14 Cognitive Determinants of Firm Innovativeness

1 Cognitive determinants of firm innovativeness Ana Domínguez-Quintero1, José Fernández-Serrano1, Inmaculada Jaén1, Francisco Liñán1 * and Gökhan Önder2 1 University of Seville 2 Anadolu University Abstract Innovative firms make a substantial contribution to economic growth, wealth and employment creation. For this reason, it is interesting to understand what makes some entrepreneurs start and develop innovative firms. In this chapter, we focus on the cognitive process of the entrepreneur as a potentially relevant explanatory element. In particular, we analyse three cognitive variables: perceptions about the institutional environment, about the self, and motivations. The proposed model is tested on a sample of 2474 entrepreneurs with different levels of innovativeness of their businesses. The sample comes from the Global Entrepreneurship Monitor (GEM) Adult Population Survey for Spain in 2020. The results confirm the relevance of cognitive variables in explaining the innovativeness of the entrepreneurs’ firms. The present study contributes to a more thorough understanding of the cognitive mental process of innovative entrepreneurs. It also provides some interesting practical implications for entrepreneurial support centres. Keywords: Cognitive process, entrepreneurship, innovation Acknowledgment This study is part of a larger project on ICTs in entrepreneurship (https://www.researchgate.net/project/ICTs-and-innovative-enterprises-a-gender-analisis) and has benefitted from the funding from the Spanish National R+D Plan (Ministerio de Ciencia, Innovación y Universidades. Ref.: PID2019-110166GB-I00). 1. Introduction The importance of innovative enterprises cannot be overestimated. They have been found to exert a much higher influence on economic growth than their less innovative counterparts (Wong, Ho and Autio, 2005). For this reason, a rich stream of research has analysed the determinants of the innovation level of firms (Raza, Muffato and Saeed, 2019). In this view, general small businesses are considered Kiznerian enterprises, and opposed to the innovative or Schumpeterian enterprises (Aghion et al., 2009). Schumpeterian firms introduce new disruptive technology or business models, grow larger and are more prone to exporting (Szerb et al., 2019). In this way, they have a more positive impact on production and employment at their regional level. * Corresponding author. All the authors have made a similar contribution to this chapter and are listed in alphabetical order. 2 Some works have stressed the relevance of an entrepreneurial ecosystem that is well-developed and supports the innovative activities of firms (Szerb et al., 2019). The conditions for the development of entrepreneurial activity at the local or regional level are undoubtedly a reflection of the institutional context. North (1990) defines institutions as the rules of the game guiding the behaviour of individuals and providing the structure of incentives to the agents, reducing transaction problems. Formal institutions are the set of political, economic and regulatory rules that exists in a society, and serves to facilitate exchange (Fuentelsaz, González and Maicas, 2019). Meanwhile, informal institutions are the norms and established forms of behaviour that have been transmitted through culture (North, 1990). In this line, studies have shown that national culture is a relevant variable in explaining countrylevel entrepreneurial activity rates (Liñán and Fernández-Serrano, 2014; Hechavarria and Reynolds, 2009). Autio et al. (2013), in turn, find national culture to affect not only entry behaviours, but also post-entry aspirations of entrepreneurs. In this respect, informal institutions such as culture exert an influence on individual perceptions through several mechanisms (Stephan, 2022). In particular, Raza et al. (2019) have found these institutions to affect individual-perception influence on innovative entrepreneurship. Nevertheless, their emphasis was more on institutions than in perceptions, which was measured through a single construct. It is precisely on individual perceptions and the corresponding cognitive mechanisms where we place the main focus of the present research. The specialised literature has proposed a multidisciplinary approach that links economic, psychological and sociological factors to analyse the complexity of business creation and the entrepreneurial behaviour of individuals. A framework of study is thus built in which the final decision to create a company or the performance of certain behaviours - such as innovation - can be analysed by means of a series of determinants that help to understand the cognitive processes of the entrepreneur (Raza et al., 2019). This line of research aims at providing answers to the questions of why some people identify opportunities and others do not; why some decide to take advantage of those opportunities and others do not; or why they carry out certain behaviours or tasks -such as innovation- and others do not (Shane and Venkataraman, 2000). This paper, following the entrepreneurial cognitive perspective, attempts to contribute to the understanding of some key aspects of innovation. Entrepreneurs capture the influence of the external environment through their perceptions and motivations, generating attitudes that determine their behaviours (such as innovativeness) (Fernández et al., 2009). Specifically, the main objective of the present chapter is to analyse the role of perceptions and motivations (two relevant cognitive variables) on the development of innovative behaviour in firms. Our proposal is in line with other works that consider the importance of individual perceptions (Liñán, Santos and Fernandez, 2011; Amorós, Cristi and Naudé, 2021). Therefore, the results from this chapter allow a more comprehensive understanding of how entrepreneurial cognitions affect the creation and development of innovative (Schumpeterian) enterprises. 