Entrepreneurial Orientation, Technological Innovation Orientation, and Management Performance of SMEs in Korea: The Role of Absorption Capacity

Abstract

Purpose: This study is to empirically demonstrate the influential relationship among entrepreneurial orientation, technological innovation orientation, absorption capacity, and sustainable management performance by comparing small urban and non-urban industrial enterprises. Design/methodology/approach: A data survey was conducted using e-mails with 272 eligible respondents in Korea. The PLS-SEM approach was implemented to estimate the measurement and structural model. Findings: The analysis results indicated that for small urban enterprises, entrepreneurial orientation and technological innovation orientation do not directly affect management performance, but they have a statistically significant effect on absorption capacity. And it showed that absorption capacity has a strong positive relationship with management performance. In contrast, all hypotheses including influential relationships were found to be significant for non-urban enterprises. Research limitations/implications: Limitations of this study include the generalizability of the findings in a sample of small Korean industrial enterprises. Applying the outcomes to other countries or regions may yield different results depending on the management environment variables. Originality/value: The size and characteristics of industry types of small Korean industrial enterprises tend to be distinguished by region, so we adopted a differentiated approach of making a distinction between urban and non-urban types. It also contributes to existing research by highlighting the roles of absorptive capacity as mediators in connecting entrepreneurial orientation and technological innovation orientation with management performance.