New venture capability of the transformation from entrepreneurial orientation to new venture's performance: Theory model and empirical study in China

Abstract

Purpose

The gap between the high failure rate and the tremendous growth difference of new ventures has attracted scholars' widespread attention and resulted in the rich research outcomes of entrepreneurial orientation (EO). The purpose of this paper is to present a new construct and build up the conception model “entrepreneurial orientation‐new venture capability‐new venture's performance”.

Design/methodology/approach

This paper, on the basis of evolution economics as well as strategic and organizational theory, adopts the layered multi‐regression method and structure equation model to validate the theory hypothesis about the conception model.

Findings

Through 150 valid samples, this paper validates the dimensions of new venture's EO and new venture capability of China's context, moderating effect of environmental hostility and environmental, and mediating effect of new venture capability. The findings indicate that EO does significantly positively affect new venture performance, but the indirect impact of new venture capability is stronger.

Research limitations/implications

This paper has a few limitations which need to be improved in future study, including developing the time sequence study, expanding the research sample from Tianjin to other Chinese regions, and so on.

Originality/value

The paper's theoretical contributions are as follows: first of all, it points out the construct dimension of EO in the Chinese context; second, it introduces environment factor into Chinese new ventures' EO study; and finally, it constructs an integrated analysis concept based on the capability perspective – the new venture capability, abstracting its dimension and testing its mediator between EO and performance.

Citation

Hu, W. and Zhang, Y. (2012), "New venture capability of the transformation from entrepreneurial orientation to new venture's performance: Theory model and empirical study in China", Nankai Business Review International, Vol. 3 No. 3, pp. 302-325. https://doi.org/10.1108/20408741211264594