Roles of Government Support Policies on Entrepreneurial Orientation and SMEs Performance in an African Context

Abstract

SMEs are the engines of job development, notwithstanding their high failure rates in Ghana, Africa. This research aim is to develop a theoretical model anchored on the Resource-Based View (RBV) theory emphasising that entrepreneurial orientation (EO) as an internal resource and government support policies (GSPs) as another external resource would enhance SMEs' performance when used properly. Secondly, we explored how GSPs influence SMEs' EO and performance relationships using three distinct entrepreneurial orientation constructs. Using a quantitative survey, 369 questionnaires were randomly obtained from Ghanaian SMEs for data analysis via PLS-SEM. Based on the adopted three EO constructs, the results demonstrated a significant influence of GSPs on SMEs' innovativeness, risk proclivity, and performance, and not on proactiveness. Besides, the findings show proactiveness as having a significant impact on SMEs' performance. Our study is limited to services and manufacturing SMEs/firms, which should be considered in deducing our findings and conclusions. Finally, our study provides inferences for policyrnakers, practitioners, and for research directions.