Many roads lead to Rome: How improvisation and absorptive capacity affect entrepreneurial orientation and new venture performance relationship

Abstract

This paper develops and tests a model that highlights the roles of improvisation and absorptive capacity as important mediating mechanisms through which entrepreneurial orientation (EO) influences new venture performance. Furthermore, we examine the interactive effect of improvisation and absorptive capacity on new venture performance. The results show that (a) improvisation and absorptive capacity both mediate the relationship between EO and new venture performance; (b) the interaction between improvisation and absorptive capacity is positively related to new venture performance; (c) improvisation moderates the indirect relationship between EO and new venture performance via absorptive capacity; and (d) absorptive capacity moderates the mediation of improvisation in the relationship between EO and new venture performance. With these findings, this paper provides insights into how different learning modes can enhance the EO-performance relationship.