Mediation Effect of Entrepreneurial Orientation in the Relationship between Social Capital and Performance of Local Poultry Business in the Rural Areas of Sistan and Baluchestan Province in Iran

Document Type : Original Article

Authors

1 Corresponding Author and PhD Graduate in Agricultural Extension, Faculty of Agricultural Economics and Development, University of Tehran, Karaj, Iran

2 M.Sc. Graduated of Entrepreneurship and Innovation in Agriculture, Faculty of Economics and Agricultural Development, University of Tehran, Karaj, Iran

3 ssistant Prof., Department of Agricultural Extension & Education, Faculty of Agricultural and Natural Resources, Higher Educational Complex of Saravan,Saravan, Sistan and Baluchestan

Abstract

Given the importance of performance as the main indicator of the success of businesses, it has always been of interest to researchers. In addition, social capital and entrepreneurial orientation are two important factors in predicting the performance of businesses. However, little is known about the mechanisms that benefit businesses from the interplay among these factors. Therefore, this study aimed at investigating the mediating effect of entrepreneurial orientation in the relationship between social capital and business performance. The statistical population of the study included the owners of local poultry business units in the rural areas of Sistan and Baluchestan province in Iran with 360 active units in 2018, out of which 189 units were selected by simple random sampling as the statistical sample using Krejcie and Morgan table. The validity of the questionnaire was confirmed as discriminant validity and convergent validity. Composite reliability measures showed satisfied reliability. The collected data was analyzed by structural equation modeling with partial least squares method (PLS-SEM). The study findings showed that the external network ties and social interaction had a positive and significant relationship with relationship quality; and also indicated that the proactiveness mediated the impact of relationship quality on the performance, innovativeness mediated the impact of relationship quality on financial performance, and risk-taking mediated the impact of relationship quality on non-financial performance of local poultry businesses.

