Effect Of Corporate Entrepreneurship On Firm Performance In Iranian .

Ahmadpour Daryani and Karimigrowth and benefit (performance factors) (Li etal., 2009). The researcher’s studies highlight theimportant role of knowledge creation process inthe performance of successful organizations(Chia, 2003; Gold et al., 2001; Kogut andZander, 2003; Matusik and Hill,1998; Nonakaand Takeuchi,1995).H2: Knowledge creation process will bepositively related to ASMEs performance.Setyanti et al. (2013) have studied the effects ofinnovative mediation on the relationship ofentrepreneurial orientation, knowledge sharing,and movement capabilities with firmperformance.In another study, Vidic (2013) has investigated195 small and medium-sized firms, trying tostudy the relationship between entrepreneurialorientation and knowledge creation and theireffect on the performance. Jimenez-Jimenez etal. (2008) emphasized on the positive relation oflearning orientation as mediation variable whenthey conducted the research on the effect oflearning orientation on innovativeness andbusiness performance. Calantone et al. (2002)have also shown in their researches themediation role of learning orientation in relationto innovativeness and business performance.Baker and Sinkula (2002) express that learningorientation affects the firm’s ability to create orapply different forms of knowledge. Clercq et al.(2010) have found the effect of the mediation ofcommitment to learning on such relation. Simonet al. (2011) too have found this effect. Li et al.(2009) have studied the mediation role ofknowledge creation and the effect of this role onthe relation of entrepreneurial orientation to firmperformance. In a study, Hitt et al. (2001) haveinvestigated the mediation role of humanresources affecting entrepreneurial orientationand its relation to the performance of techniqualfirm’s services. Hosseini and Eskandari (2013)studied the mediation role of human resourcesand environment factors affecting theentrepreneurial orientation and its relation toagricultural performance in Iran. Nevertheless,still there is not a correct answer regarding l orientation and its relation to firmperformance based on the studies of theseresearchers. It can be observed that corporateentrepreneurship affects the firm’s performancethrough mediation variables of learningorientation and knowledge creation.The following hypotheses were formed basedon the results of those studies.Hypothesis 4: Learning orientation rship and performance in ASMEs.Hypothesis 5: Knowledge Creation rship and performance in ASMEs.[ DOR: 20.1001.1.16807073.2017.19.2.16.3 ][ Downloaded from jast.modares.ac.ir on 2022-05-09 ]Learning Orientation and PerformanceLearning orientation is generally a vitalqualification and key factor for ng the business performance. Firms thatare able to learn can better adjust themselves toenvironmental changes (Day, 1994). Learningorientation leads to the increase of firmperformance as it drives them towardschallenging the theories and traditionaloperations of business. It also investigates themental and logical models related suchoperations (Grinstein, 2008). Various studieshave confirmed the positive and significantrelationship between the learning orientation andorganizational performance (Slater and Narver,1994; Hurley and Hult, 1998; Aragon-Correra etal., 2007; Shavazi, et al.2015; Wang, 2008;Frananz-Mesa and Alegre-Vidal, 2013;Jimenez-Jimenez, et al. 2008). Based on theliterature discussed above, we propose thefollowing hypothesis:H3: Learnin Orientation will be positivelyrelated to ASMEs performance.The Mediation Role of KnowledgeCreation and Learning OrientationThe studies conducted in the past on the effectof corporate entrepreneurship on the firmperformance present an incomplete picture. It isobvious that the relation between corporateentrepreneurship and firm performance is morecomplex than a simple relation (Lumpkin andDess, 1996; Wiklund and Shepherd, 2005).Zahra and Covin, 1995, have investigated manyvariables that can affect the relationship e or play the role of mediation.264

