Moderating Effect of Institutional Pressures on the Relation between Entrepreneurial Orientation and Sustainability Performance of Youth Entreprises in Kenya

Abstract

Youth business initiatives are important contributors to social and economic growth, particularly in developing countries like Kenya. However, their performance in sustainability is subject to both internal strategic orientations and external institutional contexts. This research analyses the impact of entrepreneurial orientation on the sustainability performance of youth enterprises in Taita Taveta, Kenya, while assessing the moderating effect of institutional pressures, particularly the coercive, normative, and mimetic roles. Given the Triple Bottom Line (TBL) model of performance sustainability, whilst the entrepreneurial orientation is assessed in the scope of the sustainable performance of youth enterprises in Taita Taveta, Kenya, concerning the aspects of innovation, proactiveness and risk, autonomy and competitive aggressiveness, the performance is conceived social, economic and environmentally. On the other hand, institutional pressures are considered external factors that may either enhance or limit the influence of entrepreneurial orientation on sustainability performance. This study is based on the positivist philosophy with a deductive reasoning, explanatory research design, and quantitative methodology. The study aims to capture the cause-and-effect relationships. The focus was on the population of 524 youth members from 262 registered youth enterprise groups that fall under the Youth Enterprise Development Fund. Using Yamane’s formula, a sample of 356 was decided, and 303 questionnaires were valid. That gives an 85% response rate. The data was collected using structured, closed-end questionnaires and was analyzed using descriptive and inferential statistics, correlations, multiple regressions, and the PROCESS macro for moderation analysis. There is a strong positive impact of entrepreneurial orientation on sustainability performance. The direct impact of the institutional pressures is positive. From the moderation analysis, it was noted that institutional pressures lower the positive impact of EO on sustainability performance. Theoretically, the paper shows that the sustainability performance of youth enterprises is influenced by the internal entrepreneurial orientation and external institutional contexts, expanding the TBL framework to developing countries. Practically, it proposes that youth enterprise managers and policymakers can improve sustainability performances by managing regulatory requirements and entrepreneurial activities. This framework provides guidance for enterprises to improve the disposal of resources to achieve sustainable development even within the limitations of institutional frameworks, thereby aligning with socio-economic development and the UN SDGs.