Entrepreneurial Orientation and New Venture in Thailand's Railway Industry: The Moderating Role of Opportunity Recognition
Main Article Content
Abstract
Aim/Purpose: This study examined the relationship between entrepreneurial orientation (EO) dimensions—innovativeness, risk-taking, and proactiveness—along with opportunity recognition, and new ventures in Thailand's railway industry, which has undergone significant transformation from a state monopoly to increased private sector participation. The research aimed to understand how entrepreneurial capabilities function within a highly regulated, capital-intensive industry in an emerging market context, and how opportunity recognition potentially enhances these relationships.
Introduction/Background: Despite the importance of EO in organizational success across various industries, there is limited research on its role in highly regulated and capital-intensive sectors such as the railway industry, particularly in emerging markets like Thailand. This study addressed this gap by investigating how EO dimensions influence new venture performance in Thailand's railway industry and how opportunity recognition moderates these relationships. The railway industry presents distinctive challenges for entrepreneurship due to high entry barriers, government regulation, complex stakeholder relationships, and substantial capital requirements. These industry-specific factors create a unique context for testing the boundary conditions of entrepreneurial orientation theory and examining how entrepreneurs can succeed despite regulatory constraints.
Methodology: This quantitative study employed survey methodology, collecting data from 174 companies involved in Thailand's railway industry (43.50% response rate). Respondents included company owners, senior executives, and managers from various railway-related businesses such as infrastructure developers, equipment suppliers, operators, and logistics service providers. The questionnaire used 5-point Likert scale items to measure EO dimensions (innovativeness, risk-taking, proactiveness), opportunity recognition, and new venture performance. The research model was tested using SmartPLS 4.0 to analyze factor loadings, reliability, validity, and hypothesis testing, with appropriate model fit indices (SRMR = .071, Chi-square = 387.002, NFI = .800) confirming the model's validity.
Findings: The results showed that all three dimensions of EO positively influenced new venture performance in Thailand's railway industry, with varying effect sizes. Proactiveness demonstrated the strongest direct effect (β = .643, p < .010), followed by risk-taking (β = .322, p < .001) and innovativeness (β = .001, p < .001). More importantly, opportunity recognition positively moderated the relationships between innovativeness and new venture performance (β = .702, p < .001) and between risk-taking and new venture performance (β = .669, p < .004). However, opportunity recognition did not significantly moderate the relationship between proactiveness and new venture performance (β = .513, p = .073). Interaction analyses revealed that innovativeness and risk-taking primarily enhanced performance when coupled with strong opportunity recognition capabilities, while proactiveness created benefits regardless of opportunity recognition levels. The control variables of company age and size also showed small but significant positive effects on new venture performance (β = .089, p < .05 and β = .104, p < .05, respectively).
Contribution/Impact on Society: This study advances understanding of EO and opportunity recognition in regulated industries within emerging markets. It demonstrates how companies can leverage entrepreneurial capabilities despite regulatory constraints, particularly in sectors with significant government involvement. The findings highlight the importance of opportunity recognition as a strategic capability that enhances the effectiveness of entrepreneurial approaches, especially for innovation and risk management in regulated contexts. By identifying which entrepreneurial dimensions benefit most from strong opportunity recognition, the study provides a more nuanced understanding of entrepreneurship in complex regulatory environments. This contributes to both theory development and practical guidance for entrepreneurs in infrastructure sectors undergoing regulatory transition.
Recommendations: For entrepreneurs entering or operating in Thailand's railway industry, developing robust opportunity recognition capabilities is crucial for enhancing innovation outcomes and effectively managing risks. Companies should establish systematic processes for monitoring changes in market demands, technological environments, economic conditions, and regulatory frameworks. These opportunity recognition processes should be particularly connected to innovation and risk management functions, while recognizing that proactive approaches may derive value primarily through execution advantages rather than superior opportunity identification. For policymakers, the study suggests that regulatory frameworks should be designed to create "entrepreneurial space" within necessary safety and operational regulations, potentially through regulatory sandboxes that allow controlled experimentation with new technologies and business models. Industry associations should facilitate knowledge sharing about successful entrepreneurial approaches within regulatory boundaries.
Research Limitations: The study's focus on Thailand's railway sector may limit generalizability to other emerging markets or regulated industries. The reliance on self-reported data from single respondents within each company may introduce common method bias. Additionally, the cross-sectional design limits causal inferences about the relationships examined. The unusually small coefficient for innovativeness requires careful interpretation, though its strong interaction effect suggests its impact primarily manifests through opportunity recognition.
