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Abstract Innovative behavior is increasingly important for organizations' survival. Transformational leadership, in contrast to transactional leadership, has been argued to be particularly effective in engendering follower innovative behavior. However, empirical evidence for this relationship is scarce and inconsistent. Addressing this issue, we propose that follower psychological empowerment moderates the relationship of transformational and transactional leadership with follower innovative behavior. In a field study with 230 employees of a government agency in the Netherlands combining multisource ratings, we show that transformational leadership is positively related to innovative behavior only when psychological empowerment is high, whereas transactional leadership has a negative relationship with innovative behavior only under these conditions. Copyright © 2009 John Wiley & Sons, Ltd.
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