How can entrepreneurs achieve success in chaos? The effects of entrepreneurs’ effectuation on new venture performance in China

Abstract

Purpose

This paper aims to explore the mediating role of organizational entrepreneurial capability in the link between entrepreneurs’ effectuation and new venture performance, and whether entrepreneurs’ passion positively moderates this relationship in the Chinese emerging economy.

Design/methodology/approach

This study collected survey data from 140 Chinese new ventures. Following an empirical design, hierarchical regression analysis and bootstrapping analysis were applied to examine six hypotheses.

Findings

Results reveal that organizational entrepreneurial capability plays a positively mediating role in the association between entrepreneurs’ effectuation and new venture performance. Moreover, the whole mediation model is positively moderated by entrepreneurs’ passion, not only the association but also between entrepreneurs’ effectuation and organizational entrepreneurial capability.

Research limitations/implications

The study is limited to the static relationships between key variables using the data obtained at one point in an emerging economy, which cannot investigate the dynamic evolution between variables. More longitudinal designs or cases to track the dynamic association should be considered.

Practical implications

The findings provide useful suggestions for entrepreneurs to enhance their effectual logic and entrepreneurs’ passion to better perceive and exploit opportunities and further improve new venture performance. The results also provide guidance for other groups, such as angel investors and policymakers, regarding how to use effectuation logic as an evaluation criterion to judge whether a new venture or program has investment potential.

Originality/value

These findings enrich the effectuation theory by providing the empirical evidence of the effect of entrepreneurs’ effectuation on new venture performance in an emerging economy. They also provide deeper insights into opportunity research by uncovering the mediating role of organizational entrepreneurial capability in the relationship between entrepreneurs’ effectuation and new venture performance.

Citation

Xia, L., Luo, B. and Sun, Y. (2020), "How can entrepreneurs achieve success in chaos? The effects of entrepreneurs’ effectuation on new venture performance in China", Kybernetes, Vol. 49 No. 5, pp. 1407-1428. https://doi.org/10.1108/K-01-2019-0035