Hieu Minh Vu

Van Lang University

Ho Chi Minh, Vietnam

E-mail: hieu.vm@vlu.edu.vn 

ORCID 0000-0001-9525-2013

Entrepreneurial alertness and profitability of micro firms: The role of risk-taking

Chijioke Nwachukwu*

Horizons University Paris, France;

Department of Financial Technologies South Ural State University Chelyabinsk, 

Russian Federation

E-mail: nvachakvuc@susu.ru; cesogwa.nwachukwu@huparis.eu 

ORCID 0000-0002-7982-2810

*Corresponding author 

Abstract. This study provides insights on entrepreneurial alertness (EA), risk-taking and profitability of micro-sized firms. The direct effects of entrepreneurial alertness on profitability, risk-taking on entrepreneurial alertness and the moderating mechanism of risk-taking are assessed. This research uses surveys completed by micro-sized firms in Ghana. Hypotheses were developed based on the literature review and were validated using data from 150 firms. It was observed that entrepreneurial alertness has significant influence on the profitability of microfirms. Similarly, risk-taking has a predictive impact on entrepreneurial alertness. The connection between entrepreneurial alertness and profitability is not enhanced when risk-taking is added as a moderator. Theoretically, our paper adds to the entrepreneurship literature by using the contingency theory to explain the moderating impact of risk-taking on the entrepreneurial alertness-profitability relationship. Further, the study informs entrepreneurs in developing countries who operate in challenging and volatile business environments of the importance of alertness and risk-taking to profitability.

Received: March, 2021

1st Revision: October, 2021

Accepted: November, 2021

DOI: 10.14254/2071-789X.2021/14-4/6

JEL Classification: D02, O17, P31

Keywords: risk taking, entrepreneurial alertness, profitability