ENTREPRENEURIAL ALERTNESS AND PROFITABILITY OF MICRO FIRMS: THE ROLE OF RISK-TAKING
ENTREPRENEURIAL ALERTNESS AND PROFITABILITY OF MICRO FIRMS: THE ROLE OF RISK-TAKING

Summary/Abstract: This study provides insights on entrepreneurialalertness (EA), risk-taking and profitability of micro-sizedfirms. The direct effects of entrepreneurial alertness onprofitability, risk-taking on entrepreneurial alertness andthe moderating mechanism of risk-taking are assessed.This research uses surveys completed by micro-sizedfirms in Ghana. Hypotheses were developed based on theliterature review and were validated using data from 150firms. It was observed that entrepreneurial alertness hassignificant influence on the profitability of microfirms.Similarly, risk-taking has a predictive impact onentrepreneurial alertness. The connection betweenentrepreneurial alertness and profitability is not enhancedwhen risk-taking is added as a moderator. Theoretically,our paper adds to the entrepreneurship literature by usingthe contingency theory to explain the moderating impactof risk-taking on the entrepreneurial alertnessprofitability relationship. Further, the study informsentrepreneurs in developing countries who operate inchallenging and volatile business environments of theimportance of alertness and risk-taking to profitability

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