Author:
Tantawy Ahmed Adel,Elaasi Sherif,Elshawadfy Mohamed
Abstract
Purpose
Evidence suggests that corporate entrepreneurship (CE), namely, innovativeness, risk-taking and corporate venturing, enhances a firm’s performance. However, the study of CE in developing markets – particularly in Egypt – is still new and undeveloped. The literature stresses the importance of incorporating environmental factors into the study of CE. Therefore, the purpose of this study is to examine the relationship between CE, environmental jolts (unexpected abrupt environmental events such as the Arab Spring) and the firm’s financial performance. Based on the periods before and after the series of anti-government protests known as the Arab Spring, this paper argues that after an environmental jolt, CE will negatively affect financial performance.
Design/methodology/approach
This study analyzes and correlates CE, environmental jolts and firm performance in Egypt for a period over 10 years (from 2007 through 2016) using a sample of 94 manufacturing firms listed on the Egyptian Stock Exchange. Data were manually collected through archival/secondary data using financial and accounting information from the annual reports released by the firms. These reports were downloaded from the firms’ webpages and the Egyptian Exchange website.
Findings
The main results of this paper indicate that environmental factors play a role in the effect of CE on firm performance. Using the 2011 Arab Spring as a quasi-natural experiment, this paper finds that CE’s effect on firm performance is higher pre-jolt and lower post-jolt.
Practical implications
This study provides useful implications for managers and practitioners. Firms need to find new ways of allocating their resources to help provide innovative products and to have a competitive advantage. Although innovation, risk-taking and corporate venturing may have a delayed impact on a firm’s financial performance, managers should evaluate the implications and the success of CE activities in the long-term, not from a short-term perspective.
Originality/value
Building upon the existing literature, this is the first paper to investigate the effect of CE on a firm’s financial performance in Egypt during the Arab Spring. The manufacturing firms listed on the Egyptian Exchange were analyzed in a quasi-natural experiment, taking into account the moderating role of an environmental jolt, namely, the Arab Spring.
Subject
Economics, Econometrics and Finance (miscellaneous),Strategy and Management,Business and International Management
Reference78 articles.
1. The impact of Arab spring on stock market performance;British Journal of Economics, Management and Trade,2013
2. Entrepreneurial marketing strategy, institutional environment, and business performance of SMEs in Egypt;Journal of Entrepreneurship in Emerging Economies,2020
3. Analysis of corporate entrepreneurship in public R&D institutions;Sustainability,2018
4. Linking intrapreneurship activities to multidimensional firm performance in Turkish manufacturing firms: an empirical study;International Entrepreneurship and Management Journal,2012
5. Financial performance impacts of corporate entrepreneurship in emerging markets: a case of Turkey;European Journal of Economics, Finance and Administrative Sciences,2008
Cited by
2 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献