Entrepreneurial orientation and firm performance in Italian firms The moderating role of competitive strategy

Purpose Considering that context is important and relying on a contingency perspective, the purpose of the study is to analyze the relationship between an entrepreneurial orientation (EO) and firm performance in one of the world's oldest economies: Italy. The contingency perspective relies on competitive strategy as a moderating variable. Design/methodology/approach Using a mix of primary and secondary data sources, relationships are explored in a sample of 229 Italian for-profit firms. Moderated regression analysis is used for the sample and additional tests are conducted by firm size groupings. Findings The analysis suggests that an EO is positively associated with firm performance in the sample firms. Further, competitive strategy acts as a moderating influence: a low-cost strategy negatively influences the relationship, while a differentiation strategy positively influences the relationship. The firm size groupings do not appear to affect the results. Research limitations/implications - The study examines only for-profit firms in a single country, Italy; therefore, generalizability is limited. The results must be interpreted in light of these limitations. Originality/value This study contributes to the entrepreneurship literature by considering a relatively new international context in the EO-firm performance relationship. Further, a new contingency perspective is advanced by considering competitive strategy. In doing so, this study extends an understanding of the conditions under which an EO might be associated with firm performance.