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The nonlinear effect of effectuation and causation on new venture performance: The moderating effect of environmental uncertainty

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  • Peng, Xue Bing
  • Liu, Yue Ling
  • Jiao, Qi Qi
  • Feng, Xiao Bin
  • Zheng, Bei

Abstract

Prior researches suggest that there are either positive or negative effect of E&C on new venture performance (NVP). To reconcile the conflicting view, this study proposes the nonlinear relationships between E&C and NVP, and the moderating effect of environmental uncertainty on them. An examination of 407 new ventures data in an emerging economics reveals that while there is a J-shaped curvilinear relationship between effectuation and NVP, there is an inverted U-shaped curvilinear relationship between causation and NVP. Empirical studies also reveal that environmental uncertainty positively moderates the J-shaped curvilinear effect of effectuation on NVP. This study contributes to the literature of E&C-performance linkage in nonlinear perspective and offers a more nuanced view of the relationship between E&C and NVP in environmental uncertainty.

Suggested Citation

  • Peng, Xue Bing & Liu, Yue Ling & Jiao, Qi Qi & Feng, Xiao Bin & Zheng, Bei, 2020. "The nonlinear effect of effectuation and causation on new venture performance: The moderating effect of environmental uncertainty," Journal of Business Research, Elsevier, vol. 117(C), pages 112-123.
    • Handle: RePEc:eee:jbrese:v:117:y:2020:i:c:p:112-123
    DOI: 10.1016/j.jbusres.2020.05.048
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    Cited by:

    1. Fischer, Denise & Greven, Andrea & Tornow, Mark & Brettel, Malte, 2021. "On the value of effectuation processes for R&D alliances and the moderating role of R&D alliance experience," Journal of Business Research, Elsevier, vol. 135(C), pages 606-619.
    2. Katrina M. Brownell & Audra Quinn & Mark T. Bolinger, 2024. "The Triad Divided: A Curvilinear Mediation Model Linking Founder Machiavellianism, Narcissism, and Psychopathy to New Venture Performance," Entrepreneurship Theory and Practice, , vol. 48(1), pages 310-348, January.
    3. Vuorio, Anna & Torkkeli, Lasse, 2023. "Dynamic managerial capability portfolios in early internationalising firms," International Business Review, Elsevier, vol. 32(1).
    4. Sipos, Norbert & Lukovszki, Lívia & Rideg, András & Vörös, Zsófia, 2023. "A vállalkozói döntéshozatali logikák kognitív megközelítése [Entrepreneurial effectuation through the lens of cognitive processes]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(5), pages 544-563.
    5. Deng, Cheng & Yang, Jianjun & Su, Zhongfeng & Zhang, Shuman, 2021. "The double-edged sword impact of effectuation on new product creativity: The moderating role of competitive intensity and firm size," Journal of Business Research, Elsevier, vol. 137(C), pages 1-12.
    6. Cowden, Birton & Karami, Masoud & Tang, Jintong & Ye, Wenping & Adomako, Samuel, 2023. "The gendered effects of effectuation," Journal of Business Research, Elsevier, vol. 155(PB).
    7. Nadia Zahoor & Francis Donbesuur & Arinze Christian Nwoba & Huda Khan, 2023. "Regional expansion of emerging market SMEs: the roles of domestic market environmental uncertainty and international alliance partner diversity," Asia Pacific Journal of Management, Springer, vol. 40(2), pages 613-643, June.
    8. Christopher Idemudia EBEGBETALE & Abdul-Hameed Adeola SULAIMON & Simeon Emezana IFERE, 2024. "Impact of Causation and Effectuation on Competitiveness among Nano Businesses in Nigeria," Management and Economics Review, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 9(1), pages 91-103, February.

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