Keywords


  • Adler, P.S. and Kwon, S.W. (2002). Social capital: prospects for a new concept. Academy of Management Review, 27(1): 17-40.‏
  • Akintimehin, O.O., Eniola, A.A., Alabi, O.J., Eluyela, D.F., Okere, W. and Ozordi, E. (2019). Social capital and its effect on business performance in the Nigeria informal sector. Heliyon, 5(7): e02024.
  • Alonso, A.D. and Alexander, N. (2017). Importance of acquiring knowledge through feedback in an emerging industry. Asia Pacific Journal of Marketing and Logistics, 29(2): 265-282.
  • Basco, R., Hernández-Perlines, F. and Rodríguez-García, M. (2020). The effect of entrepreneurial orientation on firm performance: a multigroup analysis comparing China, Mexico, and Spain. Journal of Business Research, 113: 409-421.
  • Baseri, B., Sadeghi, H. and Khaksar, Gh.R. (2010). Performance of producer cooperatives in Iran’s agriculture sector. Economic Research, 10(3): 1-24. (Persian).
  • Covin, J. G., & Slevin, D. P. (1991). A conceptual model of entrepreneurship as firm behavior. Entrepreneurship theory and practice16(1), 7-26.‏
  • Bayarçelik, E.B. and Özşahin, M. (2014). How entrepreneurial climate effects firm performance? Procedia-Social and Behavioral Sciences, 150: 823-833.‏
  • Chang, M.L., Cheng, C.F. and Wu, W.Y. (2012). How buyer-seller relationship quality influences adaptation and innovation by foreign MNCs’ subsidiaries. Industrial Marketing Management, 41(7): 1047-1057.‏
  • Chiva, R. and Alegre, J. (2009). Investment in design and firm performance: the mediating role of design management. Journal of Product Innovation Management, 26(4): 424-440.‏
  • Covin, J.G. and Lumpkin, G.T. (2011). Entrepreneurial orientation theory and research: reflections on a needed construct. Entrepreneurship Theory and Practice, 35(5): 855-872.‏
  • De Carolis, D.M. and Saparito, P. (2006). Social capital, cognition, and entrepreneurial opportunities: a theoretical framework. Entrepreneurship Theory and Practice, 30(1): 41-56.‏
  • De Clercq, D., Honig, B. and Martin, B. (2013). The roles of learning orientation and passion for work in the formation of entrepreneurial intention. International Small Business Journal, 31(6): 652-676.‏
  • Dess, G.G., Ireland, R.D., Zahra, S.A., Floyd, S.W., Janney, J.J. and Lane, P.J. (2003). Emerging issues in corporate entrepreneurship. Journal of Management, 29(3): 351-378.‏
  • Edmond, V.P. and Wiklund, J. (2010). The historic roots of entrepreneurial orientation research. In: Historical Foundations of Entrepreneurship Research, pp. 142-160. Edward Elgar Publishing Ltd..‏
  • Elnihewi, I., Fadzil, F.H. and Mohamed, R. (2014). The effect of institutional factors on the organizational performance through performance measures of commercial banks in Libya. Procedia-Social and Behavioral Sciences, 164: 635-640.‏
  • Florin, J., Lubatkin, M. and Schulze, W. (2003). A social capital model of high-growth ventures. Academy of Management Journal, 46(3): 374-384.‏
  • George, B.A. and Marino, L. (2011). The epistemology of entrepreneurial orientation: conceptual formation, modeling, and operationalization. Entrepreneurship Theory and Practice, 35(5): 989-1024.‏
  • Gupta, V.K. and Gupta, A. (2015). Relationship between entrepreneurial orientation and firm performance in large organizations over time. Journal of International Entrepreneurship, 13(1): 7-27.
  • Hitt, M.A., Lee, H.U. and Yucel, E. (2002). The importance of social capital to the management of multinational enterprises: relational networks among Asian and Western firms. Asia Pacific Journal of Management, 19(2-3): 353-372.‏
  • Khoshnodifar, Z., Sokhtanloo, M. and Malekmohammadi, I. (2011). The effect of the performance of Bank Keshavarzi and Agriculture-Jahad Organization on the success rate of small and medium-sized entrepreneurial businesses in the agricultural sector. Journal of Agricultural Economics and Development, 18(72): 139-160. (Persian)
  • Krauss, S.I., Frese, M., Friedrich, C. and Unger, J.M. (2005). Entrepreneurial orientation: a psychological model of success among southern African small business owners. European Journal of Work and Organizational Psychology, 14(3): 315-344.‏
  • Langkamp Bolton, D. and Lane, M.D. (2012). Individual entrepreneurial orientation: development of a measurement instrument. Education + Training, 54(2/3): 219-233.
  • Larson, A. (1992). Network dyads in entrepreneurial settings: a study of the governance of exchange relationships. Administrative Science Quarterly, 76-104.‏
  • Lee, C. and Hallak, R. (2020). Investigating the effects of offline and online social capital on tourism SME performance: a mixed-methods study of New Zealand entrepreneurs. Tourism Management, 80: 104-128.
  • Lee, J., Park, S.Y., Baek, I. and Lee, C.S. (2008). The impact of the brand management system on brand performance in B–B and B–C environments. Industrial Marketing Management, 37(7): 848-855.‏
  • Lindsay, V., Ashill, N., Roxas, B. and Victorio, A. (2014). Entrepreneurial orientation and performance of microenterprises in an emerging economy. Journal of Strategic Marketing, 22(7): 631-656.‏
  • Lovas, B. and Ghoshal, S. (2000). Strategy as guided evolution. Strategic Management Journal, 21(9): 875-896.‏
  • Lu, H., Wang, B., Wang, H. and Zhao, T. (2020). Does social capital matter for peer-to-peer-lending? Empirical evidence. Pacific-Basin Finance Journal, 101338.‏
  • McEvily, B., Perrone, V. and Zaheer, A. (2003). Trust as an organizing principle. Organization Science, 14(1): 91-103.‏
  • Nguyen, L.T., An, J., Ngo, L.V. and Hau, L.N. (2020). Transforming social capital into performance via entrepreneurial orientation. Australasian Marketing Journal (AMJ), 28(4): 209-217.‏
  • Nguyen, T.V., Bruton, G.D. and Nguyen, B.T. (2016). Competitor concentration, networking, and customer acceptance: the case of small firms in Vietnam. Asia Pacific Journal of Marketing and Logistics, 28(5): 964-983‏
  • Panayides, P.M. and Lun, Y.V. (2009). The impact of trust on innovativeness and supply chain performance. International Journal of Production Economics, 122(1): 35-46.‏
  • Podolny, J.M. (2001). Networks as the pipes and prisms of the market. American Journal of Sociology, 107(1): 33-60.‏
  • Poppo, L., Zhou, K.Z. and Ryu, S. (2008). Alternative origins to interorganizational trust: an interdependence perspective on the shadow of the past and the shadow of the future. Organization Science, 19(1): 39-55.‏
  • Rao, R.S., Chandy, R.K. and Prabhu, J.C. (2008). The fruits of legitimacy: Why some new ventures gain more from innovation than others? Journal of Marketing, 72(4): 58-75.‏
  • Rauch, A., Wiklund, J., Lumpkin, G.T. and Frese, M. (2009). Entrepreneurial orientation and business performance: an assessment of past research and suggestions for the future. Entrepreneurship Theory and Practice, 33(3): 761-787.‏
  • Rezaei, R., Mangeli, N. and Safa, L. (2017). Mediation effect of entrepreneurial marketing in the relationship between entrepreneurial orientation and performance of greenhouse businesses in Jiroft County. Iranian Agricultural Extension and Education Journal, 13(1): 195-210.‏ (Persian)
  • Rosenbusch, N., Rauch, A. and Bausch, A. (2013). The mediating role of entrepreneurial orientation in the task environment–performance relationship: a meta-analysis. Journal of Management, 39(3): 633-659.‏
  • Schiele, H., Ellis, S.C., Eßig, M., Henke, J.W. and Kull, T.J. (2015). Managing supplier satisfaction: social capital and resource dependence frameworks. Australasian Marketing Journal (AMJ), 23(2): 132-138.‏
  • Shane, S. and Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25(1): 217-226.‏
  • Sheng, S., Zhou, K.Z. and Li, J.J. (2011). The effects of business and political ties on firm performance: evidence from China. Journal of Marketing, 75(1): 1-15.‏
  • Stam, W. and Elfring, T. (2008). Entrepreneurial orientation and new venture performance: the moderating role of intra-and extra-industry social capital. Academy of Management Journal, 51(1): 97-111.‏
  • Tajeddini, K., Martin, E. and Ali, A. (2020). Enhancing hospitality business performance: the role of entrepreneurial orientation and networking ties in a dynamic environment. International Journal of Hospitality Management, 90: 102605.
  • Venkatraman, N. and Ramanujam, V. (1986). Measurement of business performance in strategy research: a comparison of approaches. Academy of Management Review, 11(4): 801-814.‏
  • Wales, W.J., Parida, V. and Patel, P.C. (2013). Too much of a good thing? Absorptive capacity, firm performance, and the moderating role of entrepreneurial orientation. Strategic Management Journal, 34(5): 622-633.‏
  • Wiklund, J., Patzelt, H. and Shepherd, D.A. (2009). Building an integrative model of small business growth. Small Business Economics, 32(4): 351-374.‏
  • Yli-Renko, H., Autio, E. and Sapienza, H.J. (2001). Social capital, knowledge acquisition, and knowledge exploitation in young technology‐based firms. Strategic Management Journal, 22(6‐7): 587-613.‏