2. Theoretical background: perceptions and firm innovativeness The cognitive approach has acquired great relevance in explaining entrepreneurial behaviours (Krueger, Reilly and Carsrud, 2000; Arenius and Minniti, 2005). In this sense, the influence of authors such as Bandura and Ajzen have been very important for the development of this research. Ajzen (1991) proposed the theory of planned behaviour (TPB) to state that intentions capture the motivational factors influencing behaviour. This cognitive approach studies how thinking develops and how the mind works when it acquires and interprets the information it receives. It analyses how the brain processes the impulses and information that the entrepreneur 3 receives from his or her environment. According to this framework, people acquire information, store it, transform it and use it to perform different tasks, such as making decisions or solving problems (Mitchell et al., 2002); therefore, behaviours are a consequence of environmental stimuli, feedback processes and observational learning (Liñán and Fayolle, 2014). In other words, the cognitive approach emphasises the fact that everything we say or do as human beings is influenced by mental processes, such as motivation, perceptions or attitudes (Krueger, 2003). In this framework, entrepreneurial cognitions are the knowledge structures that people use to make evaluations, judgements or decisions involving opportunity assessment, business creation and entrepreneurial growth (Mitchell et al., 2002). Perceptions are mental representations of the external environment surrounding individuals, captured through their senses and elaborated in their mind (Fernandez et al., 2009). In the entrepreneurship literature, perceptions are one of the most important cognitive factors in entrepreneurial intention and behaviour (Shaver and Scott, 1991). In addition, the cognitive approach analyses cognitive biases and heuristics (Baron, 1998; De Carolis and Saparito, 2006). Mental representations may differ between individuals due to the presence of different cognitive biases (Fernandez et al., 2009). According to Baron (1998) there is a tendency to make errors of judgement when facing complex problems with incomplete information. In this sense, under conditions characterised by high uncertainty and time pressure -typical in the entrepreneurial context-, there is a high susceptibility to various cognitive biases (Busenitz and Barney, 1997). Thus, when performing the behaviour, the essential element is the individual’s belief that (s)he possesses the necessary knowledge or skills or that her/his motivation and predictions are adequate, even if those perceptions are not entirely correct (Fernandez et al., 2009). Therefore, the focus on individual level perceptions is justified, since it is the personal perceptions about the environment that are relevant for the individual to make their decisions (Autio et al. 2013; Liñán et al. 2016). The use of individual-level perceptions of culture has been advocated (McCoy et al. 2005; Shinnar et al. 2012) because individuals perceive the context very differently from one another, even in one single country (García-Cabrera and García-Soto 2008; Jaén and Liñán 2013; Leung and Morris 2015). In particular, following the widely accepted distinction between formal and informal institutions (North, 1990), we will focus on perceptions about culture and about the context conditions for entrepreneurship. Additionally, we will also consider self-perceptions about the entrepreneurial skills individuals believe they possess. Finally, given the importance attached to motivations in entrepreneurship (Fayolle, Liñán and Moriano, 2014), we will take into account the role of motivations as a cognitive element affecting innovative entrepreneurship. 