-linear instead of linear) than previously considered. We extend this view
by examining the non-linear effect of each individual dimension of EO (i.e. innovativeness,
proactiveness, and risk-taking) on firm performance in the context of a transitional, collectivist
economy. Drawing upon social capital theory, we also examine under which social capital
conditions (i.e., business and political ties) each dimension of EO is most effective. Using
survey data from 137 firms in Vietnam Top 500 Companies, this study shows that
innovativeness and proactiveness have inverted U-shaped relationships with firm performance,
while the effect of risk-taking on firm performance is also non-linear but in the form of
increasing returns. Findings also show that social capital from business ties differentially
moderates the effects of EO dimensions on performance. Similarly, social capital from political
ties has different moderating effects on the innovativeness-performance and proactivenessperformance linkages. The findings urge managers of firms operating in transitional economies
to take the levels of social capital from business ties and political ties into consideration when
making their decision on which entrepreneurial strategy to pursue.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Business and Management
Research Centres and Groups: Marketing Innovation Research Group
Subjects: H Social Sciences > HF Commerce > HF5001 Business
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Depositing User: Ngoc Luu
Date Deposited: 05 Apr 2018 10:38
Last Modified: 23 May 2018 14:03
URI: http://srodev.sussex.ac.uk/id/eprint/74830

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