The Interplay of Restaurant SMEs’ Entrepreneurial and Environmental Characteristics, Management of the Requisite Assets, and Operational Efficiency

Abstract Background/Purpose: SMEs are subject to different factors in the business environments that influence their business performance. Considering the importance of restaurants’ environmental characteristics, entrepreneurs can also, through their entrepreneurial characteristics, influence SMEsʼ management of the requisite assets (MRA). Accordingly, this study examines the influence of restaurant SMEs’ entrepreneurial (self-efficacy, orientation, and demographics) and environmental (location, size, and competition) characteristics on MRA and, consequently, on SMEs’ operational efficiency. Methods: Primary data relating to the environmental (location, size, and competition) and entrepreneurial (self-efficacy, orientation, and demographic) characteristics were obtained using a survey questionnaire, while the secondary data were obtained from SMEs’ official financial reports. The sample consists of 266 restaurant SMEs in the Republic of Slovenia. Efficiency was analysed using data envelopment analysis (DEA), and structural equation modelling (SEM) was used to test the research model. Results: The results indicate that environmental characteristics have a much more significant impact on MRA than entrepreneurial characteristics. Entrepreneurial self-efficacy and most demographic characteristics (age, gender, education, and experience) proved not to influence significantly MRA and, consequently, SMEs’ operational efficiency. Conclusion: SMEs’ external environment is generally not directly influenced by managerial decisions. Therefore, it is critical to strengthen the influence of the internal environment through an active development of entrepreneurial characteristics, which could result in a more effective MRA and higher efficiency. The conclusion provides suggestions for future research and valuable information for entrepreneurs, academia, and policymakers.