Strategic Fit Matters: How Family Entrepreneurial Configurations Shape Performance in Coffee and Banana Family Farms in Uganda

Abstract

Smallholder family farms are often depicted as constrained, subsistence-oriented, or pressured to “grow or go.” However, some small family farms outperform others despite operating under similar resource constraints. Using configuration theory, this study examines how family entrepreneurial climate (EC), entrepreneurial orientation (EO), and strategic intentionality (SI) combine to influence performance in coffee and banana family farms, and how these configuration–performance relationships depend on crop system and land rights. Using survey data from 318 smallholder family farms in Kabarole (Uganda), we estimate a latent class model of EC–EO–SI that yields four configurations. Multinomial logit regression shows that coffee family farms are more likely to belong to innovative configuration, while restricted land rights reduce such membership. A control function regression addressing technology-use endogeneity indicates that innovative and deliberate family farms are associated with stronger performance outcomes than conservative reference configuration, especially in coffee farming systems where secure land tenure further enhances these advantages. The findings also challenge the prevailing “grow or go” assumption common in Western agribusiness contexts by showing that small, innovative family farms can achieve high performance and resilience without large-scale expansion, underscoring that strategic fit and innovation, rather than size, drive success in smallholder family farms. We contribute a family configurational and context-theorizing account of smallholder entrepreneurship, contingent on family embeddedness and value chain architecture, and validate importance-weighted subjective performance as a meaningful outcome in family farms.