2.1. Perceptions about the entrepreneurial culture and context Culture has received considerable attention as a highly relevant influence on entrepreneurship (Krueger et al. 2013, Welter 2011). Culture can be defined as a set of shared beliefs, values, and expectations (Hayton et al. 2002). Hofstede (2003, p. 9) defines culture as "the collective programming of the mind that distinguishes members of one group or category of people from another". It has been well-established that the cultural context influences the formation of entrepreneurial intentions (Shinnar et al. 2012; Siu and Lo 2013) and actual entrepreneurial behaviour (Hayton et al. 2002; Stenholm et al. 2013; Thornton et al. 2011). In this regard, the Global Entrepreneurship Monitor (GEM) studies have shown how the cognitive factors that drive entrepreneurial behaviours can be reinforced by the positive social perceptions of entrepreneurship (a part of the country culture). A culture can be more or less 4 supportive of entrepreneurship and entrepreneurial activity (Kibler et al., 2014). An entrepreneurially supportive culture is one in which entrepreneurial activity is seen as legitimate and desirable. It will therefore lead to more people engaging in entrepreneurial activity (Mueller and Thomas 2001). Personal perceptions of culture are the relevant ones for each particular individual to engage in a certain behaviour (Autio et al. 2013; Liñán et al. 2016). The literature on entrepreneurship has also studied the influence of cultural and sociological aspects on opportunity recognition through cognitive mechanisms. Culture can influence entrepreneurship and entrepreneurial behaviours both through social legitimation and through the promotion of certain positive attitudes in individuals (Etzioni, 1987; Davidsson, 1995; Liñán and Santos, 2007; Fernández et al., 2009; Liñán, Jaén and Martín, 2022). The perception of an entrepreneurial culture is an antecedent to other perceptions. In general, the literature argues that cognitive schemas derived from an entrepreneurial culture can help entrepreneurs in several aspects. These include reducing the uncertainty involved in deciding and identifying ideas and opportunities (McGrath et al., 1992; Mueller and Thomas, 2001; Wennekers et al. al., 2005; Mitchell et al., 2002; Busenitz and Lau, 1996). Empirical research has established statistically significant correlations and attributed causality between national culture and economic development and innovation (Smale, 2016). According to Frederick and Chittock (2006), Hofstede (2001) or Shane (1995), national culture plays an important role in the effectiveness of the innovation process. Meanwhile Rank, Pace and Frese (2004) or Pohlmann (2005) note that creativity and innovation are culturally moderated responses to environmental stimuli. These factors may explain the impact of the cultural factor on perceptions of both skills and opportunities. Culture favours the development of certain personality traits and motivates individuals to perform certain behaviours that may not be obvious or desirable in other societies (Mueller and Conway Dato-on 2013). Similarly, the cultural dimension of uncertainty avoidance captures a society's tolerance for uncertainty and ambiguity. Societies with high levels of uncertainty avoidance are strongly structured with strict laws and rules to minimise the possibility of ambiguous situations. In turn, innovation involves a long and uncertain process with a high probability of failure (Holmstrom 1989). For this reason, a positive perception about the entrepreneurial culture will be seen as permeating to the economic conditions in the country. That is, there should be a strong connection between formal and informal institutions (North, 1990), If informal institutions are perceived as supportive of entrepreneurship, the individual is more likely to see a congruent system of formal institutions, leading to perceiving a more favourable economic context. H1a. The perceived entrepreneurial culture is positively related to perceived economic conditions for entrepreneurship Cultural variables, as perceived by the individual, are likely to affect self-perceptions regarding entrepreneurial skills (Davidsson 1995; Mazzarol et al. 1999; Delmar and Davidsson 2000; Thomas and Muller 2000; Kennedy et al. 2003). The perceived social valuation of entrepreneurship influences entrepreneurial intention, and the motivational factors that determine it. Since culture reinforces certain personal characteristics and penalizes others (Thomas and Muller 2000), the underlying system of values peculiar to a specific group or society would shape the development of certain personality traits and capacities, modelling the ability perceptions towards the entrepreneurial activity (Liñán, 2008). In particular, since innovative entrepreneurship probably involves higher complexity and risk (Boubakri et al., 2021), this effect will probably be stronger in the case of entrepreneurs with an innovative firm. H1b. Perceived entrepreneurial culture is positively related to self-perceived entrepreneurial skills. 