Entrepreneurial Business Tie and Product Innovation: A Moderated Mediation Model

Gang Wang,Linwei Li,Gang Ma

doi:10.3390/su11236628

Gang Wang, Linwei Li + Show 1 more

Open Access

https://doi.org/10.3390/su11236628

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Abstract

Radical innovation has attracted increasing attention in corporate sustainability research. Employing a social capital perspective, we explore how and when entrepreneurial business ties (EBTs) enhance radical innovation by considering risk taking as a critical mediator and environmental turbulence as a conditional factor of the mediation effect. Data is collected from 322 Chinese new ventures. We find empirical support for the moderated mediation model. Specifically, EBT is positively related to risk taking while risk taking is positively related to radical innovation. Risk taking further serves as a mediator in the EBT-radical innovation relationship, and this indirect effect is stronger at a high level of technological turbulence. By revealing how entrepreneurs translate their business ties into positive radical innovation outcomes through risk taking and when this indirect effect is most effective, we enhance understandings of the value of EBT and how to impel radical innovation.

Highlights

Entrepreneurship has been playing a critical role in economic and social sustainability by creating jobs and improving citizens’ quality of life [1,2]
The coefficient and significance of entrepreneurial business ties (EBTs) was greatly reduced (β = 0.15, p < 0.01). These results suggest that risk taking partially mediates the EBT- radical innovation relationship, supporting H3
In light of the importance of radical innovation in corporate sustainability, the intention of this study is to offer an alternative explanation for how entrepreneurial business ties promote corporate sustainability

Summary

Introduction

Entrepreneurship has been playing a critical role in economic and social sustainability by creating jobs and improving citizens’ quality of life [1,2]. Extant emerging economy research has emphasized how entrepreneurs leverage their business connections to manage resources and deal with opportunities [7,8]. While this line of research provides a fundamental picture of how entrepreneurial business ties (EBTs) promote new ventures’ sustainable growth, three questions are still unanswered. Despite the increasing importance of radical innovation in corporate sustainability [9], we know very little about how EBT affects new ventures’ radical innovation. Radical innovation emphasizes that firms develop new products or services involved with novel technologies [11]. When considering the prevalence and importance of EBT [15], radical innovation presents a critical agenda to explore the missing link between EBT and radical innovation

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