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Small agricultural businesses' performance—What is the role of dynamic capabilities, entrepreneurial orientation, and environmental sustainability commitment?
Author(s) -
Dias Claudia,
Gouveia Rodrigues Ricardo,
Ferreira João J.
Publication year - 2021
Publication title -
business strategy and the environment
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.123
H-Index - 105
eISSN - 1099-0836
pISSN - 0964-4733
DOI - 10.1002/bse.2723
Subject(s) - sustainability , agriculture , business , structural equation modeling , market orientation , entrepreneurial orientation , entrepreneurship , resource (disambiguation) , dynamic capabilities , natural resource , marketing , competitive advantage , industrial organization , ecology , finance , computer science , computer network , biology , machine learning
The role that the resources and capabilities of agricultural entrepreneurs play on both environmental performance (EP) and financial performance (FP) is still unclear. This study analyzes how small farms enhance EP and FP in an inland Portuguese region through the relationship between dynamic capabilities (DCs), entrepreneurial orientation (EO), and environmental sustainability commitment (ESC). Based on a sample of 160 fresh fruit farms and applying a partial least squares structural equation modeling (PLS‐SEM), our study concludes that EO and ESC influence EP and FP positively. Hence, farms can achieve competitive advantage through mitigating their profound impacts on the environment as proposed by the natural resource‐based view (NRBV). Farms are also improving DCs, but farmers respond to the higher environmental requirements of agricultural markets primarily through research and development (R&D) capabilities and not through marketing capabilities. Having as theoretical supports the NRBV and the DCs, our study contributes to a better understanding of the mechanisms through which entrepreneurs enhance EP and FP in sectors with high environmental impacts such as agriculture. The findings suggest that entrepreneurship training projects may enable farmers to approach food security as a market opportunity and not only as rules they must follow.