5 Authors, such as Wennekers et al., 2002, have analysed how the general evolution of individuals' expected economic or entrepreneurial opportunities has a macroeconomic effect on the aggregate level of entrepreneurial intentions and on the overall rate of business creation (Wennekers et al., 2002). In particular, individuals will tend to exhibit entrepreneurial intentions and behaviour as a function of their cognitive process and their perceptions of the existence of economic opportunities, regardless of the realism of these perceptions (Arenius and Minniti, 2005). Therefore, the perception that there are generally good and easy-to-exploit opportunities in the market contributes to the entrepreneurial decision, promoting the emergence of new innovative goods and services (Fernandez et al., 2009). In this sense, we propose the following hypothesis. H2. The perceived entrepreneurial context conditions are positively related to the innovativeness of the firm. 2.2. Perceptions about entrepreneurial skills Perceptions of entrepreneurial skills indicate how confident respondents are that they possess a sufficiently high level of certain entrepreneurship-related skills. The literature on entrepreneurship states that those who feel they have a higher level of these entrepreneurial skills are likely to feel that they can start a business (Fernández et al., 2009). Furthermore, it could be argued that a high self-perception regarding entrepreneurial skills would also be associated with more favourable attitudes towards dynamic entrepreneurial behaviours (Chen et al. 1998). Similarly, individuals who believe they possess entrepreneurial skills are likely to have a more positive view of the existence of opportunities in the environment. That is, they will show a higher level of alertness that will lead them to recognise more and better opportunities (Singth et al., 1999). Individuals with broader knowledge and skills can leverage them to identify a greater number of opportunities (Ucbasarn, Westhead and Wright, 2008). Their entrepreneurial skills will therefore help them to take greater advantage of the economic context around them. H3: Self-perceived entrepreneurial skills are positively related to the perceived entrepreneurial context conditions. There is an obvious connection between skills and behaviours (Boyd and Vozikis 1994; Chen et al. 1998; De Noble et al. 1999; Delmar and Davidsson 2000). Having entrepreneurial skills makes people feel more capable of starting a business (De Noble et al. 1999). Entrepreneurial competences are often psychological or social skills (Taatila, 2010) and include important attributes such as leadership, the ability to identify opportunities, creativity, innovation, analytical skills, negotiation, communication, problem solving, exposure to technological change, flexibility and adaptability, critical thinking, networking and teamwork skills, among others (Henry et al., 2004; Jack and Anderson, 1999; Jones and Penaluna, 2013; Rae, 1997; Ronstadt, 1990; Solomon et al., 2002). These skills lead not only to the identification of a greater number of entrepreneurial opportunities, but also to the identification of higher quality opportunities (Shepherd and DeTienne, 2005; Souitaris et al., 2007). The skills that individuals believe they have help them feel more prepared to achieve their goals and to face potential obstacles. Because of this higher self-confidence, they are more likely to decide to initiate innovative projects. H4. Self-perceived entrepreneurial skills are positively related to the innovativeness of the firm. 6 2.3. Entrepreneurial motivations Initial studies on the cognitive approach to entrepreneurship focused on motivation (Collins and Moore, 1964; McClelland, 1961 Carsrud and Brännback, 2011). There are essentially two perspectives in motivational theories: one based on economics and one based on psychology (Fisher, 1930), which attempt to answer three questions: What activates a person? What makes an individual choose one behaviour over another? Why do different people respond differently to the same motivational stimuli? (Carsrud and Brännback, 2011). Motivation is the set of reasons that determines individuals to engage in a certain behaviour, e.g., starting a business (Scott, Locke and Collins, 2003). Motivation has been defined as the purpose or psychological cause of an action (Schacter et al. 2011). Motivation helps to describe the process that leads people to engage in entrepreneurial behaviour (Naffziger et al., 1994). Business creation and other entrepreneurial behaviours can be the result of a wide range of motivations (Bhola et al., 2006; Hechavarría and Reynolds, 2009; Kirkwood, 2009). In this sense, several entrepreneurship researchers have collected this variety of motives and classified them into two main groups following the approaches of the push-pull theory or the more current concepts of need and opportunity motivations, developed by the GEM. The origins of the pushpull theory as an explanation of the relationship between motivation and entrepreneurial behaviour can be traced back to the work of Oxenfeldt (1943) and Johnson and Darnel (1976). Nowadays, the ability to bring together in a simple and coherent way the various profiles of entrepreneurs, together with the systematic use in the GEM reports, have contributed to the popularity of the concepts of opportunity and necessity entrepreneurship which is assimilated with the aforementioned pull-push terminology (Acs et al., 2008; Hessels et al., 2008; Gurtoo and Williams, 2009). Pull theory is also called 'incentive theory' based on the idea that individuals develop one type of behaviour or another in pursuit of self-satisfaction and intrinsic rewards (Carsrud and Brännback, 2011). Other authors claim that motives are based on the existence of internal stimuli in individuals that guide their behaviour (Carsrud and Brännback, 2011; Fayolle et al., 2014). This approach argues that