The Mediating Role of Entrepreneurial Orientation on the Knowledge Creation-Firm Performance Nexus: Evidence from Indonesian IT Companies

Disruptive innovation has created fast changes in the business environment and competition among companies, especially on information technology companies. Knowledge creation and entrepreneurial orientation are two variables that can improve firm performance.There is still limited study on how knowledge creation and entrepreneurial orientation both affects firm performance.This study aims to discuss how to effectively apply knowledge creation and entrepreneurial orientation to develop firm performance.A questionnaire has been conducted to 55 medium-large IT companies in Jakarta, Indonesia, and analyzed using structural equation modeling (SEM).The result showed that knowledge creation did not directly affect firm performance but indirectly affected entrepreneurial orientation.Knowledge creation also had a positive and significant effect on entrepreneurial orientation, and so does entrepreneurial orientation towards firm performance.Therefore, IT companies should consider both variables to improve their performance.Future studies may consider using qualitative or mixed-method approaches, conducting research for small IT companies and in other countries.