The objective of the study was to examine the effect of entrepreneurs’ risk-taking propensity on firm performance and the moderating role of managerial network ties on this relationship in a sub-Saharan economy. This theoretically derived research model is empirically validated using survey data from 298 small and medium-sized enterprises (SMEs) in Ghana. The study’s empirical findings are that high levels of entrepreneurs’ risk-taking propensity enhance firm performance. This relationship is amplified when entrepreneurs cultivate stronger business, political and community network ties.
AchtenhagenL., NaldiL., & MelinL. (2010). ‘Business growth’—do practitioners and scholars really talk about the same thing?Entrepreneurship: Theory and Practice, 34(2), 289–316.
2.
AcquaahM. (2007). Managerial social capital, strategic orientation and organisational performance in an emerging economy. Strategic Management Journal, 28(12), 1235–1255.
3.
AcquaahM., & EshunJ.P. (2010). A longitudinal analysis of the moderated effects of networking relationships on organisational performance in a sub-Saharan African economy. Human Relations, 63(5), 667–700.
4.
AdomakoS., & DansoA. (2014). Regulatory environment, environmental dynamism, political ties, and performance: Study of entrepreneurial firms in a developing economy. Journal of Small Business and Enterprise Development, 21(2), 212–230.
5.
AikenL., & WestS. (1991). Multiple regression testing and interpreting interactions. Newbury Park, CA: SAGE Publications.
6.
BagozziR.P., & PhilipsL.W. (1982). Representing and testing organisational theories: A holistic construal. Administrative Science Quarterly, 27(3), 459–490.
7.
BakerW.E., & SinkulaJ.M. (2009). The complementary effects of market orientation and entrepreneurial orientation on profitability in small businesses. Journal of Small Business Management, 47(4), 443–464.
8.
BegleyT. M., and BoydD. P. (1987). Psychological characteristics associated with performance in entrepreneurial firms and smaller businesses. Journal of Business Venturing, 2(1), 79–93.
9.
BosoN., StoryV.M., & CadoganJ.W. (2013). Entrepreneurial orientation, market orientation, network ties, and performance: Study of entrepreneurial firms in a developing economy. Journal of Business Venturing, 28(6), 708–727.
10.
BrockhausR.H. (1980). Risk taking propensity of entrepreneurs. Academy of Management Journal, 30(3), 509–520.
11.
BromileyP., & CurleyS. (1992). Individual differences in risk taking. In YatesJ. (Ed.), Risk taking behaviour (pp. 87–132). New York, NY: Wiley.
12.
BrutonG.D., AhlstromD., & OblojK. (2008). Entrepreneurship in emerging economies: Where are we today and where should the research go in the future. Entrepreneurship Theory and Practice, 32(1), 1–14.
13.
BurtR. S., GabbayS. M., HoltG., and MoranP. (1994). Contingent organization as a network theory: The culture performance contingency function. Acta Sociologica, 37(4), 345–370.
14.
BurtR.S. (1997). The contingent value of social capital. Administrative Science Quarterly, 42(2), 339–365.
15.
BusenitzL.W., & BarneyJ.B. (1997). Differences between entrepreneurs and managers in large organizations: Biases and heuristics in strategic decision-making. Journal of Business Venturing, 12(1), 9–30.
16.
CadoganJ.W., CuiC.C., MorganR.E., & StoryV.M. (2006). Factors facilitating and impeding the development of export market-oriented behaviour: A study of Hong Kong manufacturing exporters. Industrial Marketing Management, 35(5), 634–647.
17.
CarlandJ.W., HoyF., BoultonW.R., & CarlandJ.A. (1984). Differentiating entrepreneurs from small business owners: A conceptualization. Academy of Management Review, 9(2), 354–359.
18.
ChildJ., & TseD.K. (2001). China’s transition and its implications for international business. Journal of International Business Studies, 32(1), 5–21.
19.
CooperA.C., WooC.Y., & DunkelbergW.C. (1988). Entrepreneurs’ perceived chances for success. Journal of Business Venturing, 3(2), 97–108.
20.
CovinJ.G., & SlevinD.P. (1989). Strategic management of small firms in hostile and benign environments. Strategic Management Journal, 10(1), 75–87.
21.
CressyR. (2006). Why do most firms die young?Small Business Economics, 26(2), 103–116.
22.
DawsonJ.F., & RichterA.W. (2006). Probing three way interactions in moderated regression: Development and application of a slope difference test. Journal of Applied Psychology, 91(4), 917–926.
23.
DelmarF. (1994). The risk management of the entrepreneur: An economic-psychological perspective. Journal of Enterprising Culture, 2(2), 735–751.
24.
DessG.G., & RobinsonR.B., Jr. (1984). Measuring organisational performance in the absence of objective measures: The case of the privately-held firm and conglomerate business unit. Strategic Management Journal, 5(3), 265–273.
25.
