KOREASCHOLAR

With the development of artificial intelligence, large data and cloud computing technologies, the global trend of industrie 4.0 is coming. The key factor is IT convergence of software and hardware. From large corporations to small and medium-sized enterprises, IT companies must realize internationalization as a survival strategy effectively in the global market-based economy (Wilden & Gudergan, 2015). Recently, dynamic capability is the ultimate source of competitive advantage. Dynamic capability is the ability to integrate, relocate, and form new capabilities of an organization's resources to adapt to changing environments (Barreto, 2010; Fallon-Byrne & Harney, 2017; Teece, 2012). On the other hand, entrepreneurship is closely related to various factors such as dynamic adaptation of company, adaptation, response, and innovation to changing environments (Arend, 2013). From this viewpoint, the aim of this paper is to examine the effect of entrepreneurship on firm's dynamic capabilities and the impact of dynamic capability on business performance (Etemad, 2004; Laukkanen, Nagy et al. 2013). In addition, we explore whether the effects vary across company type, namely those of soft and hardware companies. In this model, dynamic capabilities consist of three sub-dimensions; opportunity exploration capability (DC_O), resource acquisition capability (DC_A), and resource reconfiguration capability (DC_R) (Barreto, 2010; Knight, 2000; Teece, 2007). Also, business performance is divided into financial (FP) and non-financial performance (NFP). Incorporating entrepreneurship and dynamic capabilities in the same model, the findings of this study will contribute to give a more comprehensive view by showing the entrepreneurship and dynamic capabilities mays explain business performance.
For this purpose, this study examines the structural relationship between entrepreneurship, dynamic capability, and business performance and the moderating role of company type. The data were collected from 209 CEOs of soft and hardware SMEs and analyzed with SPSS 21.0 / WIN and SmartPLS 3.0 statistical package.
Based on previous studies, we propose following hypotheses.
H1: Entrepreneurship has a positive effect on dynamic capabilities.
H1-1: Entrepreneurship has a positive effect on opportunity exploration capability (DC_O) of dynamic capabilities.
H1-2: Entrepreneurship has a positive effect on resource acquisition capability (DC_A) of dynamic capabilities.
H1-3: Entrepreneurship has a positive effect on resource reconfiguration capability (DC_R) of dynamic capabilities.
H2: Dynamic capabilities have a positive effect on business performance.
H2-1: Dynamic capabilities have positive effects on financial performance.
H2-2: Dynamic capabilities have positive effects on non-financial performance.
Figure 1 displays the results of analysis of structural equation modeling (SEM). The findings and summaries are as follows. First, entrepreneurship has a positive effect on DC_O, DC_A, and DC_R. DC_O has a positive effect on NFP, but does not on FP. Second, DC_A has a positive effect on both FP and NFP(Arend, 2014; Wang and Ahmed 2007). Third, the moderating test shows that the relationships between entrepreneurship and dynamic capabilities, and DC_R and FP and NFP are significantly different between across soft and hardware SMEs. This study proposed and examined the entrepreneurship – dynamic capability – business performance framework in SMEs IT context. The findings of this study reveal that entrepreneurship contributes to enhance dynamic capabilities, and in turn increase financial and non-financial performance (Soriano& Dobon, 2009). More importantly, this study integrates entrepreneurship theory and resource-based view and shows that venture firm’s business performance will be maximized when CEOs have a high entrepreneurship and build dynamic capabilities. The findings also shows that in particular, it is very noteworthy that non-financial performance is enhanced by dynamic capabilities. In summary, this study shows that SMEs' entrepreneurship and dynamic capabilities can increase the business performance of companies as the IT industry is fiercely competing with domestic companies as well as international companies (Amazon, IBM, etc.).

• Jee-eun Bae(Addit Co., South Korea)
• Yong-Ki Lee(Sejong University, South Korea) Corresponding author