Entrepreneurs play a key role in introducing innovations into the market. However, the extant literature has found that the degree of innovation within new ventures varies considerably and that these differences can be related to the individual factors of entrepreneurs. In this article, we go one step further and suggest that the influence of individual factors on innovation is contingent on the institutional context. We use a sample of more than 140,000 entrepreneurs from 101 countries that have participated in the Global Entrepreneurship Monitor (GEM) project between 2005 and 2015. Our results show that individual characteristics of the entrepreneur, such as risk tolerance, entrepreneurial alertness, education and previous entrepreneurial experience, influence innovation in new ventures but that their effect is reinforced by an institutional context with high economic freedom.
AgarwallRAudretschDSarkarMB (2007) The process of creative construction: Knowledge spillovers, entrepreneurship and economic growth. Strategic Entrepreneurship Journal1: 263–286.
2.
AidisREstrinSMickiewiczTM (2012) Size matters: Entrepreneurial entry and government. Small Business Economics39: 119–139.
AnokhinSSchulzeWS (2009) Entrepreneurship, innovation, and corruption. Journal of Business Venturing24: 465–476.
5.
AnokhinSWincentJ (2014) Technological arbitrage opportunities and interindustry differences in entry rates. Journal of Business Venturing29: 437–452.
6.
AreniusPMinnitiM (2005) Perceptual variables and nascent entrepreneurship. Small Business Economics24: 233–247.
7.
AudretschDB (2004) Sustaining innovation and growth: Public policy support for entrepreneurship. Industry and Innovation11(3): 167–191.
8.
AutioEAcsZ (2010) Intellectual property protection and the formation of entrepreneurial growth aspirations. Strategic Entrepreneurship Journal4: 234–251.
9.
AutioEKenneyMMustarPet al. (2014) Entrepreneurial innovation: The importance of context. Research Policy43(7): 1097–1108.
10.
BakerTGedajlovicELubatkinM (2005) A framework for comparing entrepreneurship processes across nations. Journal of International Business Studies36: 492–504.
11.
BarneyJ (1991) Firm resources and sustained competitive advantage. Journal of Management17(1): 99–120.
12.
BaronRA (1998) Cognitive mechanism in entrepreneurship: Why and when entrepreneurs think differently than other people. Journal of Business Venturing13: 275–294.
13.
BaumolWJ (1990) Entrepreneurship: Productive, unproductive and destructive. Journal of Political Economy98(5): 893–921.
14.
BaumolWJ (2002) The Free-Market Innovation Machine: Analyzing the Growth Miracle of Capitalism. Princeton, NJ: Princeton University Press.
15.
BaumolWJ (2010) The Microtheory of Innovative Entrepreneurship. Princeton, NJ: Princeton University Press.
16.
BeckerGS (1964) Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education. Chicago, IL: University Press of Chicago.
CliffJEJenningsPDGreenwoodR (2006) New to the game and questioning the rules: The experiences and beliefs of founders who start imitative versus innovative firms. Journal of Business Venturing21(5): 633–663.
19.
DauLACuerzo-CazurraA (2014) To formalize or not to formalize: Entrepreneurship and pro-market institutions. Journal of Business Venturing29: 668–686.
20.
DavidssonPHonigB (2003) The role of social and human capital among nascent entrepreneurs. Journal of Business Venturing18(3): 301–331.
21.
DavidssonPWiklundJ (2001) Levels of analysis in entrepreneurship research: Current research practice and suggestions for the future. Entrepreneurship Theory and Practice25(4): 81–100.
22.
De ClercqDLimDSKOhCH (2013) Individual-level resources and new business activity: The contingent role of institutional context. Entrepreneurship Theory and Practice37(2): 303–330.
23.
De MassisAFrattinniFPizzurnoEet al. (2015) Product innovation in family versus nonfamily firms: An exploratory analysis. Journal of Small Business Management53(1): 1–36.
24.
DjankovSLa PortaRLópez-de-SilanesFet al. (2002) The regulation of entry. Quaterly Journal of Economics107: 1–37.
25.
