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While scholars have recently started to connect organizational factors in preparing a firm for corporate entrepreneurship to organizational outputs such as financial and innovative performance, there is less understanding of the mechanisms explaining these connections and their boundary conditions. In this vein, this study theorizes how and when Organizational Preparedness for Corporate Entrepreneurship (OPCE) enhances corporate financial and innovative performance. Our observation of 256 firms in the food industry of Iran indicates that OPCE promotes financial and innovative performance through the mediating role of entrepreneurial orientation. Moreover, the relationship between OPCE and organizational outputs is stronger when firms perceive their business environment more dynamic. This provides a better understanding of the way firms can enhance their performance, in particular in the novel context of Iran as a developing country. [ABSTRACT FROM AUTHOR]