**6. Discussion and conclusions**

This chapter seeks to contribute to the development of the literature on EO as a factor that influences export performance of small firms through a robust empirical study. The central context of this research is on SMEs, as in most world economies, which constitutes the vast majority of firms in Portugal. Understanding the effects of decisions made by management in selecting strategic orientations is crucial and highly relevant to both theory and practice.

Hence, this study allowed us to conclude that entrepreneurial orientation, particularly innovation and proactiveness, has a positive and significant impact on EP (H1 supported), validating previous research (e.g., [8, 31]). Portuguese textile SMEs seek to support and stimulate new ideas, experimentation and creativity that surely result in new products, services and processes. Indeed, technological innovation encompasses research and engineering efforts focused on developing new products and processes. Product innovation includes market research, design and investment on advertising and promotion. Administrative innovation is related to the development of management systems, control techniques and organisational structure. Thus, embracing innovation can generate competitive advantage and promote superior source of growth [40]. In the long run, proactive SMEs, complemented by innovative activities [17], can be market leaders in the development of new products and technologies rather than simply follow trends [8, 9], identify future customer needs, anticipate changes in demand and search new business opportunities [40]. Certainly, export firms need to continually search for new strategies and processes to obtain a better understanding of their new countries. These results can be explained by the particular characteristics of the textile sector. In this sense, each season, firms have to launch new collections (product innovations) and try to differentiate themselves from the competition (market innovations).

Thus, entrepreneurial orientation has a positive and significant impact on export performance, confirming Wiklund and Shepherd [14] beliefs. Moreover, this confirms the commitment to innovation, supported by Lumpkin and Dess [17] and Miller [8], regarding the creation of new products and services, search for new opportunities and opening of new markets; and with proactiveness, firms will be able to achieve superior performance compared to competition [31].

Small traditional firms represent a very important part of the economic system in many European countries. Their significant contribution to the gross domestic product (GDP), national exports, and job creation makes them an important policy target [1]. In fact, and according to Portugal's Textile Association (ATP), this industry in 2016 accounted for 20% of industrial employment, 9% of GDP and 10% of Portuguese industrial exports.

control our analysis. The fact that the research does not consider the effect of control variables such as age, location and target market of the respondents can be seen as a limitation. Third, we used an online study to collect our data. While electronic data collection methods are becoming more common, strategies to encourage a greater response rate are lacking compared to other survey implementation methods. Finally, the fact that the sampling is non-probabilistic and convenient is a limitation. Therefore, we advise prudence in the generalisation of results.

Entrepreneurial Orientation and Firm Performance http://dx.doi.org/10.5772/intechopen.72009 33

First, this study has been based on a mature sector, that is, the textile sector in Portugal. The results obtained should be understood in this context. Therefore, new research could be done in more modern industries to test again the proposed relations. Second, given the irregular nature of business growth, a snapshot survey may not be able to capture strategy and performance variations over long periods of time. As such, further studies with a longitudinal perspective would be of added value to investigate why these differences persist. In other words, to find how and why some small exporters become highly successful while others, in the same

UNIAG, R&D unit funded by the FCT – Portuguese Foundation for the Development of

This work is funded by national funds through the FCT – Foundation for the Development of

[1] Zucchella A, Siano A. Internationalization and innovation as resources for SME growth in Foreign markets. International Studies of Management and Organization. 2014;**44**(1):21-41

and Rubén Fernández Ortiz4

Science and Technology, Ministry of Science, Technology and Higher Education.

Science and Technology, I.P., in the framework of the project «UID/GES/04752/2016».

**6.3. Future lines of research**

**Acknowledgments**

**Author details**

**References**

Orlando Lima Rua1,2\*, Alexandra França<sup>3</sup>

1 Polytechnic of Porto/ISCAP, Portugal

3 University of Vigo/FCEE, Vigo, Spain

4 University of La Rioja/FCE, Logrõno, Spain

\*Address all correspondence to: orua@iscap.ipp.pt

2 Applied Management Research Unit/UNIAG, Portugal

industry, struggle to raise their export strengths to survive.

We can only speculate that the Portuguese textile industry faces considerable challenges not only regarding the economic crisis in international markets, which restricts access to resources, but also concerning consumption patterns. Furthermore, international competitiveness does not allow SMEs to develop a competitive strategy based on differentiation, thus changing their business model paradigm. Indeed, mature industries are characterised by increased competition and price deflation due to overcapacity [41]. As reported by the ATP [33], globalisation pressures, such as textile trade liberalisation, have considerably affected the industry. The textile sector is being subjected to strong pressures in a fastchanging business environment due to market volatility and strong competition worldwide.

