Schumpeterian Entry: Innovation, Exporting, and Growth Aspirations of Entrepreneurs

Abstract

We posit that when entrepreneurs engage in strategic activities from the onset of their new operations, they will have high growth aspirations. Our proposed mechanism is that strategic engagements open entrepreneurial ventures to learning opportunities through new processes, systems and markets, and thereby to greater growth opportunities. We focus on three strategic activities: product and process innovation and exporting. Furthermore, the benefits are reinforced in knowledge- intensive environments. To test our hypotheses we apply multilevel random slope estimation for individual data on 74 countries in 2001-2015 from the Global Entrepreneurship Monitor. The results are consistent with our hypotheses and robust to potential reverse causality between entrepreneurs’ strategic behaviour and growth aspirations, and to selection bias caused by the fact that the decisions to innovate, internationalize and grow a business are only observed for the sample of actual entrepreneurs.

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