Corporate Entrepreneurship and SMEs Performanceselected using a stratified random samplingmethod. A direct mail survey approach was usedto get the data from owners and/or top managersof agricultural SMEs and the questionnaires weredistributed to agricultural SMEs whose mailaddress was available. Follow-up telephone callswere made to remind the respondents to returnthe questionnaire. In this process, 500questionnaires were mailed. Of the 500questionnaires mailed, 292 responses werereceived, of which 37 were incomplete. Theremaining 255 valid and complete questionnaireswere used for the quantitative analysis.The hypothesized research modelFrom the foregoing discussion, thehypothesizedcausalrelationshipsareillustrated in the research model, as shown inFigure 1.MethodologyThe methodology of this study will bediscussed in terms of data collection,measurement instrument, data analysis,validation of measurements, and reliability ofmeasurement.B. Measures[ DOR: 20.1001.1.16807073.2017.19.2.16.3 ][ Downloaded from jast.modares.ac.ir on 2022-05-09 ]A. Sample and Data CollectionB.1CorporateEntrepreneurship:Measurement of corporate entrepreneurship wasperformed across five dimensions by combiningtwo scales: corporate entrepreneurship scale usedby Antoncic and Hisrich (2004), and corporateentrepreneurship scale used by Zahra (1993).Innovativeness was measured by 5 items,strategic renewal was measured by 4 items, risktaking was measured by 3 items, new businessventuring was measured by 3 items andproactiveness was measured by 4 items.B.2- Knowledge Creation: This study adoptedthe work of Sabherwal and Becerra-FernandezData for the study were collected using aquestionnaire survey administrated during 2015.The samples in this study were owners and/ortop managers of Agricultural SMEs. To capturethe information from agricultural SMEs topmanagers or owners, all agricultural SMEsacross Tehran Province in Iran were included(N 1123 Agricultural SMEs which were listedon the Iranian Small and Medium IndustrialAdvisory Data Bank). According to the Bartlettet al. (2001) table, a sample size of 240 wasFigure 1. The Conceptual Research Model.265

[ DOR: 20.1001.1.16807073.2017.19.2.16.3 ][ Downloaded from jast.modares.ac.ir on 2022-05-09 ]Ahmadpour Daryani and Karimi(2003), for the knowledge creation measure.Socialization was measured by 4 items;composition was measured by 4 items;externalization was measured by 3 items; andinternalization was measured by 3 items.B.3- Learning Orientation: The measures oflearning orientation developed by Sinkula et al.(1997) and Calantone et al. (2002) were adoptedin this study. Shared vision was measured by 5items, open-mindedness was measured by 4items, and commitment to learning wasmeasured by 5 items.B.4- Firm Performance: The measure of Firmperformance developed by Murphy et al. (1996)was adopted in this study, which consists of threecomponents: Efficiency (3 items), growth (3items), and profit (3 items).For each of these scales, the participantsresponded to a 5-point Likert scale withresponses ranging from “strongly disagree” to“strongly agree”. Because the study wasconducted in Iran, the Iranian version wasdeveloped by translation and back-translation ofthe American version into the Iranian language.A copy of these measures is available from theauthor on request.D. Validation of MeasurementD.1. Content Validity: Before distributionand completion of the questionnaire, itscontent validity had been examined by eightmanagers with at least five years of experiencein the ASMEs and by eight nnaire was revised on the basis of theircomments.D.2. Convergent Validity: Convergentvalidity refers to the consistency that multipleitems exhibit in measuring the same construct.The factor loadings from the CFA provideevidence for convergent validity as all itemsload sufficiently high on the correspondingconstructs. We also evaluated convergentvalidity by using Average Variance Extracted(AVE), which should exceed 0.50 (Fornel andLarcker, 1981). As indicated in Table 3, allindicator factor loadings exceed the thresholdvalue of 0.50 suggested by Peterson (2000).AVE ranged from 0.71 to 0.76.D.3.DiscriminantValidity:Fordiscriminant validity, the square root of theAVE of each construct should be greater thanthe correlation shared between the constructand other constructs in the model and shouldbe at least 0.50 (Fornel and Larcker, 1981).Table 3 displays the correlations amongconstructs, with the square root of the AVE onthe diagonal. All constructs satisfactorily passthe test, as the square root of the AVE (on thediagonal) is larger than the cross correlationswith other constructs. The convergent anddiscriminant validities of the constructs of thestudy are thus acceptable (Table 3).C. Data AnalysisThe hypothesized causal relations wereinvestigated using AMOS20 graphic software, aStructural Equation Modelling (SEM) method. Astructural equation model has two components;the measurement model and the structural model.Of course, it should be noted that thebootstrapping method was used for the thirdhypothesis i.e. the mediation effect of knowledgecreation and learning orientation on therelationship between corporate entrepreneurshipand firm performance (Preacher and Hayes,2008). In this method, firstly, the total effectmodel or the direct effect of the independentvariable on the dependent variable is estimatedwithout the presence of the mediator variable; ifthis effect is significant, in the second step, themodel is estimated and examined with themediation effect that includes the mediatorvariable. In the event of a significant indirectpath in this model, the mediation hypothesis isconfirmed (Hayes, 2013).E. Reliability of MeasurementE.1. Internal Consistency Reliability: In orderto assess the internal consistency reliability,Cronbach’s alpha coefficient was used.Cronbach’s alpha values for the individualconstructs were higher than 0.7(Table 2).E.2.CompositeReliability:Themeasurement model was assessed with respectto Composite Reliability (CR). Fornell andLarcker (1981) have suggested that the CRvalues should be greater than 0.6. Studies havesuggested that 0.7 is an acceptable value for a266

