Linking Entrepreneurial and Market Orientation to the Homestay Performance: The Moderating Role of Environmental Factors

Abstract

Previous studies have explored the relationship between entrepreneurial orientation (EO) and business performance in different organisations, however, few studies exist on the homestay industry. As such, this paper aims to show how environmental factors (EF), and market orientation (MO) within which firms operate interactively impact the EO-firm performance relationship. Data for this study were collected from 116 homestay operators in Selangor and Partial Least Square Structural Equation Modelling (PLS-SEM) approach was employed to evaluate the measurement model. The findings show that EO is positively associated with hospitality performance. However, the strength and direction of these relationships vary by configurations of the EF and MO variables. Firms achieve superior performance when considering EF and MO variables. A limitation of this study is that firms were not examined longitudinally, as this is a cross-sectional study. Future studies may include longitudinal research or focus on other regions.