Mediating role of access to finance on the relationship between strategic orientation attributes and SMEs performance in Nigeria

1. INTRODUCTIONOver the years, Small and Medium Enterprises (SMEs) have gained increasing attention all over the world. This is because they play a significant role in improving economic growth and development, ranging from poverty reduction to employment creation (Small and Medium Enterprises Development Agency of Nigeria [SMEDAN], 2012). In Nigeria, the contribution of SMEs to GDP and employment stands at 46.54% and 25%, respectively (Ndumanya, 2013; SMEDAN, 2012). However, the contribution is below expectation and remains a significant issue, more especially as the country aims to be among the big economies by 2020. Certainly, performing SMEs will play an important role in achieving this objective. Therefore, it is important to examine the factors that may improve performance of SMEs in Nigeria.According to Barney (1991) strategic orientations are organizational cultures representing intangible resources for the firms. Similarly, Gatignon and Xuereb (1997) conceptualize strategic orientations as the strategic activities carried out by the firm to develop and improve firm activities for superior performance. Therefore, the interplay between different strategic orientations may provide firms with competitive advantages which can lead to better performance (Hult, Ketchen, & Slater, 2005). A number of studies have shown that EO, MO, LO and TO are the most important firm resources that can give firms a competitive advantage and lead to better performance (Mu & Di Benedetto, 2011; Salavou, 2010). For instance, exponents of EO suggest that firms promoting entrepreneurial activities are better able to make their operations fit in a dynamic business environment which will have a positive effect on firm performance (Mu & Di Benedetto, 2011; Rauch, Wiklund, Lumpkin, & Frese, 2009). Literature on marketing suggests that the concept of MO is of great importance in affecting the culture of the organization and creating a behavior that will provide the firm with a sustained competitive advantage (Grawe, Chen, & Daugherty, 2009). Furthermore, it has been argued that due to the dynamic nature of the business environment, ability to learn more quickly than competitors may be the only source of sustainable competitive advantage. This indicates the importance of LO in developing new knowledge and transferring information into knowledge (Eris & Ozmen, 2012). The importance of technology and innovation in business cannot be over-emphasized, firms that are technologically oriented will have long-term success as they create and utilize new technological solutions, products and services (Hakala & Kohtamaki, 2011). Therefore, it has been argued that EO, MO, LO and TO could be an important measures of the way the SMEs are organized and its performance could be enhanced through acquiring external financial resources (Aminu & Shariff, 2014). However, despite the notable importance of strategic orientations, prior studies have only investigated the effect of a single (Mahmoud, 2011; Su, Xie, & Li, 2011); or a combination of few strategic orientations (Mahmoud & Yusif, 2012; Wang, Chen, & Chen, 2012). Others investigated the direct relationship between EO, MO, LO, TO and SMEs access to finance (Aminu & Shariff, 2015). There is limited empirical evidence investigating whether access to finance by SMEs can mediate the relationship between these strategic orientation and the performance of SMEs as proposed by Aminu and Shariff (2014). The remainder of the paper is structured as follows: Firstly, previous literature on EO, MO, LO, TO and firm performances were reviewed. The conceptual model in Figure 1 and the set of the study hypotheses were also presented. Then, there follows the methodology used in this research work and data analysis. The paper ends with a discussion of the implications, the limitations, and future research.2. LITERATURE REVIEW2.1. SMEs PerformanceIn several small business literatures, SMEs' performance has been studied by a number of researchers. …