Corporate Entrepreneurship and SMEs Performancereliable construct. The values of compositereliability for the four subscales given in Table3 were acceptable.Structural Equation ModelA structural equation model with AMOS20graphic software has two components; themeasurement model and the structural model.F. Model Goodness Of Fit (GOF)Measurement ModelIn assessing the models goodness of fit,many scholars suggested multiple criteria to beused, including CFA and structural model(Hair et al., 2010). The summary of thegoodness-of-fit indices used in this study ispresented in Table 4. Hair et al., (2006)suggest that using three or four fit indicesprovides adequate evidence of model fit.A confirmatory factor analysis usingAMOS20 was used to test the measurementmodel (i.e., to confirm the structure ofconstructs) (Hair et al., 2006). According tothe diagnostic indices (Table 4), themeasurement model demonstrated a fairlygood fit in that all of its model-fit indicessurpassed common acceptance levels.Furthermore, as shown in Table 5, allindicator loadings for the constructs werestatistically significant (P 0.01) and theirstandardized estimates ranged from 0.683 to0.794 for corporate entrepreneurship, 0.663–0.773 for Knowledge Creation, 0.683–0.757for Learning Orientation, and 0.614–0.729 forperformance. All of the indicators loadedsignificantly and substantively on theirhypothesized factors (p 0.01), therebysuggesting convergent validity (Bagozzi andYi, 1988). Also, measurement model couldshow the validity and reliability of theconstructs. The results of AVE showed that thevalue of this indicator for all latent variables inall measurement models was greater than 0.5(Table 5). In addition to these two criteria, theresults showed that the calculated CompositeReliability (CR) values for all the latentvariables were greater than 0.7 (Table 5). Thissuggests that the structural model represents agood fit. Thus, the path coefficients of theRESULTS[ Downloaded from jast.modares.ac.ir on 2022-05-09 ]Descriptive and Correlation StatisticsAmong the 255 responding SMEs, themajority were established between 1995-2005(41.6%) with employment size between 9 and49 employees (70%). Many (41.6%) of themwere skewed toward production and have100,000-50,000 annual sales turnover (Table1). The findings in Table 2 indicate that theASMEs focus on Strategic Renewal dimension(3.15 mean) more than the other dimensions ofcorporate entrepreneurship. The findings ofcorrelation matrix indicated that there issignificant and positive correlation amongperformance with all dimensions of corporateentrepreneurship, all dimensions of knowledgecreation and also all dimensions of learningorientation.Table 1. Profile of the respondents.[ DOR: 20.1001.1.16807073.2017.19.2.16.3 ]F%Enterprise year of establishmentBefore 19951995-2005After 2005Nature of 861056433.741.225.1267Enterprise size of employmentLess than 9 employeesBetween 9 and 49 employeesAbove 50 employeesEnterpriseannualsalesturnoverBelow 50000 50000-100000 Above 100000 F%461793018.170.111.8731216128.647.523.9

[ DOR: 20.1001.1.16807073.2017.19.2.16.3 ][ Downloaded from jast.modares.ac.ir on 2022-05-09 ]Ahmadpour Daryani and Karimi268

