The nonlinear relationship between entrepreneurial orientation and sales growth : The moderating effects of slack resources and absorptive capacity

• The present study aims to advance the understanding of the complex and context-dependent relationship between entrepreneurial orientation (EO) and firm sales growth by investigating the linearity assumption and assessing the moderating role of financial slack resources and absorptive capacity in the mature industry context. Departing from some recent EO studies, the analysis based on a dataset of 86 companies operating in the food manufacturing industry suggests that EO has a nonlinear relationship with sales growth. Moreover, the results suggest that in companies with high levels of slack resources, an increase in EO from low to moderate levels accelerates sales growth; however, to capitalize on the sales growth potential of high EO, a high absorptive capacity is also required. Thus, the present study demonstrates a nonlinear effect of EO on sales growth, and particularly from moderate to high levels of EO, the positive moderating effects of absorptive capacity and slack resources.

Subject headings

TEKNIK OCH TEKNOLOGIER  -- Annan teknik -- Övrig annan teknik (hsv//swe)

ENGINEERING AND TECHNOLOGY  -- Other Engineering and Technologies -- Other Engineering and Technologies not elsewhere specified (hsv//eng)

Keyword

Entrepreneurial orientation (EO)

Absorptive capacity (ACAP)

Sales growth

Organizational agility

Strategic learning

Nonlinear model

Entreprenörskap och innovation

Entrepreneurship and Innovation

Publication and Content Type

ref (subject category)

art (subject category)