EstrinSMickiewiczTStephanU (2016) Human capital in social and commercial entrepreneurship. Journal of Business Venturing31: 449–467.
26.
FooMD (2011) Emotions and entrepreneurial opportunity evaluation. Entrepreneurship Theory and Practice35(2): 375–393.
27.
GaglioCMKatzJA (2001) The psychological basis of opportunity identification: Entrepreneurial alertness. Small Business Economics16: 95–111.
28.
GarudRGehmanJGiulianiAP (2014) Contextualizing entrepreneurial innovation: A narrative perspective. Research Policy43: 1177–1188.
GriffithsMKickulJBacqSet al. (2012) A dialogue with William J Baumol: Insight on entrepreneurship theory and education. Entrepreneurship Theory and Practice36(4): 611–625.
31.
GruberMKimSMBrinckmannJ (2015) What is an attractive business opportunity? An empirical study of opportunity evaluation decisions by technologists, managers, and entrepreneurs. Strategic Entrepreneurship Journal9(3): 205–225.
32.
GujaratiDN (2004) Basic Econometrics (4th edn). New York: McGraw-Hill.
33.
GuoGZhaoH (2000) Multilevel modeling for binary data. Annual Review of Sociology26: 441–462.
34.
GwartneyJLawsonR (2002) Economic Freedom of the World: 2002Annual Report. Vancouver, BC, Canada: Fraser Institute.
35.
HayekFA (1945) The use of knowledge in society. American Economic Review35(4): 519–530.
36.
Hoyos-IruarrizagaJFernández-SainzASaiz-SantosM (2017) High value-added business angels at post-investment stages: Key predictors. International Small Business Journal35: 949–968.
37.
KaishSGiladB (1991) Characteristics of opportunities search of entrepreneurs versus executives: Sources, interests, general alertness. Journal of Business Venturing6(1): 45–61.
38.
KatilaRMangPY (2003) Exploiting technological opportunities: The timing of collaborations. Research Policy32: 317–332.
39.
KatoMOkamuroHHonjoY (2015) Does founders’ human capital matter for innovation? Evidence from Japanese start-ups. Journal of Small Business Management53(1): 114–128.
40.
KimmittJMuñozP (2017) Entrepreneurship and financial inclusion through the lens of instrumental freedoms. International Small Business Journal35(7): 803–828.
41.
KirznerI (1973) Competition and Entrepreneurship. Chicago, IL: University of Chicago Press.
42.
KnightF (1921) Risk, Uncertainty and Profit. New York: Augustus Kelly.
43.
KoellingerP (2008) Why are some entrepreneurs more innovative than others?Small Business Economics31: 21–37.
44.
La PortaRLópez-de-SilanesFShleiferAet al. (1999) The quality of government. Journal of Law, Economics, & Organization15: 222–279.
45.
LeeYS (2018) Government guaranteed small business loans and regional growth. Journal of Business Venturing33: 70–83.
46.
McMullenJSBagbyDRPalichLE (2008) Economic freedom and the motivation to engage in entrepreneurial action. Entrepreneurship Theory and Practice32(5): 875–894.
47.
MarcatiAGuidoGPelusoAM (2008) The role of SME entrepreneurs’ innovativeness and personality in the adoption of innovations. Research Policy37: 1579–1590.
48.
MartinsLLRindovaVPGreenbaumBE (2015) Unlocking the hidden value of concepts: A cognitive approach to business model innovation. Strategic Entrepreneurship Journal9(1): 99–117.
49.
MarvelMRLumpkinGT (2007) Technology entrepreneurs’ human capital and its effects on innovation radicalness. Entrepreneurship Theory and Practice31(6): 807–828.
50.
MassaSTestaS (2008) Innovation and SMEs: Misaligned perspectives and goals among entrepreneurs, academics, and policy makers. Technovation28: 393–407.
51.
MayhewMJSimonoffJSBaumolWJet al. (2012) Exploring innovative entrepreneurship and its ties to higher educational experiences. Research in Higher Education53: 831–859.
52.
MeyerKEEstrinSBhaumikSKet al. (2009) Institutions, resources, and entry strategies in emerging economies. Strategic Management Journal30(1): 61–80.