ForlaniD., & MullinsJ.W. (2000). Perceived risks and choices in entrepreneurs’ new venture decisions. Journal of Business Venturing, 15(4), 305–322.
26.
FornellC., & LarckerD.F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50.
27.
GartnerW.B. (1990). What are we talking about when we talk about entrepreneurship?Journal of Business Venturing, 5(1), 15–28.
28.
GeletkanyczM.A., & HambrickD.C. (1997). The external ties of top executives: Implications for strategic choice and performance. Administrative Science Quarterly, 42(4), 654–681.
29.
GoedhuysM., & SleuwaegenL. (2010). High-growth entrepreneurial firms in Africa: A quantile regression approach. Small Business Economics, 34(1), 31–51.
30.
Gomez-MejiaL.R., & BalkinD.B. (1989). Effectiveness of individual and aggregate compensation strategies. Industrial Relations, 28(3), 431–445.
31.
GranovetterM. (1985). Economic action and social structure: The problem of embeddedness. American Journal of Sociology, 91(3), 481–510.
32.
GranovetterM. (2005). The impact of social structure on economic outcomes. The Journal of Economic Perspectives, 19(1), 33–50.
33.
HairJ.F., BlackW.C., BabinB.J., AndersonR.E., & TathamR.L. (2006). Multivariate data analysis (6th ed.). Upper Saddle River, NJ: Pearson.
34.
HmieleskiK.M., & BaronR.A. (2009). Entrepreneurs’ optimism and new venture performance: A social cognitive perspective. Academy of Management Journal, 52(3), 473–488.
35.
HoskissonR.E., EdenL., LauC.M., & WrightM. (2000). Strategy in emerging economies. Academy of Management Journal, 43(3), 249–267.
36.
HuckS.W. (2000). Reading statistics and research (3rd ed.). New York, NY: Longman.
37.
JacksonD.N., HouranyT., & VidmarN.J. (1972). A four-dimensional interpretation of risk taking. Journal of Personality, 4(3), 483–501.
38.
JanneyJ.J., & DessG.G. (2006). The risk concept for entrepreneurs reconsidered: New challenges to the conventional wisdom. Journal of Business Venturing, 21(3), 385–400.
39.
JulianS.D., & Ofori-DankwaJ.C. (2013). Financial resource availability and corporate social responsibility expenditures in a sub-Saharan economy: The institutional difference hypothesis. Strategic Management Journal, 34(11), 1314–1330.
40.
KahnemanD., & TverskyA. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263–292.
41.
KhavulS., Pérez-NordtvedtL., & WoodL. (2010). Organizational entrainment and international new ventures from emerging markets. Journal of Business Venturing, 25(1), 104–119.
42.
KrishnanS., & TeoT.S.H. (2012). Moderating effects of governance on information infrastructure and e-government development. Journal of the American Society for Information Science and Technology, 63(10), 1929–1946.
43.
LammersJ., WillebrandsD., & HartogJ. (2010). Risk attitude and profits among small enterprises in Nigeria(Tinbergen Institute Discussion Paper: TI 2010-053/3). Amsterdam, The Netherlands: Tinbergen Institute.
44.
LaumannE.O., GalaskiewiczJ., & MarsdenP.V. (1978). Community structure as inter-organizational linkages. Annual Review of Sociology, 4(1), 455–484.
45.
LawrenceP., & LorschJ. (1967). Differentiation and integration in complex organizations. Administrative Science Quarterly, 12(1), 1–47.
46.
LiH., & ZhangY. (2007). The role of managers’ political networking and functional experience in new venture performance: Evidence from China’s transitional economy. Strategic Management Journal, 28(8), 791–804.
47.
LiJ.J., & ZhouK.Z. (2010). How foreign firms achieve competitive advantage in the Chinese emerging economy: Managerial ties and market orientation. Journal of Business Research, 63(8), 856–862.
48.
LilesP.R. (1974). New business ventures and entrepreneur. Homewood, III: Richard D. Irwin, Inc.
49.
LittleT.D., BovairdJ.A., & WidamanK.F. (2006). On the merits of orthogonalizing powered and product terms: Implications for modeling latent variable interactions. Structural Equation Modeling, 13, 479–519.
50.
LondonT., & HartS. (2004). Reinventing strategies for emerging markets: Beyond the transnational model. Journal of International Business Studies, 35(5), 350–370.
51.
LauC.M., & BruttonG.D. (2011). Strategic orientations and strategies of high technology ventures in two transition economies. Journal of World Business, 46(3), 371–380.
52.
MarchJ.G., & ShapiraZ. (1987). Managerial perspective on risks and risks taking. Management Science, 33(11), 1404–1418.
53.
MastersR., GibbsM., & MeierR. (1988). Risk-taking propensity of American and Indian small business managers: A comparative study. In RobertsG.B., LasherH. & MalicheE. (Eds), Entrepreneurship: New direction for a global economy (pp. 206–211). The Proceedings of the 33rd World Conference of the International Council for Small Business, Boston, MA.
