The behavioural gap between entrepreneurial SME’s and high growth: evidence from Canada

Entrepreneurial orientation (EO) describes a firm’s attitude towards entrepreneurial activity; however, it does not measure the specific behaviors likely to contribute to high growth. This research applies the resource-based and dynamic capabilities views to propose a mediation model between EO and high growth. The theoretical framework is drawn from the strategic management and entrepreneurship literature. Competing models are tested against a sample of Canadian SMEs to validate the proposed explanation for the presence of high-growth firms among the population. The study finds that the relationship between EO and high growth is perfectly mediated by innovation performance, a behavioral measure of innovation. This research contributes to firm growth theory while providing further insight into the drivers of high growth useful to policy makers endeavoring to stimulate, and overcome barriers to, entrepreneurship and innovation. Determining the factors associated with firm growth can have implications for management as well as policy. If a firm’s goal is to grow it must be able to focus its limited resources using a strategy appropriate for growth.