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MEDIATING ROLE OF COMPETITIVE ADVANTAGE ON THE RELATIONSHIP BETWEEN ENTREPRENEURIAL ORIENTATION AND SMALL AND MEDIUM ENTERPRISES (SMEs) PERFORMANCE IN ABUJA, NIGERIA
ABSTRACT
Small and medium enterprises are considered to represent the driving forces of sustainable local economic development throughout the world. However, in the Federal Capital Territory (FCT), and Nigeria as a whole, SMEs performance has been below expectation. Entrepreneurial Orientation (EO) is regarded as a very important predictor of firm performance. However, there is still lack of sufficient studies that have examined the effect of EO on SME performance in a developing and unstable economy like Nigeria. As a result, this study investigated the effect of EO on SMEs performance using innovativeness, proactiveness and risk taking as proxies for measuring EO. The population consist of 2,690 registered SMEs operating within the federal capital territory with sample size of 427. Copies of the questionnaire were distributed using stratified sampling technique. 337 copies of the questionnaire were used for analysis. PLS-SEM path modelling was employed to analyze the data. Six hypotheses were developed in directional form and all were empirically supported. The findings provided that there is significant relationship between innovativeness, proactiveness, risk taking and performance. The study also concluded that competitive advantage mediates the relationship between innovativeness, proactiveness and risk taking. The study therefore recommended that Managers of SMEs should ensure they actively introduce innovations in their business processes; ensure they are always proactive in assessing and initiating new products or processes. Finally, firms should not shy away from taking calculated risks as this will enable them to enjoy competitive advantage over their rivals.
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