Entrepreneurial bricolage and innovation: the double-edged sword of knowledge diversity

Abstract

ABSTRACT Innovation is crucial for firm growth but difficult to achieve, especially for resource-constrained firms. The extant literature suggests entrepreneurial bricolage is an adequate action for firms in a resource-constrained environment. Most studies argue that resource-constrained firms engaging in bricolage achieve innovation; however, some studies raise limitations and downsides of entrepreneurial bricolage. Empirical evidence of entrepreneurial bricolage’s impact has resulted in mixed results with no conclusive findings. This study proposes a contingency framework to clarify the impact of entrepreneurial bricolage on innovation exploratory and exploitative by examination of the moderating role of knowledge diversity referring to research on entrepreneurship and innovation management. Our analysis of 172 firms of the cultural and creative industry in Taiwan reveals resource-constrained firms utilising entrepreneurial bricolage simultaneously pursuing exploratory and exploitative innovation with two different conditions of high knowledge diversity. More specifically, knowledge diversity has a positive moderating effect on the influence of entrepreneurial bricolage on exploratory innovation, but it has a negative moderating effect on the influence of entrepreneurial bricolage on exploitative innovation. In addition, this study finds that entrepreneurial bricolage can help resource-constrained firms in generating new knowledge to explore and exploit opportunities from the available resources, but this can succeed only to a certain extent.