Effectuation and causation, firm performance, and the impact of institutions: A multi-country moderation analysis

Galina Shirokova, Michael H. Morris, Anastasiia Laskovaia, Evelyn Micelotta

Research output: Contribution to journalArticlepeer-review

Abstract

Entrepreneurs employ various behavioral logics in the venture creation process, including effectuation and causation. Where prior studies suggest that both causal and effectual approaches are positively related to firm performance, the extant literature has not examined how the institutional context influences this relationship. This study explores how country-level institutions moderate the link between causal and effectual behaviors and firm performance. Using survey data collected from a large crosssectional sample of new ventures from 24 countries, the findings indicate that the effectiveness of causation and effectuation logics is influenced by the level of development of regulatory, normative, and cultural-cognitive institutions. The theoretical benefits of better understanding the context of entrepreneurial decision-making are highlighted.

Original languageEnglish
Pages (from-to)169-182
Number of pages14
JournalJournal of Business Research
Volume129
DOIs
StatePublished - May 2021

Scopus subject areas

  • Marketing

Keywords

  • Causation
  • Effectuation
  • Firm performance
  • GUESSS
  • Institutions

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