The Effects of Entrepreneurial Orientation on SMEs' Performance and the Moderating Role of Debt Finance: Evidence from Kitwe, Zambia
The Moderating Role of Debt Finance: Evidence from Kitwe, Zambia
DOI:
https://doi.org/10.5281/zenodo.21324174Keywords:
Entrepreneurial orientation, Innovation, Competitive aggressiveness, Risk-Taking, Debt finance, Moderating and PerformanceAbstract
This research aimed at examining the effects of entrepreneurial orientation on the performance of SMEs and the moderating role of debt finance in the Zambian context. Drawing on insights from the trade-off and Resource-based view (RBV) theories, the study sought to evaluate the relationship between entrepreneurial orientation, conceptualised as levels of Innovativeness, competitive aggressiveness, and risk-taking, and firm performance, and the moderating effects of debt finance on this relationship.Design/ Methodology - The study adopted a cross-sectional quantitative research design, using primary data collected from 216 entrepreneurs in the Zambian construction industry via an online survey questionnaire. Data was analysed in SPSS using correlation and regression analysis. Findings - The results of the study show that, of the three dimensions of entrepreneurial orientation, only innovation had a significant positive effect on firm performance. Access to debt finance also had a positive effect, moderating the relationship between innovativeness and firm performance. Implication for stakeholders, when innovation and debt finance increase, performance is likely to improve. Both start-ups and established businesses can use debt financing to expand and overcome difficult economic situations. A valuable contribution has been made to the under-researched context of Zambia in EO and Debt finance studies.
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