Abstract

The main aim of this study is to simultaneously investigate the impact of entrepreneurial orientation, market orientation and environmental conditions on international performance of SMEs. Moreover, the moderating role of domestic environment is examined, with the objective of gaining a greater understanding of whether certain environmental conditions may increase the significance of different strategic orientations. To this aim, we use survey data from 186 Italian SMEs operating in traditional manufacturing industries. Our results show that both entrepreneurial orientation and market orientation positively influence international performance of SMEs, while the relationship between domestic environment hostility and dynamism and international performance is negative. Furthermore, while the moderating influence of environmental characteristics on the relationship between EO and international performance is positive, the moderating influence of environmental characteristics on the relationship between MO and international performance is negative. Based on these results, domestic environment can be viewed as a contextual variable that is really critical in understanding the role of strategic and firm-level dimensions.