Effectuation and Causation as the Mediators of the Relationship between Cultural Value Orientations and New Venture Performance

Abstract

The article presents a theoretical and empirical assessment of the decision-making logic role (effectuation and causation) in the relationship between national culture and new venture performance. The current study makes a theoretical contribution to the venture cognitive logic research stream, considering the characteristics of national culture as antecedents of entrepreneurial reasoning, and performance of new ventures as consequences of two decision-making logic application. The empirical test of the theoretical model was conducted on the basis of 3360 new ventures from 23 countries. The data was obtained from the Global University Entrepreneurial Spirit Students’ Survey (GUESSS) project 2013/2014. National culture characteristics were measured through the Schwartz model of cultural values. The findings showed that decisionmaking logics, effectuation and causation are positively related to new venture performance. Moreover, it was found that effectuation mediates the link between the values of national culture (embeddedness, egalitarianism and harmony) and new venture performance. While causation acts as a mediator in the relationship between autonomy, hierarchy and mastery values and performance of new ventures.