The Interplay of Corporate Entrepreneurship, Knowledge Acquisition, Knowledge-based Resources and SME Performance

This article investigates the circumstances under which corporate entrepreneurship (CE) improves the performance of small-and-medium-sized enterprises (SMEs). Although earlier studies have shown that entrepreneurial behaviour inside established firms can yield competitive advantage, the evidence is mixed once resource constraints, knowledge gaps and environmental uncertainty enter the picture. The authors argue that two knowledge-related factors determine whether CE pays off: first, the firm’s capacity to acquire external knowledge through alliances; second, the breadth and depth of its internal knowledge base. These arguments draw on the knowledge-based view of the firm and on absorptive-capacity theory, both of which stress that innovation benefits emerge when firms combine existing expertise with new information obtained from outside partners.

To test their reasoning, the researchers collected survey data from 160 Portuguese SMEs operating in manufacturing, commerce and services. Chief executives or senior managers answered questions about the intensity of their corporate-entrepreneurial activities, the extent to which recent alliances had furnished useful insight, the richness of their technological and market knowledge, and subjective assessments of recent growth and profitability. Standard control variables included firm age, firm size, sector affiliation and a composite index capturing environmental dynamism, hostility and heterogeneity. All items used five-point Likert scales adapted from validated instruments in the literature. After confirming that common-method bias, non-response bias and multicollinearity were not serious concerns, the authors analysed the data with Partial Least Squares Structural Equation Modelling. This technique is appropriate for sample sizes of around 150 and for models that contain mediated or moderated relationships.

Three hypotheses were evaluated. The first predicts that CE has a direct positive effect on performance. The second posits that knowledge acquisition from inter-organizational alliances strengthens this effect. The third states that the moderating influence of knowledge acquisition itself depends on the level of knowledge-based resources available to the firm, creating a three-way interaction. Results show that CE is indeed associated with higher performance, confirming earlier evidence. More importantly, the interaction terms are both significant and positive. In other words, when SMEs actively learn from their alliance partners, the performance payoff of entrepreneurial initiatives grows. Moreover, this payoff is greatest in firms that already possess extensive internal stocks of technological and market knowledge. Put differently, knowledge acquisition and knowledge stocks complement each other: external knowledge is easier to absorb, recombine and exploit when the receiving organization has a robust knowledge foundation. Conversely, entrepreneurial firms with thin knowledge bases or weak learning routines capture relatively modest benefits from alliances, even if they pursue CE aggressively.

The statistical model explains just over half of the variance in performance, a substantial proportion given the cross-sectional, multi-industry design. Control variables such as firm size, age and environmental turbulence do not alter the main conclusions. Both knowledge acquisition and knowledge-based resources exhibit their own direct positive associations with performance, but the interaction effects underline that the whole is larger than the sum of the parts.

These findings carry several theoretical implications. First, they extend contingency thinking in the corporate-entrepreneurship field by showing that relational and cognitive contingencies matter at least as much as structural or environmental ones. Second, they integrate alliance research with the knowledge-based view, demonstrating that alliances serve not only as channels for resource exchange but as vehicles for translating entrepreneurial intent into measurable results. Third, the study highlights the layered nature of absorptive capacity: potential capacity rises with a richer knowledge base, whereas realized capacity emerges when firms actively access and assimilate external information.

From a managerial perspective, the message is clear. SME leaders who wish to translate entrepreneurial projects into higher growth should cultivate balanced knowledge portfolios. Investment in internal research, customer insight and employee training builds the absorptive foundation. Parallel efforts to establish alliances—whether with suppliers, customers, competitors or academic institutions—provide the complementary flows of novel information. Attention must then shift to routines that integrate the two knowledge streams. Cross-functional teams, rapid-learning cycles and explicit mechanisms for codifying and sharing lessons help ensure that alliance-derived ideas do not remain isolated. Firms that lack a minimal knowledge base may find alliance activities costly and frustrating, because they cannot easily evaluate or exploit the information that partners provide.

The work provides actionable priorities for policy makers and ecosystem builders. Public agencies that sponsor SME innovation programmes could channel resources toward projects that combine alliance formation with capability development, rather than funding either in isolation. Business associations and cluster initiatives can broker relationships that match firms possessing complementary knowledge sets, lowering search and negotiation costs. Universities have a role as neutral knowledge brokers: by co-developing projects with SMEs and facilitating executive education on absorption routines, they enhance the likelihood that external knowledge becomes commercially useful.

Future work could adopt longitudinal designs to trace how specific alliances affect the trajectory of entrepreneurial projects, or examine whether different alliance types—equity joint ventures, buyer–supplier partnerships, digital-platform collaborations—vary in their knowledge benefits. Process studies inside firms would clarify how teams absorb and recombine information, shedding light on micro-level mechanisms that underlie the aggregate effects observed here. It would also be useful to explore boundary conditions such as institutional voids, intellectual-property regimes or digital infrastructure, which may alter the cost–benefit calculus of knowledge acquisition and influence the CE–performance link.

In conclusion, the article shows that corporate entrepreneurship alone does not guarantee improved results for SMEs. Its success rests on the dual engines of alliance-based learning and pre-existing knowledge resources. Managers who invest in both engines, and academics who recognise their interplay, gain a clearer view of how entrepreneurial intentions can be converted into sustained competitive advantage.