Corporate Entrepreneurship and SMEs PerformanceTable 4. Goodness-of-fit statistics.Single Fit IndicesRelative Chi-squareRecommended guideline 3Hair et al. (2006)CE2.53KC2.75LO2.56P1.97GFIRMRCFIIFIRMSEA 0.90 0.05 0.90 0.90 071Table 5. Measurement model results.Construct[ Downloaded from jast.modares.ac.ir on 2022-05-09 takingNew business venturingInnovativenessStrategic rnalizationOpen-mindednessCommitment to LearningShared 7580.6830.6140.7960.729Critical .7690.5270.8120.7580.5140.8210.813[ DOR: 20.1001.1.16807073.2017.19.2.16.3 ]Figure 2. Direct structural model CE and P with standardized estimates.structural model can be examined.corporate entrepreneurship and performance(Hypothesis 1) is highly significant (P 0.628,P 0.001) (Figure 2). The second Hypothesis(H2) proposed a significant direct relationshipbetween knowledge creation and performance.This hypothesis was supported (P 0.577, P 0.004).Structural ModelThe estimate of the standardized Pathcoefficient (P) indicates that the linkage between269

[ DOR: 20.1001.1.16807073.2017.19.2.16.3 ][ Downloaded from jast.modares.ac.ir on 2022-05-09 ]Ahmadpour Daryani and KarimiLearning orientation was found to bepositively related to the enterprise performance(P 0.616, P 0.001), providing support forHypothesis three (H3).This research aims at examining whetherknowledge creation and learning orientationplays a mediating role in the relationshipbetween corporate entrepreneurship andperformance. The obtained results from theimplementation of the Bootstrapping methodindicates that the sum of indirect effect ofcorporate entrepreneurship on performancethrough the variable of knowledge creation issignificant (ρ-value 0.000, β 0.387) and thusthe fourth hypothesis is confirmed (see Table 7).Of course, since the direct path between CE andperformance in the Mediation Effect Model ispositive and significant (ρ-value 0.003, β 0.450), knowledge creation partially mediates thepositive effect of corporate entrepreneurship onperformance (Pahlevan Sharif and Mahdavian,2015). The findings regarding mediating role ofknowledge creation in the relationship betweencorporate entrepreneurship and firm performancewere also supported by previous empiricalfindings. For instance, Simon (2011), Li et al.(2009) and Hitt et al, (2001) reported thatknowledge creation plays a mediating role in therelationship between corporate entrepreneurshipand performance.With regard to H5, corporate entrepreneurship,significantly affect performance via learningorientation. The obtained results from theimplementation of the Bootstrapping methodindicates that the sum of indirect effect ofcorporate entrepreneurship on performancethrough the variable of learning orientation issignificant (ρ-value 0.005, β 0.326) and, thus,the fifth hypothesis is confirmed (see Table 7).Of course, since the direct path between CE andperformance in the Mediation Effect Model ispositive and significant (ρ-value 0.001, β 0.548), learning orientation partially mediates thepositive effect of corporate entrepreneurship onperformance. The findings regarding themediating role of learning orientation in therelationship between corporate entrepreneurshipand firm performance was also supported byprevious empirical findings. For instance,Jimenez-Jimenez (2008), Calantone et al. (2002),and Baker and Sinkula (2002) reported themediating role of learning orientation in therelationship between variables and firmperformance.As shown in Tables 6 and 7, all pathcoefficients are significant at the 0.01 level in thestructural model. The results indicate that thehypothesized relationships are supported. Theexplanatory power of the structural model can beevaluated by examining the amount of variancein the dependent variable which can be explainedby the model. Squared multiple correlations (R2)was computed for the dependent variable (firmperformance) in a model. The criterion, R2 iscritical in evaluating a structural model. Basedon the results, CE explains about 40 percent ofthe variances of firm performance (Figure 2)

Corporate Entrepreneurship Corporate entrepreneurship is the main factor in enterprises success (Taylor, 2013). Antoncic and Hisrich (2001) state that corporate entrepreneurship is a process occurring inside of an enterprise which, besides its size, not only creates new business, but that also leads to more