Entrepreneurial Orientation, Market Orientation, and MSMEs Performance: The Moderating Role of Market Turbulence
Ni Nyoman Sri Rahayu Damayanti (a), Dian Agustia (b*)

a) Department of Accounting, Faculty of Economics and Business, Airlangga University, Surabaya, Indonesia
Department of Accounting, Faculty of Economics and Business, Warmadewa University, Bali, Indonesia
b*)Department of Accounting, Faculty of Economics and Business, Airlangga University, Surabaya, Indonesia
*dian.agustia[at]feb.unair.ac.id
corresponding author

Abstract

This study aims to examine the role of entrepreneurial orientation and market orientation on MSME^s financial performance with market turbulence as the moderator variable. This study used a quantitative approach with a survey design. The questionnaire was sent through online and offline. There were 215 MSMEs in Bali Province Indonesia who participated in this study. The collected data was further analyzed through PLS-SEM. The results found that entrepreneurial orientation and market orientation had a positive effect on MSME^s financial performance. Market turbulence positively moderates the relationship between entrepreneurial orientation and market orientation on MSME^s financial performance. The originality of this study is providing a comprehensive conceptual model by proposing market turbulence as a moderating construct, which has not previously been investigated. In addition, this study was conducted on MSMEs in developing countries which has different characteristics from large enterprises. The implication of this study is to provide understanding to managers and owners of MSMEs that entrepreneurial and market orientation can improve MSME^s financial performance. Both orientations will be more effective in improving MSMEs^ financial performance when MSMEs are in under market turbulence environment. This is an important consideration for managers and owners in making decisions regarding strategies that can improve their competitive advantage of MSMEs which can further improve their financial performance. The government also needs to support MSMEs by providing training and activities in which MSMEs can participate, to improve their understanding of market and business developments.

Keywords: Entrepreneurial orientation, market orientation, market turbulence, financial performance, MSME.

Topic: Entrepreneurship and small medium entreprises