The nonlinear effect of effectuation and causation on new venture performance: The moderating effect of environmental uncertainty

Abstract

Prior researches suggest that there are either positive or negative effect of E&C on new venture performance (NVP). To reconcile the conflicting view, this study proposes the nonlinear relationships between E&C and NVP, and the moderating effect of environmental uncertainty on them. An examination of 407 new ventures data in an emerging economics reveals that while there is a J-shaped curvilinear relationship between effectuation and NVP, there is an inverted U-shaped curvilinear relationship between causation and NVP. Empirical studies also reveal that environmental uncertainty positively moderates the J-shaped curvilinear effect of effectuation on NVP. This study contributes to the literature of E&C-performance linkage in nonlinear perspective and offers a more nuanced view of the relationship between E&C and NVP in environmental uncertainty.