Entrepreneurial Orientation, Perceived Competitive Threat, and Competitive Strategy Among SMEs in an Emerging-Economy Capital
RSN-PCC Working Paper 18–005
22 Pages Posted: 30 Jan 2019 Last revised: 27 Apr 2021
Date Written: December 1, 2018
Entrepreneurial business owners and managers take risks, innovate, and compete aggressively. We use logistic regression to investigate the impact of entrepreneurial orientation (EO) and perceived threat of new competition on three competitive strategies — cost reduction, marketing, and product innovation — adopted by SMEs in Metro Manila, Philippines. Our findings show entrepreneurial SMEs that perceive competitive threat to be more likely than non-entrepreneurial and non-threatened SMEs to pursue all three competitive strategies. Market power and predatory players also impact competitive strategy. Our results underscore the importance of a stable and predictable business environment and institutions that foster healthy competition and encourage growth-oriented strategies and innovation among SMEs.
Keywords: Entrepreneurial Orientation, Competitive Threat, Competitive Strategy, Cost Reduction, Marketing, Innovation, Small and Medium-Sized Enterprises, Philippines
JEL Classification: L26, L11, O31
Suggested Citation: Suggested Citation