Risk taking, innovativeness and competitive rivalry: A three-way interaction towards firm performance

Abstract

It is unclear how entrepreneurial firms should engage in risk taking and innovativeness in highly competitive environments. Using a sample of 167 New Zealand firms, we provide new insight to identify a significant three-way interaction effect between risk taking, innovativeness and competitive rivalry towards firm performance. We found high risk taking and innovativeness to be linked to higher firm performance, irrespective of the extent of competitive rivalry. Low innovativeness was found to be associated with differing levels of firm performance depending on the level of rivalry. These results have important implications for future research and for practitioners where competitive rivalry can influence dimensions of performance in entrepreneurial firms in ways that have not been previously recognized.