Bolstering Small Business Performance via Entrepreneurial Orientation Practices, External Finance and Competitive Advantages

Abstract

Numerous contributions of small business performance to economic development have been recognised since many years ago. However, many businesses are unable to sustain due to various factors including lack of entrepreneurial orientation practices, insufficient financial resources and no competitive advantage. The main aim of this paper is to analyse the impact of entrepreneurial orientation practices and access to external finance on small business performance. This research has introduced serial mediating effects of access to external finance and competitive advantages toward the relationship between entrepreneurial orientation and small business performance. A sample of 280 small businesses in the East Coast Region of Malaysia, which has utilised the proportionate stratified random sampling, was selected to construct a structural model. The structural model has confirmed that entrepreneurial orientation practices are significantly related to small business performance. The study has verified that access to external finance has partially mediated the relationship between entrepreneurial orientation practices and small business performance. In extending existing literature, this study has underlined entrepreneurial orientation practices and small business performance as partially serial mediated by the access to finance and competitive advantage. Besides consolidating the Resource-based View theory, this research is also significant to government bodies, NGOs, private bodies, policymakers and small entrepreneurs. The research highlights the importance of entrepreneurial orientation practices and sufficient access to finance on generating competitive advantages, ultimately increasing business performance variation.