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The aim of the paper is to study and propose a model of the effect of entrepreneurial culture on innovation, with the country's relevant institutional framework as a mediator. The model applies to the field of wine industry within the Greek institutional framework.

The research population consists of wineries in Greece. A questionnaire was used to collect the data. Due to the fact that the model includes latent variables and indirect effects, the partial least squares (PLS) algorithm and the SMART-PLS software were chosen to analyze the data. The effect of entrepreneurial culture and institutional framework on innovation was examined as well as the role of institutional framework as a mediator.

It was found that entrepreneurial culture affects innovation positively and statistically significantly. What is more, it was found that the Greek institutional framework affects innovation negatively and statistically significantly. Finally, institutional framework negatively mediates between entrepreneurial culture and innovation, highlighted as a partial mediator.

It is highlighted that it is up to entrepreneurs themselves to succeed. Furthermore, policymakers have to take the necessary measures to improve the external business environment of Greece. Indeed, entrepreneurship can succeed even further if the external environment is favorable.

It is interesting that despite the negative effect of institutional framework on innovation, the indirect positive effect of entrepreneurial culture on innovation is still statistically significant. This means that entrepreneurs who have the right mindset can overcome external barriers.