Entrepreneurial orientation, organisational performance, innovation, gender, and corporate governance in family businesses: a mediation and moderation model

This study examines the mediating role of innovation (INN) in the relationship between entrepreneurial orientation (EO) and organisational performance (PER) in Ecuadorian family businesses. It also incorporates the moderating effects of gender diversity and corporate governance. A PLS-SEM structural equation model was applied to data from 317 family businesses of various sizes and sectors in Ecuador. The validity of the measurement model was assessed through an analysis of convergent and discriminant validity (Fornell-Larcker criterion and HTMT ratio), and the hypotheses were tested with bootstrapping (5,000 subsamples). The results indicate a positive and significant direct relationship from EO to innovation and from innovation to performance. However, the direct path from EO to organisational performance was not significant. Crucially, it was found that innovation significantly mediates the relationship between EO and organisational performance, specifically demonstrating a partial indirect-only mediation. Neither gender diversity nor corporate governance significantly moderated the direct relationship between EO and organisational performance. The model explained a considerable variance in innovation and a modest variance in organisational performance, demonstrating predictive relevance. The study provides new evidence from the Latin American context by demonstrating that innovation is the main channel that translates entrepreneurial orientation into organisational outcomes in family businesses, while gender and governance factors do not have a direct moderating role. These findings reinforce the need to prioritise innovation strategies as a critical way to capitalise on entrepreneurial potential in environments with emerging institutional structures.