Entrepreneurial orientation and Firm Profitability: Evidence from Lagos state

Entrepreneurial orientation and Firm Profitability: Evidence from Lagos state

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Journal/Publisher: Journal Of Business And Management(iosr-jbm)

Volume/Edition: 21

Language: English

Pages: 42 - 54


Small and medium sized enterprises (SMEs) contribute largely to economic of Nigeria, but are faced with epileptic performance resulting into low market share, poor sales growth, and weak profitability. This paper examined the effect of entrepreneurial orientation (EO) on the profitability of SMEs in Lagos State, Nigeria.Survey research design was adopted. The target population was 4,535 SMEs in Lagos State. The population comprised SMEs in manufacturing, real estate, agricultural and services sectors in Ikeja, Badagry, Ikorodu, Lagos Island, and Epe of Lagos State. Cochran (1997) sample size formula was used to select sample size of 460 owner-managers. Multistage sampling technique was used in selecting the respondents. A structured questionnaire was adapted and validity established. Cronbach’s alpha reliability coefficients for the constructs ranged from 0.79 to 0.95. Four hundred and sixty copies of the questionnaire were administered and 99% response rate was recorded. Data were analyzed using descriptive and inferential statistics. The findings revealed that proactiveness and risk taking had positive significant effect on profitability and competitive aggressiveness exhibited a negative significant effect on profitability, while autonomy and innovativeness werestatistically insignificant.The paper concluded that EO has a significant effect on profitability of SMEs, and recommended that proactiveness and risk-taking are owners/managers’ ingredients profitability.

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