Does firm performance increase with risk-taking behavior under information technological turbulence?

Abstract

Purpose This paper aims to contribute to the risk management studies in small and medium enterprises (SMEs) by examining the complicated relationship between risk-taking behavior and firm performance. Design/methodology/approach The study conducted a survey of the Indonesian SME owner-managers and used partial least square structural equation modeling to examine the mediating effect of pricing capability and moderating effects of information technological turbulence. Findings The results do not only confirm the positive impact of risk-taking behavior on firm performance but also identify that impact of risk-taking behavior on firm performance is more effective at the low information technological turbulence than at the high one. Research limitations/implications This study relied on information from the owner-managers in SMEs, which may bias against the perspective of their employees and the business partners. Originality/value This study advances the risk-taking behavior research in SMEs context by introducing the effect of pricing capability and information technological turbulence.