Future Research: Future studies could extend this framework through comparative analyses across different emerging markets or transportation sectors, employ longitudinal designs to examine how entrepreneurial orientation evolves over time in regulated environments, or explore potential negative consequences of entrepreneurial approaches in safety-critical sectors. Research could also investigate the organizational mechanisms that enable effective opportunity recognition in highly regulated contexts and examine how different types of regulations (safety standards, market entry requirements, pricing controls) differentially impact EO dimensions. As digital transformation continues to affect the railway industry, studies could explore how technological disruption creates new entrepreneurial opportunities within regulatory frameworks.
Article Details
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Copyright: Asia-Pacific International University reserve exclusive rights to publish, reproduce and distribute the manuscript and all contents therein.
References
Adomako, S., & Danso, A. (2014). Regulatory environment, environmental dynamism, political ties, and performance: Study of entrepreneurial firms in a developing economy. Journal of Small Business and Enterprise Development, 21(2), 212–230. https://doi.org/10.1108/JSBED-01-2014-0004
Aiken, L. S., & West, S. G. (1991). Multiple regression: Testing and interpreting interactions in multiple regression. Sage Publications. https://us.sagepub.com/en-us/nam/multiple-regression/book3045
Anim, P. A., Arthur, E., & Amoako, G. K. (2024). Entrepreneurial orientation, social media and SME performance: an emerging economy perspective. Asia-Pacific Journal of Business Administration, 16(5), 1037–1066. https://doi.org/10.1108/APJBA-12-2022-0514
Anwar, M., Clauss, T., & Issah, W. B. (2022). Entrepreneurial orientation and new venture performance in emerging markets: The mediating role of opportunity recognition. Review of Managerial Science, 16(3), 769–796. https://doi.org/10.1007/s11846-021-00457-w
Barney, J. B. (2001). Resource-based theories of competitive advantage: A ten-year retrospective on the resource-based view. Journal of Management, 27(6), 643–650. https://doi.org/10.1016/S0149-2063(01) 00115-5
Baruch, Y., & Holtom, B. C. (2008). Survey response rate levels and trends in organizational research. Human Relations, 61(8), 1139–1160. https://doi.org/10.1177/0018726708094863
Board of Investment of Thailand. (2024). Railways. Government of Thailand. https://www.boi.go.th/ index.php?page=railways&language=en
Buthphorm, O., Sukhotu, V., & Hengsadeekul, T. (2024). An analysis of the development factors of rail freight transport in Thailand: A structural equation modeling approach. Infrastructures, 9(7), 102. https://doi.org/10.3390/infrastructures9070102
Clark, K., & Ramachandran, I. (2019), Subsidiary entrepreneurship and entrepreneurial opportunity: An institutional perspective. Journal of International Management, 25(1), 37–50. https://doi.org/10.1016/ j.intman.2018.06.001
Covin, J. G., & Lumpkin, G. T. (2011). Entrepreneurial orientation theory and research: Reflections on a needed construct. Entrepreneurship Theory and Practice, 35(5), 855–872. https://doi.org/10.1111/j.1540-6520.2011.00482.x
Covin, J. G., & Slevin, D. P. (1989). Strategic management of small firms in hostile and benign environments. Strategic Management Journal, 10(1), 75–87. https://doi.org/10.1002/smj.4250100107
Covin, J. G., & Wales, W. J. (2019). Crafting high-impact entrepreneurial orientation research: Some suggested guidelines. Entrepreneurship Theory and Practice, 43(1), 3–18. https://doi.org/10.1177/1042258718773181
Dayan, M., Ng, P. Y., Husain, Z., & Zacca, R. (2023). Effects of constructive politics and market turbulence on entrepreneurial orientation–performance relationship: A moderated mediation model. European Management Journal, 41(3), 385–394. https://doi.org/10.1016/j.emj.2022.03.001
Donbesuur, F., Boso, N., & Hultman, M. (2020). The effect of entrepreneurial orientation on new venture performance: Contingency roles of entrepreneurial actions. Journal of Business Research, 118, 150–161. https://doi.org/10.1016/j.jbusres.2020.06.042
Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: What are they? Strategic Management Journal, 21(10‐11), 1105–1121. https://www.jstor.org/stable/3094429
