Entrepreneurial climate as a catalyst for strategic entrepreneurial behavior: Insights from SME managers in the KRI

Vision 2030 in the Kurdistan Region of Iraq (KRI) specifically targets increasing the contribution of small and medium-sized enterprises (SMEs) to gross domestic product. Entrepreneurial activity thrives in emerging markets; however, many firms face barriers in translating entrepreneurial efforts into strategic action. Therefore, fostering strategic entrepreneurial behavior is essential for economic, social, and societal progress. Nevertheless, strategic entrepreneurial behavior remains underexplored in the entrepreneurship literature. The entrepreneurial climate (management support, work discretion, rewards, and time availability) represents a critical asset that SMEs can leverage to access resources from both internal and external networks to address challenges. In turn, the mechanism through which the entrepreneurial climate promotes strategic entrepreneurial behavior remains unclear. Grounded in dynamic capability theory, this article illustrates how entrepreneurial climate influences strategic entrepreneurial behavior. More specifically, the study employed purposive sampling, and data were collected from 617 SMEs located in Duhok, Erbil, Halabja, and Sulaymaniyah in the KRI through a structured survey and analyzed using partial least squares structural equation modeling. The findings demonstrate that entrepreneurial climate (management support, work discretion, rewards, and time availability) positively influences strategic entrepreneurial behavior within SMEs. The article contributes to dynamic capability theory by highlighting how an entrepreneurial climate fosters strategic entrepreneurial behavior that transforms risk into opportunity, offering both theoretical and practical insights into how firms can prosper rather than merely survive in complex environments, thereby supporting the goals of KRI Vision 2030.