#### **6.1. Theoretical and practical implications**

Our study is responsive to the call of Sousa et al. [6], which suggests that in international market context, firms' survival and expansion, and consequent economic growth of many countries, are strongly dependent on a better understanding of the strategic determinants that influence export performance.

We also highlight the contribution of this study to the theory of strategic management. It is known that strategy includes deliberate and emergent initiatives adopted by management, comprising resource and capabilities used to improve business performance [42]. In order to remain competitive, firms must assess which strategic determinants give them an advantage over their competitors. The findings are a contribution to clarify the influence of entrepreneurial orientation in export performance of small firms.

Additionally, our findings provide guidance to business practitioners, since they indicate that entrepreneurial orientation is a predictor of performance. The research has also shown the positive influences of generic strategies on firm performance. Therefore, for small firm managers, competitive strategy does matters, and the development of one type of competitive advantage, alongside with firm's resources, is a major performance driver.

By building on the literature entrepreneurship and strategic management, this study aims to support the strategic development of business management policies designed to increase firms' performance in foreign markets and to add value to the current context of change.

#### **6.2. Research limitations**

While this research provides valuable insights into SMEs in the textile industry, the study is not without its limitations. First, the state of the economy might have affected our results. The low scores of willingness to take risks might be influenced by the current context of economic crisis. In fact, in a turbulent market, risk-taking is negatively associated with the SME performance [43] and is in fact related to firm's failure [23]. Second, it would have been interesting to control our analysis. The fact that the research does not consider the effect of control variables such as age, location and target market of the respondents can be seen as a limitation. Third, we used an online study to collect our data. While electronic data collection methods are becoming more common, strategies to encourage a greater response rate are lacking compared to other survey implementation methods. Finally, the fact that the sampling is non-probabilistic and convenient is a limitation. Therefore, we advise prudence in the generalisation of results.

#### **6.3. Future lines of research**

Small traditional firms represent a very important part of the economic system in many European countries. Their significant contribution to the gross domestic product (GDP), national exports, and job creation makes them an important policy target [1]. In fact, and according to Portugal's Textile Association (ATP), this industry in 2016 accounted for 20% of

We can only speculate that the Portuguese textile industry faces considerable challenges not only regarding the economic crisis in international markets, which restricts access to resources, but also concerning consumption patterns. Furthermore, international competitiveness does not allow SMEs to develop a competitive strategy based on differentiation, thus changing their business model paradigm. Indeed, mature industries are characterised by increased competition and price deflation due to overcapacity [41]. As reported by the ATP [33], globalisation pressures, such as textile trade liberalisation, have considerably affected the industry. The textile sector is being subjected to strong pressures in a fastchanging business environment due to market volatility and strong competition worldwide.

Our study is responsive to the call of Sousa et al. [6], which suggests that in international market context, firms' survival and expansion, and consequent economic growth of many countries, are strongly dependent on a better understanding of the strategic determinants that

We also highlight the contribution of this study to the theory of strategic management. It is known that strategy includes deliberate and emergent initiatives adopted by management, comprising resource and capabilities used to improve business performance [42]. In order to remain competitive, firms must assess which strategic determinants give them an advantage over their competitors. The findings are a contribution to clarify the influence of entrepre-

Additionally, our findings provide guidance to business practitioners, since they indicate that entrepreneurial orientation is a predictor of performance. The research has also shown the positive influences of generic strategies on firm performance. Therefore, for small firm managers, competitive strategy does matters, and the development of one type of competitive

By building on the literature entrepreneurship and strategic management, this study aims to support the strategic development of business management policies designed to increase firms' performance in foreign markets and to add value to the current context of change.

While this research provides valuable insights into SMEs in the textile industry, the study is not without its limitations. First, the state of the economy might have affected our results. The low scores of willingness to take risks might be influenced by the current context of economic crisis. In fact, in a turbulent market, risk-taking is negatively associated with the SME performance [43] and is in fact related to firm's failure [23]. Second, it would have been interesting to

advantage, alongside with firm's resources, is a major performance driver.

industrial employment, 9% of GDP and 10% of Portuguese industrial exports.

**6.1. Theoretical and practical implications**

neurial orientation in export performance of small firms.

influence export performance.

32 Entrepreneurship - Trends and Challenges

**6.2. Research limitations**

First, this study has been based on a mature sector, that is, the textile sector in Portugal. The results obtained should be understood in this context. Therefore, new research could be done in more modern industries to test again the proposed relations. Second, given the irregular nature of business growth, a snapshot survey may not be able to capture strategy and performance variations over long periods of time. As such, further studies with a longitudinal perspective would be of added value to investigate why these differences persist. In other words, to find how and why some small exporters become highly successful while others, in the same industry, struggle to raise their export strengths to survive.
