Entrepreneurial Orientation and Financial Performance of Nigerian SMEs

The growth and survival rate of small and medium-sized enterprises (SMEs) in Nigeria has been one of the major concerns of the policy makers, practitioners and scholars. The strategy and entrepreneurship literature suggests that an entrepreneurial orientation (EO) improves firm performance, but empirical results are mixed. In this study, we investigate how EO dimensions; innovativeness, proactiveness, risk-taking and competitive aggressiveness), affect financial performance of SMEs in Nigeria. In doing so, the study examines the moderating impact of key environmental characteristics; dynamism and hostility on these relationships. A total of 352 owner/managers participated in the research. Our findings indicate, that hypotheses 1-4 are supported, while hypotheses 5-11 are partially supported except for that regarding the moderating impact of environmental dynamism on the proactive- performance relationship, which was not found to be significant. These findings demonstrate that EO dimensions alone are not a significant determinant of financial performance for SMEs in Nigeria; it is being influenced by environmental dynamism and hostility.