Effect of External Environment on Entrepreneurial Orientation and Business Performance Relationship

The effect of entrepreneurial orientation on business performance has extensively been researched by different researchers over the last two decades showing inconsistent results. It was suggested that the mixed results between EO and business performance were due to not considering the external environmental factors. This study adopts the survey approach to investigate the moderating role of external environment on the relationship between EO and business performance of SMEs in Pakistan. The research surveyed samples of 220 SMEs and used SPSS for analysis and testing the hypotheses. The results show that EO is positively and significantly affects the business performance. It demonstrates that EO leads to superior performance. The findings of hierarchical regression show the significant moderating effect of EE on the relationship between EO and BP.