Firman, F. A., Kusumastuti, R. D., Kurniawan, H. T., & Ruky, I. M. (2018). Investigating entrepreneurial orientation impact on project performance in highly regulated industry: A case of renewable power industry in Indonesia. In B. M. Sukoco, R. Setianto,
N. Arina, A. G. Abdullah, A. Nandiyanto, & R. Hurriyati (Eds.), Increasing Management Relevance and Competitiveness. CRC Press. https://www.taylorfrancis.com/ chapters/edit/10.1201/9781351241892-5/investigating-entrepreneurial-orientation-impact-project-performance-highly-regulated-industry-case-renewable-power-industry-indonesia-firman-kusumastuti-kurniawan-ruky
Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50. https://doi.org/10.2307/3151312
Guo, H., Tang, J., & Su, Z. (2014). To be different, or to be the same? The interactive effect of organizational regulatory legitimacy and entrepreneurial orientation on new venture performance. Asia Pacific Journal of Management, 31(3), 665–685. https://doi.org/10.1007/s10490-013-9361-9
Guo, H., Tang, J., Su, Z., & Katz, J. A. (2017). Opportunity recognition and SME performance: The mediating effect of business model innovation. R&D Management, 47(3), 431–442. https://doi.org/10.1111/radm.12219
Guo, H., Su, Z., & Ahlstrom, D. (2016). Business model innovation: The effects of exploratory orientation, opportunity recognition, and entrepreneurial bricolage in an emerging economy. Asia Pacific Journal of Management, 33(2), 533–549. https://doi.org/10.1007/s10490-015-9428-x
Hair, J. F., Bush, R. P., & Ortinau, D. J. (2005). Marketing research: Within a changing information environment (3rd ed.). McGraw-Hill. https://www.amazon.com/Marketing-Research-Information-Environment-MARKETING/dp/0072830875
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2022). A primer on partial least squares structural equation modeling (PLS-SEM) (3rd ed.). Sage Publications. https://uk.sagepub.com/en-gb/eur/a-primer-on-partial-least-squares-structural-equation-modeling-pls-sem/book270548
Hair, J. F., Ringle, C. M., & Sarstedt, M. (2011). PLS-SEM: Indeed a silver bullet. Journal of Marketing Theory and Practice, 19(2), 139–152. https://doi.org/10.2753/MTP1069-6679190202
Hranický, M. P., Nedeliaková, E., & Vojtek, M. (2019). Entrepreneurial opportunities in railway passenger transport. Proceedings of the International Conference on Economics, Management and Technology in Enterprises 2019 (EMT 2019), 78, 120–125. https://doi.org/10.2991/emt-19.2019.22
Khanna, T., Palepu, K. G., & Bullock R. (2010). Winning in emerging markets: A road map for strategy and execution. Harvard Business Press. https://www.hbs.edu/faculty/Pages/item.aspx?num=37467
Kim, J. Y., Choi, D. S., Sung, C. S., & Park, J. Y. (2018). The role of problem-solving ability on innovative behavior and opportunity recognition in university students. Journal of Open Innovation: Technology, Market, and Complexity, 4(1), 1–13. https://doi.org/10.1186/s40852-018-0085-4
Klapper, L., Laeven, L., & Rajan, R. (2006). Entry regulation as a barrier to entrepreneurship. Journal of Financial Economics, 82(3), 591–629. https://doi.org/10.1016/j.jfineco.2005.09.006
Kuckertz, A., Berger, E. S. C, & Mpeqa, A. (2016). The more the merrier? Economic freedom and entrepreneurial activity. Journal of Business Research, 69(4), 1288–1293. https://doi.org/10.1016/j.jbusres.2015.10.094
Lim, W., Lee, Y., & Mamun, A. A. (2023). Delineating competency and opportunity recognition in the entrepreneurial intention analysis framework. Journal of Entrepreneurship in Emerging Economies, 15(1), 212–232. https://doi.org/10.1108/JEEE-02-2021-0080
Lumpkin, G. T., & Dess, G. G. (1996). Clarifying the entrepreneurial orientation construct and linking it to performance. The Academy of management Review, 21(1), 135–172. https://doi.org/10.2307/258632
Lumpkin, G. T., & Dess, G. G. (2001). Linking two dimensions of entrepreneurial orientation to firm performance: The moderating role of environment and industry life cycle. Journal of Business Venturing, 16(5), 429–451. https://doi.org/10.1016/S0883-9026(00)00048-3
Makhloufi, L., Laghouag, A. A., & Sahli, A. A. (2024). Mediating effect of absorptive capacity on the relationship between knowledge sharing and entrepreneurial orientation and the moderating role of opportunity recognition. Journal of Research in Marketing and Entrepreneurship, 26(2), 415–439. https://doi.org/10.1108/JRME-07-2023-0123
Miller, D. (1983). The correlates of entrepreneurship in three types of firms. Management Science, 29(7), 770–791. https://www.jstor.org/stable/2630968
