Conclusion
This study examined the drawbacks of high EO and the moderating role of psychological safety in the relationship between EO and firm performance. While recognizing the positive effects of EO on firm performance, this study also indicates the potential danger associated with an excessive EO and highlights how this drawback can be mitigated. Based on our empirical study involving a sample of 157 SMEs in South Korea, EO has an inverted U-shaped relationship with firm performance, and the psychological safety of employees can mitigate the negative effects of high EO on firm performance. To capitalize on entrepreneurial opportunities and create wealth, firms with high EO need to consider the employees’ psychological safety that moderates the relationship between EO and firm performance.
