Small and Medium Enterprises in the Emerging Economies: Does Entrepreneurial Orientation Matters?

Small and Medium Enterprises (SMEs) are famous for the role they play in economic development of nations and regions in particular. Hence attention of scholars, researchers, government and non-governmental officials is drawn to it. However, the SMEs in Nigeria suffer serious setback, and great failure rate in the recent times are noticed. Purpose: The study is purposely to examine relationship between Entrepreneurial Orientation (EO) and SMEs performance in Northeast region of Nigeria which is known for its high poverty level and general backwardness, coupled with serious insecurity of lives and property due to the activities of Boko Haram. Methodology/materials: The data was collected from a sample of 300 owner/managers of SMEs in Northeast Nigeria using questionnaire on a Likert scale of 1-10. These data were tested for validity, normality and common method bias using SPPS. The analysis obtained 0.089 Cronbach‘s Alpha value and Kolmogorov value less 0.05. Hence, the validity, normality and the AVE requirement were met. Mean and Standard Deviation were used to describe the data, and hypotheses tested using partial least squared method in SmartPLS 3. Finding: Hypothesis (H1) i.e. innovativeness was not supported, but the remaining two proactiveness and risk taking (H2 and H3) were supported. Implications: This implies that innovativeness of SMEs in the region does not influence the firm performance. But proactiveness and risk-taking ability of SMEs in the region boosts performance. Originality: Most EO studies suggest that environment determines relationship between EO and SMEs performance; and interestingly, overwhelming major of such studies were concentrated in developed nations. Hence, this current study examines EO-SMEs performance relationship in backward performing region of Nigeria with different environmental background.