Entrepreneurial orientation and new product development performance in SMEs: The mediating role of business model innovation

Abstract

Abstract In the current business context, entrepreneurial orientation (EO) has been highlighted as key to improving firm performance. Despite the overall positive evidence on the association between EO and firm performance, scholars have stressed the importance of taking into account and properly managing intermediate capabilities. The present study analyses the link between EO and New Product Development (NPD) performance, considering Business Model Innovation (BMI) as a mediating variable. A sample of 400 Spanish SMEs is used to test the proposed research model through structural equation modelling and partial least squares analyses. Results reveal that EO contributes to BMI and NPD performance. Moreover, BMI is found to have a partial mediating role between EO and NPD performance. This study makes a novel contribution to the EO and BMI literatures as it finds evidence that business model innovation is an effective way to funnel the firm s entrepreneurial orientation into its innovation processes and to increase the success of new product development. Some suggestions for managers and future lines of research are proposed.