Entrepreneurial orientation and performance of SMEs in the services industry

The purpose of this paper is to examine both the sources of competitiveness of small and medium- sized enterprises (SMEs) in the services industry measured by their capability to grow, and the relative importance of each of these sources. More specifically, the resources and capabilities of Spanish SMEs in the services industry that may become sources of competitive advantage are analysed.

In order to achieve this objective, this paper is organized as follows. First, a concise overview of prior research on determinants of performance of SMES is provided, outlining the role of factors regarding resources and capabilities. Second, a set of lineal regression models are performed to test the hypothesis research. In line with several previous studies, competitive success and performance of the company are approached through the recent evolution of firms in terms of employment, turnover and productive investment. The data set comes from a survey on Spanish SMEs operating in the services industry that was carried out between the end of 2010 and the beginning of 2011.

The findings reveal that entrepreneur characteristics, firm features and managerial attributes have significant effect on the business performance. The results from the empirical analysis indicate that competitive success of the Spanish SMEs in the service industry is conditioned by macroeconomic and social factors related to the general business environment and especially by business factors concerning the entrepreneurial orientation of the firm, these findings are consistent with those of earlier research conducted at both an international level a national level.

The fundamental contribution of SMEs to the overall performance of the economy constitutes a crucial motive for researchers to investigate and examine the key success factors behind these enterprises. This issue has been analysed exhaustively for the manufactured goods industry, but has scarcely been addressed for the services industry. Thus, further research is needed to clarify the variables explaining survival and success for services SMEs. Furthermore, since this research is focused on the microeconomic level, by considering the firm as the unit of analysis, it contributes towards complementing previous research on this topic that has been conducted from a macroeconomic approach. Thus it attempts to provide certain empirical evidences for support the traditional academic debate between economic and administrative disciplines concerning the appropriate unit of analysis for the understanding and explanation of businesses competitiveness.