This analysis reveals prospect theory's impact on strategic responses in SMEs, suggesting motivation plays a key role in resource allocation decisions.
Key Points
This research investigates how SMEs balance high-risk initiatives with low-risk responses amid resource constraints.
Survey data from 300 Korean SME executives analyzed using PLS-SEM and segmented regression.
The study distinguishes between loss-domain and gain-domain based on perceived capabilities.
SMEs in the loss domain take more strategic actions through increased awareness and motivation.
In the gain domain, perceived capability advantage doesn't always lead to tactical responses.
Findings challenge threat-rigid theory by showing diverse responses to competitive threats.