The innovative entrepreneur and the context

This paper examines the influence of internal and contextual factors on entrepreneurial innovation. The study draws from Resource-Based Theory and National Systems of Entrepreneurship to develop a framework that captures internal and external drivers of entrepreneurial innovation. We argue that entrepreneurs’ internal resources and capabilities together with contextual factors influence innovative outcomes. We use multilevel modelling to test our hypotheses, using the Global Entrepreneurship Monitor (GEM) dataset for 20 European countries for the period 2005-2010. Our findings show that contextual factors impact entrepreneurial innovation differently. Social context plays an important role in product innovation whereas the quality of the institutional context enhances market innovations. Finally, the technological and spatial contexts play a key role on process innovations. Our study contributes to the entrepreneurship literature by empirically examining the multi-dimensional impacts of context on entrepreneurial innovation and providing valuable insights on how context can foster creativity and innovation.