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Building on social cognitive theory and self-determination theory, this study aims to discern the innovative work behaviors of organizational employees as the process by which they generate, develop and implement new and valuable ideas, practices, products or procedures shaped by entrepreneurial leadership by reinforcing intrinsic motivation and creative self-efficacy under the boundary condition of a firm’s innovative climate.

This study used partial least squares-based structural equation modeling on a sample of 203 employees of small and medium-sized enterprises operating in Saudi Arabia.

This study found that entrepreneurial leadership improves employees’ innovative work behavior by successively enhancing their intrinsic motivation and creative self-efficacy. Furthermore, the analysis confirmed that a firm’s innovative climate significantly moderates the strength of the indirect mediation effect between entrepreneurial leadership and employees’ innovative work behavior through sequential mediation.

The findings of this study yield substantial theoretical and practical implications resulting from a fine-grained understanding of the instrumentality of entrepreneurial leadership in fostering employees’ innovative work behavior. Effectively orchestrating these psychological mechanisms could enable entrepreneurial leaders to alleviate their behaviors.

This is an original study that outlines the importance of aligning entrepreneurial leadership and an innovative climate to shape intrinsic motivation and creative self-efficacy in employees’ innovative work behavior. It demonstrates how entrepreneurial leadership enhances innovative work behavior through the sequential mediation of intrinsic motivation and creative self-efficacy under the boundary condition of an innovative climate.