Abstract:
The purposes of this research were to study 1) the performance levels of entrepreneurial
orientation, differentiation strategy and innovation performance and 2) the influences of the
entrepreneurial orientation on the innovation performance of small and medium enterprises (SMEs).
Questionnaires were used as research instrument to collect data from a sample of 238 SMEs,
using purposive, non-probability sampling. Data were analyzed by inferential statistics from a
structural equation model. The result related to the level of operation in entrepreneurial orientation
indicated that risk taking was at a high level ( X =3.96). Regarding the level of operation in
differentiation strategy, marketing of new products and new services was at a high level ( X =3.78).
Regarding the level of operation in innovation performance, research and development effort was at
a high level ( X =3.51). The outputs from the structural equation model showed that the model was
fit to the empirical data (Ƶ2
/df = 1.807, TLI =0.914, CFI = 0.920, RMSEA = 0.047). Entrepreneurial
orientation did not have a direct effect on innovation performance and entrepreneurial orientation
using differentiation strategy had an indirect relationship on innovation performance.
