Entrepreneurial orientation in turbulent environments: The moderating role of absorptive capacity

• Entrepreneurially oriented firms outperform their rivals.
• Absorptive capacity is a dynamic capability important for entrepreneurial firms.
• Absorptive capacity is a moderator particularly important when market turbulence is high.

The literature on entrepreneurial orientation (EO) has confirmed the positive relationship between EO and firm performance and that relationship's dependence on several contingencies. The present study connects the resource-based view and its dynamic capability extension to introduce absorptive capacity (ACAP) as a moderator of the relationship between EO and firm performance. This theoretically derived research model is empirically validated using survey data from 219 small and medium-sized enterprises in Germany. Our empirical findings are that ACAP strengthens the EO–performance relationship in turbulent markets.