The Mediating Role of Research and Development Performance in the Relationship Between Entrepreneurial Orientation and Firm Performance in Arbegona, Sidama
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Date
2025-05-03
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A.A.U
Abstract
This study investigates the mediating role of research and development (R&D) performance in the
relationship between entrepreneurial orientation (EO) and overall firm performance.
Entrepreneurial orientation is conceptualized through three key dimensions: innovativeness,
proactiveness, and risk -taking. While past studies have often linked EO to enhanced firm
performance, this research proposes that R&D performance is a central internal capability that
translates entrepreneurial orientation into tangible business outcomes. The study aims to examine
the individual effects of EO dimensions on R&D performance and subsequently assess whether
R&D performance significantly contributes to overall firm performance. A quantitative approach
was employed using data collected from 237 MSMEs operating in Arbegona woreda, Sidama
region. A 7-point likert scale questionnaire was used to collect data from respondents. Mean and
standard deviation were used to present the result of respondents’ level of agreement to the study
variable and correlation and regression analysis were conducted to identify the significant factors
that affect firm performance in addition, descriptive statistics was also used to present the result.
This offers strong evidence that entrepreneurial orientation comprising innovation, proactivity, an d
risk-taking plays a key role in driving the performance of MSMEs in Arbegona, Sidama. Each
dimension of entrepreneurial orientation showed a strong, statistically significant relationship with
firm performance. The research also shows R&D performance as a driver of firm performance.
Finally, the study also revealed a significant mediating role for R&D performance, especially on
innovation.