Innovations and sales growth in new ventures: The mediating effect of growth intention

Abstract

While the direct influence of innovation on growth has been examined in the entrepreneurship literature, the underlying channels of influence have remained largely unexplored. This article draws upon behavioral reasoning theory to examine whether growth intention is the pathway through which product, process and organizational innovations influence venture growth. Results from the analysis of a dataset of 20,472 French new ventures reveal that: (1) product, process and organizational innovations have a positive impact on sales revenues growth; (2) growth intention has a positive impact on sales revenues growth; and (3) growth intention mediates the effects of innovations on sales revenues growth. These findings have implications for a more balanced and nuanced view on how innovations impact new venture growth.