The relationship between corporate entrepreneurship and firm performance: Evidence from Malaysian large companies

Abstract

The present study is focused on the effects of corporate entrepreneurship (CE) on performance of large sized firms in Malaysia. These companies are currently facing more challenging environments compared to past, as their survival rates are declining and suffering from low level of profitability. The paper uses survey method and secondary sources by collecting data from 130 companies listed in the main market of Bursa Malaysia. In order to analyze the survey data, the study uses Partial Least Squares (PLS) approach to Structural Equation Modelling (SEM). This study has concluded that the entrepreneurial orientation (EO) is positively related to firm’s profitability but has no relationship with firm’s growth whereas corporate venturing (CV) is positively related to firm’s growth but has no relationship with firm’s profitability. The environmental dynamism moderates these relationships. The paper has significant implications for the top management decision making on the importance of CE on firm growth and profitability. Besides, in developing countries like Malaysia, most of the researches on entrepreneurship are based on small firms or individual entrepreneurships. Thus, it is timely to conduct research on CE among the large sized firms to further expand the literature.