Poor resource capital of micro-entrepreneurs: the mediating role of entrepreneurial orientation

Abstract

Purpose Understanding the micro-start-up resources and its relationships with entrepreneurial orientation and performance is unique because it operates a business in a poor resource setting. However, poor resource settings of micro-start-up are not adequately examined into the literature in relation to entrepreneurial orientation and performance. Therefore, grounded on resource-based view, this paper aims to attempt to examine the relationships between resource capital, entrepreneurial orientation and performance in a developing country context. Design/methodology/approach To establish this, the authors conducted a survey among 180 micro-entrepreneurs from Bangladesh and analyzed the data using the partial least squares structural equation modeling (PLS-SEM) approach. Findings The results demonstrate the mediating role of entrepreneurial orientation on the relationship between human and financial resources and performance, while having partial mediating influence between social resource and performance, therefore indicating the importance of resources for determining business outcomes for micro-entrepreneurs. Research limitations/implications These results extend theoretical explanations of micro-entrepreneurship within the poor resource setting context. The findings have implications for identifying micro-firms likely to succeed for the purpose of strategic allocation of resources and supports; they also provide future research avenues. Originality/value To the best of the authors’ knowledge, no previous study has established that entrepreneurial orientation plays a critical and mediating role between resource capital and micro-firm performance in a poor resource setting.