53.
MillánJMCongregadoERománCet al. (2014) The value of an educated population for an individual’s entrepreneurship success. Journal of Business Venturing29: 612–632.
54.
MillerKD (2007) Risk and rationality in entrepreneurial processes. Strategic Entrepreneurship Journal1(1–2): 57–74.
55.
MuellerSLThomasAS (2000) Culture and entrepreneurial potential: A nine country study of locus of control and innovativeness. Journal of Business Venturing16: 51–75.
56.
NgoasongMZ (2017) Digital entrepreneurship in a resource-scarce context: A focus on entrepreneurial digital competencies. Journal of Small Business and Enterprise Development25(3):483–500.
57.
NorthDC (1990) Institutions, Institutional Change and Economic Performance. Cambridge, MA: Harvard University Press.
58.
ReynoldsPBosmaNAutioEet al. (2005) Global entrepreneurship monitor: Data collection design and implementation 1998–2003. Small Business Economics24: 205–231.
59.
Root-BernsteinRS (1989) Who discovers and invents. Research Technology Management32(1): 43–51.
60.
SarooghiHLibaersDBurkemperA (2015) Examining the relationship between creativity and innovation: A meta-analysis of organizational, cultural and environmental factors. Journal of Business Venturing30(5): 714–731.
61.
SchottTSedaghatM (2014) Innovation embedded in entrepreneurs’ networks and national educational systems. Small Business Economics43: 463–476.
62.
SchumpeterJ (1934) The Theory of Economic Development. Boston, MA: Harvard University Press.
63.
ShaneS (2000) Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science11(4): 448–469.
64.
ShaneS (2001) Technological opportunities and new firm creation. Management Science47(2): 205–220.
65.
ShaneSKhuranaR (2003) Bringing individuals back in: The effects of career experience on new firm founding. Industrial and Corporate Change12(3): 519–543.
66.
ShaneSVenkataramanS (2000) The promise of entrepreneurship as a field of research. Academy of Management Review25(1): 217–226.
67.
SuJZhaiQKarlssonT (2017) Beyond red tape and fools: Institutional theory in entrepreneurship research, 1992–2014. Entrepreneurship Theory and Practice41(4): 505–531.
68.
SuzukiKKimSHBaeZT (2002) Entrepreneurship in Japan and silicon valley: A comparative study. Technovation22(10): 595–606.
ThompsonPKwongC (2015) Compulsory school-based enterprise education as a gateway to an entrepreneurial career. International Small Business Journal34(6): 1–32.
71.
UcbasaranDWestheadPWrightM (2009) The extent and nature of opportunity identification by experienced entrepreneurs. Journal of Business Venturing24: 99–115.
72.
ValliereD (2013) Towards a schematic theory of entrepreneurial alertness. Journal of Business Venturing28: 430–442.
73.
Van LanduytYDewaelheynsNVan HulleC (2017) Employment protection legislation and SME performance. International Small Business Journal35(3): 306–326.
74.
VenkataramanS (1997) The distinctive domain of entrepreneurship research: An editor’s perspective. In: KatzJCrokhausR (eds) Advances in Entrepreneurship, Firm Emergence, and Growth. Greenwich, CT: JAI Press, pp.119–138.
75.
WelterF (2011) Contextualizing entrepreneurship – Conceptual challenges and ways forward. Entrepreneurship Theory and Practice35(1): 165–184.
76.
WennekersSvan StelAThurikRet al. (2005) Nascent Entrepreneurship and the level of economic development. Small Business Economics24: 293–309.
77.
WestheadPSolesvikMZ (2016) Entrepreneurship education and entrepreneurial intention: Do female students benefit?International Small Business Journal34(8): 979–1003.
78.
WrightMHmieleskiKMSiegelDSet al. (2007) The role of human capital in technological entrepreneurship. Entrepreneurship Theory and Practice31(6): 791–806.
79.
ZahraSAWrightMAbdelgawadSG (2014) Contextualization and the advancement of entrepreneurship research. International Small Business Journal32(5): 479–500.