Ministry of Transport. (2019). Thailand's transportation system development strategy 20-year period (2018-2037). https://web.dlt.go.th/dlt-direction/media/attachments/2565/07/08/.-20-_-..62.pdf
Nunnally, J. C., & Bernstein, I. H. (1994). Psychometric theory, (3 rd ed). McGraw-Hill. https://www.amazon.com/Psychometric-Theory-Jum-C-Nunnally/dp/007047849X
Patel, P.C. (2019). Opportunity related absorptive capacity and entrepreneurial alertness. International Entrepreneurship and Management Journal, 15(1), 63–73. https://link.springer.com/article/10.1007/ s11365-018-0543-2
Podsakoff, P. M., MacKenzie, S. B., Lee, J. Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879-903. https://doi.org/10.1037/0021-9010.88.5.879
Podsakoff, P. M., & Organ, D. W. (1986). Self-reports in organizational research: Problems and prospects. Journal of Management, 12(4), 531-544. https://doi.org/10.1177/014920638601200408
Porter, M. E., & Kramer, M. R. (2011, January-February). Creating shared value. Harvard Business Review, 89(1/2), 62–77. https://www.hbs.edu/faculty/Pages/item.aspx?num=39071
Rahman, M., Akter, M., & Radicic, D. (2020). Internationalization as a strategy for small and medium‐sized enterprises and the impact of regulatory environment: An emerging country perspective. Business Strategy & Development, 3(2), 213–225. https://doi.org/10.1002/bsd2.90
Rauch, A., Wiklund, J., Lumpkin, G. T., & Frese, M. (2009). Entrepreneurial orientation and business performance: An assessment of past research and suggestions for the future. Entrepreneurship Theory and Practice, 33(3), 761–787. https://doi.org/10.1111/j.1540-6520.2009.00308.
Saleh, A. M., & Athari, S. A. (2023). Examining the impact of entrepreneurial orientation on new venture performance in the emerging economy of Lebanon: A moderated mediation analysis. Sustainability, 15(15), 11982. https://doi.org/10.3390/su151511982
Sathyanarayana, S., & Mohanasundaram, T. (2024). Fit indices in structural equation modeling and confirmatory factor analysis: Reporting guidelines. Asian Journal of Economics, Business and Accounting, 24(7), 561–577. https://doi.org/10.9734/ajeba/2024/v24i71430
Shin, S. (2024). A re-examination of four decades’ deregulation effect on competition and productivity of the US freight rail transportation industry. Journal of International Logistics and Trade, 22(1), 22–38. https://doi.org/10.1108/JILT-07-2023-0046
Shirokova, G., Bogatyreva, K., Beliaeva, T., & Puffer, S. (2016). Entrepreneurial orientation and firm performance in different environmental settings: Contingency and configurational approaches. Journal of Small Business and Enterprise Development, 23(3), 703–727. https://doi.org/10.1108/JSBED-09-2015-0132
Sinaiko, H. W., & Brislin, R. W. (1973). Evaluating language translations: Experiments on three assessment methods. Journal of Applied Psychology, 57(3), 328–334. https://doi.org/10.1037/h0034677
Tang, J., Kacmar, K. M. M., & Busenitz, L. (2012). Entrepreneurial alertness in the pursuit of new opportunities. Journal of Business Venturing, 27(1), 77–94. https://doi.org/10.1016/j.jbusvent.2010.07.001
Teece, D. J., (2016). Dynamic capabilities and entrepreneurial management in large organizations: Toward a theory of the (entrepreneurial) firm. European Economic Review, 86, 202–216. https://doi.org/10.1016/ j.euroecorev.2015.11.006
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533. https://www.jstor.org/stable/3088148
Tshiaba, S. M., Wang, N., Ashraf, S.F., Nazir, M. &Syed, N. (2021), Measuring the sustainable entrepreneurial performance of textile-based small–medium enterprises: A mediation–moderation model, Sustainability, 13(19), 11050. https://doi.org/10.3390/su131911050
Wales, W. J., Covin, J. G., & Monsen, E. (2020). Entrepreneurial orientation: The necessity of a multilevel conceptualization. Strategic Entrepreneurship Journal. 14(4), 639–660. https://doi.org/10.1002/sej.1344
Wang, T., Thornhill, S., & De Castro, J. O. (2017). Entrepreneurial orientation, legitimation, and new venture performance. Strategic Entrepreneurship Journal, 11(4), 373–392. https://doi.org/10.1002/sej.1246
Yu, X., Cao, N., & Ren, H. (2023). The impact of entrepreneurial orientation on the sustainable innovation capabilities of new ventures: From the perspective of ambidextrous learning. Sustainability, 15(11). 9026. https://doi.org/10.3390/su15119026
