The Effects of Institutional Supports on Farm Entrepreneurial Performance: Exploring the Mediating Role of Entrepreneurial Orientation

Abstract

Despite the numerous contributions from farm entrepreneurship to economic development, including food security and rural poverty alleviation, most farm enterprises often fail due to institutional challenges in developing countries. Based on this perspective, the study investigates the effect of different institutional contexts, such as regulatory, normative, and cognitive institutions, on the performance of farm enterprises. The study further evaluates the mediating role of farm Entrepreneurial Orientation (EO) in the Institution-Venture performance relationship. We employ the PLS-SEM technique to analyze data collected from 371 farm enterprises in Ghana. The findings from the study emphasize that Regulatory, Normative, and Cognitive institutions have positive and significant indirect effects on farm business performance through the partial mediating role of EO. While regulatory and normative institutions have a negative direct effect on farm venture performance, the results show that cognitive institutions have positive and significant effects on farm business performance. The study confirms the positive and significant impacts of institutions on farm-level EO. The findings imply that farm entrepreneurship can be improved by strengthening regulatory, normative, and cognitive institutions to offer conducive support for farm businesses in developing countries.