Entrepreneurial orientation and farm business performance: The moderating role of on-farm diversification and location
This study advances research on entrepreneurial orientation (EO) in the farming sector by examining how the configuration of on-farm diversification and location shapes the relationship between EO and farm business performance (archival financial performance and self-reported non-financial performance). Data were collected from 400 farms included in the Norwegian Farm Business Survey. The research hypotheses were tested using hierarchical moderated regression analysis.
As hypothesized, a positive relationship was found between EO and non-financial performance. Other hypotheses were not confirmed. Surprisingly, EO showed a negative relationship with financial performance. The interactive effect of EO and on-farm diversification on financial performance was negative. Configurations of EO, diversification and location did not account for performance differences among farms.
Overall, these findings suggest that, rather than enhancing EO, farm business performance might be improved by a more inwardly focused orientation towards efficient production by increasing managerial ability.