Influence of Entrepreneurial Orientation on Financial Performance of Small and Medium Scale Enterprises in North East, Nigeria
Abstract
This study investigated the influence of entrepreneurial orientation on financial performance of small and medium-scale enterprises (SMEs) in North-East Nigeria. The study had two objectives, two research questions, and two null hypotheses. A quantitative research design utilizing a survey approach was adopted for the study. The target population comprised 2000 registered manufacturing SMEs in North-East Nigeria, covering Adamawa, Bauchi, Borno, Gombe, Taraba, and Yobe States. A sample size of 322 SME managers was used for the study. This sample size was determined using the Krejcie and Morgan (1970) sample size determination table at a 95% confidence level with a 5% margin of error. The instrument for data collection was a structured questionnaire Entrepreneurial Orientation Financial Performance of SMEs Questionnaires (EOFPSMESQ) developed by the researcher to measure entrepreneurial orientation (organizational innovativeness and risk-taking behaviour), and financial performance of SME. The instrument was validated, and reliability was established using Cronbach Alpha. The reliability coefficient of the instrument was 0.883. Data collected were analyzed using descriptive statistics of mean and standard deviation, while inferential statistics of linear regression was used to test the null hypotheses at 0.05 level of significance. The study found that innovativeness (R = 0.502; R² = 0.252; F = 102.636), risk-taking (R = 0.517; R² = 0.267; F = 110.669 have strong positive effects on financial performance. The study concludes that entrepreneurial orientation is a critical driver of both financial performance of SMEs in North-East Nigeria. It was recommended that SME owners and managers should strengthen innovative practices, adopt calculated risk-taking, to enhance overall business performance, while policymakers should design integrated support programs that promote entrepreneurial orientation.