This study examines the impact of business model (BM) design on the performance of entrepreneurial firms (EF) in emerging markets, specifically Indonesia. It examines the impact of novelty- and efficiency-oriented and dual BM design on EF performance and explores contingency variables that may moderate the link at micro, organizational and industry levels.
Employing a quantitative approach, this study analyzes 158 Indonesian EFs with data collected through structured questionnaires and analyzed using multiple regressions. Performance of EFs is measured by return on assets (ROA) which captures both operational efficiency and the impact of innovation within the chosen BM design.
Both novelty- and efficiency-oriented BM designs positively impact EFs' performance; however, a simultaneously high emphasis on both leads to diminishing returns, suggesting a strategic trade-off. Managerial experience is the only significant moderator that positively moderates the effect of dual BM designs but weakens the link between novelty- and efficiency-oriented BM designs and performance.
In emerging markets, EF managers should choose their BM design carefully. Less experienced managers can benefit more from focusing on either novelty or efficiency, whereas experienced managers are better suited to leveraging a dual-oriented BM design.
This study provides empirical evidence of the interplay between different BM designs and the moderating role of managerial experience on EF performance in emerging markets, offering new insights into the complex link between BM design and performance.
