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CORPORATE ENTREPRENEURSHIP AS A DETERMINANT OF LARGE FIRM PERFORMANCE: IntroductionIt is widely known that the ultimate goal of every organisation is to achieve superior performance in both financial and non-financial aspects. Thus, it is crucial for organisations to understand factors that can influence their performance in order to survive and prosper. In line with this, this study aims to investigate the relationship between the CE and firm performance. It has been proven in previous studies that the CE activities such as innovation, proactiveness, risk taking, and corporate venturing lead to superior firm performance. This current study was conducted among the public-listed companies (PLCs) listed on the main board, Bursa Malaysia from 2011 and 2012.
The performance of the PLCs has been a major concern since today they are facing more challenging environments compared to the challenges faced in the past. This is evident as the survival rates of the listed firms were found declining. Besides, when PLCs became public companies, they suffered from low level of profitability or, more often than not, their profitability was negative. They have also failed to present a quality, balanced, and meaningful strategy. According to Bursa Malaysia, as of August 2010, the number of PLCs categorised under P17 classification has increased to 34 companies. They were facing financial distress whereby the liability was higher than the value of their assets and thus they were exposed to being bankrupt. Therefore, the PLCs have to find appropriate business strategies in order to improve their performance.
In this new era where the resources are tight, highly competitive, rapid technological change, shortened product life cycles and uncertain business environment, firms that do not practice CE will be competed out of the market (Kuratko, 2009;Peltola, 2012). Since CE is the strategy that large firm must use in order to grow and achieve profitability, the research on the impact of CE on the performance of large firm must be empirically studied. However, in developing countries, the term CE is considered new and therefore the empirical evidence is needed especially on large firm setting.
Usually in developing countries like Malaysia, most of the researches on entrepreneurship are on small firms or individual entrepreneurships (Miller & Breton-Miller, 2011). Fundamentally, large firm faces different challenges than the challenges faced by small firm. This is generally because both types of firm have different organisational design and management styles. Previous studies have indicated that the effects of CE on firm performance are different across countries. payday loan online
The next section of this paper discusses the research context and theoretical framework in relation to existing literatures on CE and firm performance. This is followed by an explanation on research method used and assessments of goodness of measures, namely, construct validity, convergent validity, discriminant validity and reliability of the constructs, and the results of the hypotheses testing. Finally, this paper concludes and gives some suggestions and recommendation.