Review on entrepreneurial orientation, economic stimulus packages, differentiation strategy and SME performance in Malaysia during the COVID-19 pandemic

The study aims to establish and conceptualise entrepreneurial orientation (EO) as a key construct that positively influences small and medium-sized enterprises (SMEs) performance. In this paper, a conceptual framework was developed, and three research propositions were outlined: EO (innovativeness, proactiveness and risk-taking) positively influences SME performance; the economic stimulus packages moderate EO and the differentiation strategy; and the differentiation strategy mediates EO and SME performance. Each of the constructs was defined, and the conditions during the COVID-19 pandemic in Malaysia were identified.

The paper suggests links between EO and SME performance and the effects of economic stimulus packages and differentiation strategies on Malaysia’s service and manufacturing industry. These concepts lead to the development of propositions based on prior empirical studies underpinning the resource-based view theory and contingency approach. The propositions aim to develop further findings and test the hypotheses.

The study proposes three research propositions to conceptualise the relationship between the four main constructs. The study also recommends an empirical approach to conduct and test the research model concerning Malaysia’s service and manufacturing industry.

While studies on EO and SME performance have been conducted extensively, studies on the impact of various economic stimulus packages by the Malaysian government on the existing EO and SME performance relationship during the COVID-19 pandemic are limited. Separately, this study uses a configuration approach to test the mediator and moderator during the COVID-19 pandemic.