Filling the entrepreneurial orientation-performance gap: The mediating effects of exploratory and exploitative innovations

Abstract

Drawing on previous literature proposing that entrepreneurial orientation (EO) reflects a disposition toward, rather than actual involvement in, entrepreneurial activity, and on the resource-based view of the firm, we complement the literature concerning the EO-performance relationship with the introduction of exploratory innovation and exploitative innovation as mediating variables accounting for entrepreneurial behavior. Data from 228 adolescent companies indicate the existence of an EO-entrepreneurial behavior gap and support the predicted mediating effects. In this context, the constituent dimensions of EO differ in their effects on exploration and exploitation, and performance, calling for an exacting consideration of the interplay of orientation, activity, and performance.