individuals have intrinsic drives that generate internal tensions, which motivate them to act. Thus, pull factors attract individuals to proceed with starting a new business. On the other hand, push determinants are those factors that impel individuals to become entrepreneurs because they see it as the only way, an obligation, or the like. Of course, it is possible for the same person to manifest both motivations when deciding to start a new business (Solymossy, 1997; Giacomin et al., 2007; Block and Sandner, 2009). However, several studies point to the desire for autonomy and independence as one of the key pull factors to explain business creation and entrepreneurial behaviour (Birley and Westhead, 1993; Guzman and Santos, 2001). In relation to the influence of perceived competences on motivation, a positive relationship can be argued. That is, the higher the degree of perceived entrepreneurial skills, the higher the pull motivation for entrepreneurial action (Lee et al., 2005), and correspondingly, the lower the push motivation will be. Farhangmehr, Gonçalves and Sarmento (2016) propose a model where the knowledge base and entrepreneurial competencies are antecedents of entrepreneurial motivation. Furthermore, they propose that entrepreneurship education has a moderating effect on the relationships represented in the model. Several studies have suggested that those who attend courses where entrepreneurial skills are developed show a higher propensity and motivation to engage in new business creation (Lee et al., 2005; Peterman and Kennedy, 2003; Souitaris et al., 2007). Possession of entrepreneurial skills has a positive effect on entrepreneurial motivation (Lee et al., 2005; Farhangmehr, Gonçalves and Sarmento, 2016). Therefore, we hypothesize the following: 7 H5a: Self-perceived entrepreneurial skills are positively related to the pull motive toward entrepreneurship. H5b: Self-perceived entrepreneurial skills are negatively related to the push motive toward entrepreneurship. Motivation influences entrepreneurial behaviours both before and after the start of the entrepreneurial activity (Ajzen 1991; Herron and Robinson, 1993; Krueguer and Casrud, 1993; Guzman and Santos, 2001). Thus, it is possible to consider that different types of motivation will generate different entrepreneurial behaviours. At the micro level, research has shown that motivation can have consequences for the way a firm is managed and for firm performance itself. For example, several empirical studies have shown that necessity entrepreneurs seem to be less satisfied than opportunity entrepreneurs, which has an impact on their personal performance (Galbraith and Latham, 1996; Block and Wagner, 2007; Block and Koellinger, 2009; Kautonen and Palmroos, 2010). This may explain why, at the firm level, empirical results show that necessity entrepreneurs perform less well than opportunity entrepreneurs (Amit and Muller, 1995; Solymossy, 1997; Vivarelli, 2004). Also, at the macroeconomic level, several studies that have applied GEM statistics seem to confirm that opportunity motivation has a more positive impact on countries' economic growth and job creation (Wennekers et al., 2005; Wong et al., 2005). Entrepreneurs with pull motivation attempt to carry out more difficult tasks, achieve more conceptual learning, strengthen their creativity, are more persistent in their entrepreneurial behaviours and have an inclination towards positive emotions. Thus, several studies seem to confirm that pull motivation has a greater effect on the growth and development of firms than is the case for the necessity motivation (Amit and Muller, 1995; Solymossy, 1997; Vivarelli, 2004). Individuals with pull motivations seek opportunities, show initiative, take action and persevere until they achieve the changes they desire (Bateman and Crant, 1993). This means not only seizing opportunities to improve situations but also creating opportunities (DeTienne, Shepherd and De Castro, 2008). Thus, we propose the following hypothesis. H6a: The pull motive toward entrepreneurship is positively related to the innovativeness of the firm. H6b: The push motive toward entrepreneurship is negatively related to the innovativeness of the firm. To conclude this section and summarise the hypotheses we propose, Figure 1 presents the research model that will be tested in the empirical section of this chapter. 8 Figure 1: Research model and hypotheses 3. Methodology 3.1. Sample and Data Collection We have used GEM data for this research (GEM, 2020). The GEM data are obtained from two different sources: the Adult Population Survey (APS) and the National Expert Survey (NES). While the NES includes the evaluations of the experts on the entrepreneurship ecosystem of the corresponding country, the APS data used in this research collects responses from individuals in the country about a number of variables including the country's entrepreneurial culture and context, their motivations and attitudes towards entrepreneurship, and whether they have the necessary skills to be an entrepreneur. APS data is obtained by GEM through face-to-face, phone calls, and online participation. For Spain, the GEM APS database for 2020 consists of 26.075 