Entrepreneurial Orientation and Sustainable Growth of SMEs: The Mediating Role of Resource Allocation Efficiency

Sustainable growth has become an increasingly important strategic objective for entrepreneurial firms facing resource constraints, technological change, and growing environmental and social pressures. Although previous studies have established a positive relationship between entrepreneurial orientation and firm performance, relatively limited attention has been paid to the economic resource allocation perspective through which entrepreneurial orientation contributes to sustainable growth. In particular, the role of efficient resource allocation as a mediating mechanism remains insufficiently examined. Therefore, this study investigates the relationship between entrepreneurial orientation and sustainable growth and examines whether resource allocation efficiency mediates this relationship. Entrepreneurial orientation is conceptualized in terms of innovativeness, proactiveness, and risk-taking, while resource allocation efficiency reflects the effective allocation and utilization of financial, human, and operational resources. Sustainable growth is considered from an integrated perspective encompassing economic, environmental, and social dimensions. A quantitative cross-sectional survey was conducted among startups and small and medium-sized enterprises (SMEs) in South Korea using purposive sampling. Data were collected from 1 June to 30 June 2026. A total of 375 questionnaires were distributed, of which 360 were returned. After excluding 10 questionnaires that did not meet the predefined data-quality criteria, 350 valid responses were retained for the final analysis. The response rate was 96.00%, and the valid response rate based on the distributed questionnaires was 93.33%. Structural equation modeling and bootstrap-based mediation analysis were employed to examine the proposed relationships among Entrepreneurial Orientation, Resource Allocation Efficiency, and Sustainable Growth. The measurement model was assessed through confirmatory factor analysis, composite reliability, convergent validity, and discriminant validity using the Fornell–Larcker criterion and heterotrait–monotrait ratio. Structural equation modeling was subsequently employed to test the hypothesized relationships, and the mediating effect was examined using bootstrapping procedures. The results indicate that entrepreneurial orientation has a significant positive effect on resource allocation efficiency and that resource allocation efficiency has a significant positive effect on sustainable growth. Entrepreneurial orientation also has a significant direct positive effect on sustainable growth. Furthermore, resource allocation efficiency significantly mediates the relationship between entrepreneurial orientation and sustainable growth, indicating a partial mediation effect. These findings suggest that entrepreneurial orientation contributes to sustainable growth not only by encouraging innovation, proactive market behavior, and calculated risk-taking, but also by improving how scarce organizational resources are selected, prioritized, and allocated. This study contributes to the entrepreneurship and sustainability literature by integrating an economic resource allocation perspective into the relationship between entrepreneurial orientation and sustainable growth. The findings suggest that entrepreneurial orientation should not be considered solely as a strategic posture for opportunity exploration; rather, its contribution to sustainability depends partly on the firm’s ability to allocate scarce resources efficiently. The study also provides practical implications for entrepreneurs, SME managers, and policymakers seeking to enhance sustainable growth through entrepreneurial activities and efficient resource utilization.