54.
MorganN.A., KatsikeasC.S., & VorhiesD.W. (2012). Export marketing strategy implementation, export marketing capabilities and export venture performance. Journal of the Academy of Marketing Science, 40(2), 271–289.
55.
MurphyG.B., TrailerJ.W., & HillR.C. (1996). Measuring performance in entrepreneurship research. Journal of Business Research, 36(1), 15−23.
56.
NunnallyJ.C., & BernsteinI.H. (1994). Psychometric theory (3rd ed.). New York, NY: McGraw-Hill.
57.
OppenheimA.N. (1966). Questionnaire design and attitude measurement. London: Heinemann.
58.
PalmerM. (1971). The application of psychological testing to entrepreneurial potential. California Management Review, 13(30), 38–57.
59.
ParkS.H., & LuoY. (2001). Guanxi and organisational dynamics: Organisational networking in Chinese firms. Strategic Management Journal, 22(5), 455–477.
60.
PattilloC., & SöderbomM. (2000). Managerial risk attitudes and firm performance in Ghanaian manufacturing: An empirical analysis based on experimental data(IMF Working Paper Series/2000-17). Washington, D.C, USA: International Monetary Fund.
61.
PengM.W., & LuoY. (2000). Managerial ties and firm performance in a transition economy: The nature of a micro–macro link. Academy of Management Journal, 43(3), 486–501.
62.
PlaxT., & RosenfeldL. (1976). Correlates of risky decision making. Journal of Personality Assessment, 40(4), 413–418.
63.
PodsakoffP., & OrganD. (1986). Self-reports in organisational research: Problems and prospects. Journal of Management, 12(12), 531–544.
PrattJ.W. (1964). Risk aversion in the small and in the large. Econometrica, 32(1/2), 122–136.
66.
RauchA., & FreseM. (2000). Psychological approaches to entrepreneurial success: A general model and an overview of findings. In CooperC.L. & RobertsonI.T. (Eds), International review of industrial and organisational psychology (pp. 101–142). Chichester: Wiley.
67.
RayD.M. (1986). Perceptions of risk and new enterprise formation in Singapore: An exploratory study. In RonstadtR., HornadayJ., PetersonR. & VesperK. (Eds), Frontiers of entrepreneurship research (pp. 119–145). Wellesley, MA: Babson College.
68.
SchwerK., & YuceltU. (1984). A study of risk-taking propensities among small business entrepreneurs and managers: An empirical evaluation. American Journal of Business, 8(3), 31–40.
69.
SextonD.L., & BowmanN.B. (1986). Validation of a personality index: Comparative psychological characteristics analysis of female entrepreneurs, managers, entrepreneurship students and business students. In RonstadtR., HornadayJ., PetersonR. & VesperK. (Eds), Frontiers of entrepreneurship research (pp. 40–57). Wellesley, MA: Babson College.
70.
StewartW., & RothP. (2001). Risk propensity between entrepreneurs and managers: A meta-analytic review. Journal of Applied Psychology, 86(1), 145–153.
71.
TanJ., & PengM.W. (2003). Organisational slack and firm performance during economic transitions: Two studies from an emerging economy. Strategic Management Journal, 24(13), 1249–1263.
72.
TverskyA., & KahnemanD. (1992). Advances in prospect theory: Cumulative representation of uncertainty. Journal of Risk and Uncertainty, 5(4), 297–324.
73.
Von HippelE. (1988). The source of innovation. New York, NY: Oxford University Press.
74.
WanP.W., & HoskissonE.R. (2003). Home country environment, corporate diversification strategies and firm performance. Academy of Management, 46(1), 27–45.
75.
WangC.L., & ChungH.F.L. (2013). The moderating role of managerial ties in market orientation and innovation: An Asian perspective. Journal of Business Research, 66(12), 2431–2437.
76.
WangY., & PoutziourisP. (2010). Entrepreneurial risk taking: Empirical evidence from UK family firms. International Journal of Entrepreneurial Behaviour and Research, 16(5), 370–388.
WiklundJ., & ShepherdD.A. (2011). Where to from here? EO-as-experimentation, failure and distribution of outcomes. Entrepreneurship Theory and Practice, 35(5), 925–946.
79.
YiuD.W., LauC., & BruttonG.D. (2007). International venturing by emerging economy firms: The effects firm capabilities, home country networks, and corporate entrepreneurship. Journal of International Business Studies, 38(4), 519–540.
80.
Yli-RenkoH., AutioE., & SapienzaH.J. (2001). Social capital, knowledge acquisition, and knowledge exploitation in young technology-based firms. Strategic Management Journal, 22(6–7), 587–613.
81.
ZhaoH., SeibertS.E., & LumpkinG.T. (2010). The relationship of personality to entrepreneurial intentions and performance: A meta-analytic review. Journal of Management, 36(2), 381–404.
