Farmers’ strategic responses to competitive intensity and the impact on perceived performance

Abstract

AbstractA large percentage of small- and medium-sized farms have ceased operations in the last 2 decades in part due to their inability to respond to increased competitive intensity. Consequently, the strategic responses farmers adopt to competitive intensity are important to understand as they may influence performance and ultimately their survival. Based on a sample of 388 randomly selected farmers in Sweden and using structural equation modelling, we find that as perceptions of competitive intensity increase, so does their market orientation (MO) and lean production orientation (LPO), but not entrepreneurial orientation (EO). Moreover, we find that farmers who indicate greater (in order of importance) MO and LPO report better overall performance, while increased EO surprisingly contributes negatively to performance. Our findings contribute to the limited body of research on strategic responses to competitive intensity in the agricultural sector and subsequent payoff on farm performance.