Will there always be a return on investment? The effects of investment in employee development on employee entrepreneurship

Abstract

This study offers a theoretical model of how and when investment in employee development affects employee entrepreneurship. Drawing from the creativity theory of knowledge spillover entrepreneurship, we examined whether employee creativity mediates the relationship between investment in employee development and employee entrepreneurship. We also examined the moderating effects of the institutional environment for entrepreneurship and the corporate entrepreneurial environment on this mediated relationship. Two time-lagged studies were conducted in China to test our hypotheses. Study 1 involved 219 full-time employees from five high-technology companies, and the results showed that investment in employee development was positively associated with employee entrepreneurship through employee creativity. Study 2 replicated this mediation finding with 289 full-time employees from organizations in a variety of industries. The results also showed the moderated mediation effects of investment in employee development on employee entrepreneurship via employee creativity, which was contingent on the institutional environment for entrepreneurship and the corporate entrepreneurial environment. We discuss the theoretical and practical implications of these results for investment in employee development and employee entrepreneurship.