individuals; 2.474 of them are already new or consolidated entrepreneurs and form our research sample. The selection of one single country allows us to control for the real institutional conditions in the country which, by definition, are the same for all respondents. The descriptive statistics for the sample and the regions where the data were collected are given in Table 1 and 2. As seen in Table 1, 55% of the participants are men, 45% are women, and 85% are over 36 years old. About 26% have an university education (graduate or postgraduate level), around half of the participants providing information about socioeconomic status are in the upper income group. There are participants from 19 different regions in the research sample. Andalusia, Catalonia, and Galicia are the regions with the highest participation, 78% of the participants live in urban areas. The research considered urban areas those localities with a population of more than 5.000 inhabitants (Dijkstra et al., 2020). Personal perceptions Environmental perceptions Motivations Perceived Entrepreneurial Context Personal Skills Perceived Culture Innovation H1b H3 H4 H5a H2 Pull Motive Push Motive H1a H5b H6a H6b 9 Table 1. Descriptive Statistics for the Sample Percentage Number of Obs. Gender Female 45 1123 Male 55 1351 Total 100 2474 Age 18-35 15 366 36-55 57 1418 56-Older 28 690 Total 100 2474 Education Level Pre-primary and Primary 19 465 Lower-Upper-Post Second 55 1316 Bachelor's, Master's, and Doctorate 26 636 Total 100 2417 Income Level Lowest third 28 444 Middle third 25 398 Upper third 47 747 Total 100 1589 Table 2. Regional Statistics of the Sample Region Percentage Number of Obs. Andalusia 19.24 476 Catalonia 9.30 230 Galicia 8.33 206 Basque country 7.64 189 Madrid 6.35 157 Aragón 5.98 148 Cantabria 5.13 127 Canary Islands 4.77 118 Balearic Islands 4.73 117 Navarra 4.73 117 Asturias 4.32 107 Castilla La Mancha 3.84 95 Extremadura 3.76 93 Rioja 3.40 84 Valencia 3.31 82 Murcia 2.75 68 Castilla y León 1.82 45 Melilla 0.49 12 Ceuta 0.12 3 Total 100 2474 16 the model, in line with previous research (Liñán, 2008). They not only have a direct effect of 0.052 on the firm innovativeness, but also an almost equally relevant indirect effect (through economic context and motivations) of 0.044. Therefore, the need for entrepreneurs to develop the necessary skills and become aware and build trust on their own abilities is established. The most important contribution of this chapter, therefore, lies in shedding light over the internal relations between the different perceptions and motivations that form the cognitive structure of the entrepreneur, and how they affect the innovativeness of the resulting firm. According to our results, based on a large sample of entrepreneurs, more favourable perceptions about the institutional context, and the self, together with the entrepreneurial motivation, are important in explaining the level of innovation of the venture. As a relevant implication from these results, policy-makers and entrepreneurial support advisors should emphasize the relevance of entrepreneurs having the skills needed to launch an innovative venture, and that they also build the necessary confidence and self-awareness of their own abilities (De Noble et al. 1999). Of course, not all would-be entrepreneurs have this profile. To help them, specific training on innovation management and business development is important. In this way, they can develop the skills needed for innovation and growth. At the same time, they will be conscious of possessing these skills. Additionally, the building of a supportive ecosystem that is rich in (both tangible and intangible) resources, which will help entrepreneurs find partners, funders and advisors specialized in innovation is also important. As those entrepreneurs become aware of the available resources, they will perceive a more favourable economic context. Based on our findings, support centres, incubators and accelerators should provide this training and, at the same time, focus on those who are more clearly geared by a pull motivation. Finally, this study is not without limitations. The use of cross-sectional data is probably the first of them, since causality cannot be claimed with this research design. Nevertheless, the large data set and the consolidated methodology developed by the GEM provides confidence to our results. Secondly, the study is carried out in one country (Spain). The selection of the country has allowed to control for a homogenous institutional environment. In turn, it may pose some doubts about the generalizability of these results. For this reason, we call for future research that may confirm or refute our findings with samples from different countries. 6. Conclusion In this study, we have contributed to a deeper understanding of the cognitive process leading entrepreneurs to develop innovative ventures. This research is novel in that it contributes to disentangling the internal mental process leading entrepreneurs to be innovative. Our results confirm that perceptions about the institutional environment and the self are relevant, as are the motivations to start the venture. 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