The Impact of Entrepreneurial Orientation on the growth of SMEs in Sri Lanka

Abstract

Using growth of Small and Medium-size Enterprises (SME‟s) we investigated the relationship between the Entrepreneurial Orientation (EO) and growth of SME‟s in Sri Lanka. As EO has three dimensions, the study also aims to investigate to what extent these dimensions affect the growth. It was mainly hypothesized that higher entrepreneurial orientation leads to high venture growth. Venture growth was measured by sales growth and employment growth of firms. Results confirmed that EO has an impact to the venture growth of SMEs. Further, it was found that innovativeness and risk taking propensity have a positive impact on venture growth. However, results indicate that proactivness has no significant impact on the venture growth. The results of the study have important implications to the existing entrepreneurs, potential entrepreneurs, investors, researchers, consultants and policy makers.