ENTREPRENEURIAL LEADERSHIP AND NEW VENTURES

239

Entrepreneurial Leadership and

New Ventures: Creativity in
Entrepreneurial Teams
Ming-Huei Chen
This study tests the view that new ventures innovative capability is inuenced by the interaction of a lead entrepreneurs leadership and his or her entrepreneurial team members
creativity, as measured by the creation of patents. Focusing on 112 entrepreneurial teams in
Taiwans high-tech new ventures, the ndings suggest that lead entrepreneurs who are risktaking, pro-active and innovative can stimulate their entrepreneurial team members creativity. Moreover, new ventures innovative capability can be improved by the joint contribution
of higher entrepreneurial leadership and more creativity in entrepreneurial teams. The ndings also imply that the contingent impact of creativity in teams on the leadershipinnovation
relationship needs to be considered.

Introduction

n todays competitive world, the sole entrepreneur can fail more easily than entrepreneurial teams, and most successful
new ventures are started by teams (Watson,
Ponthieu & Critelli, 1995). Reich (1987) argued
that economic growth comes through collective entrepreneurship in which talent, energy
and skills are integrated into a team, and this
collective capacity to innovate becomes greater
than the sum of individual contributions.
Cooper (1973) found that 48 percent of high
technology rms in Austin, Texas; 61 percent
in Palo Alto, California; and 59 percent of 955
geographically dispersed rms were started
by groups of two or more people. Kamm et al.
(1990) indicated that 56 of the 100 bestperforming rms were team ventures and that
team ventures had higher revenues, greater
net incomes, and more successful market capitalization than non-team ventures. The activity
of an entrepreneurial team made up of professionals from various disciplines required in
new product development can speed product development and commercialization
(Bingham & Quigley, 1989). Furthermore,
despite the availability of technology, entrepreneurs, and nancial resources, the factors
affecting creative excellence in teams remain
poorly understood (Bygrave & Timmons,
2007 The Author
Journal compilation 2007 Blackwell Publishing

1992). Building a great team is not easy since

entrepreneurial teams are difcult to assemble
and keep together, and the issue of entrepreneurial teams is multi-faceted (Kamm et al.,
1990). Furthermore, neither academics nor
practitioners know very much about these
teams and how to avoid or overcome their
problems (Kamm et al., 1990). These uncertainties make the effective design and operation of such teams problematic.
The lead entrepreneur, or entrepreneurial
leader, is central to the entrepreneurial team.
It has been suggested that such a leader is the
one who has to create visionary scenarios that
are necessary for selecting and mobilizing a
supporting cast of interdependent members
who commit to and enact the vision to achieve
strategic value creation (Gupta, MacMillan &
Surie, 2004; Rickards & Moger, 2006). The
ability and skill in attracting other key management members and then building the team
is one of the most valued capabilities for lead
entrepreneurs. In addition to the critical role
of entrepreneurial leader, the quality of the
entrepreneurial team is strongly connected
with the growth potential of a new venture
(MacMillan, Zeemann & Narasimha, 1987;
Watson et al., 1995). There are numerous qualities that the team needs to have, including
relevant experience and skill (Long, 1983;
Ibrahim & Goodwin, 1986), creativity

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CREATIVITY AND INNOVATION MANAGEMENT

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(Amabile, 1997), opportunity obsession

(Ardichvili, Cardozo & Ray, 2003), and interpersonal skills (Watson et al., 1995).
According to Timmons (1999) well-known
model of the entrepreneurial process, successful entrepreneurial teams devise ingenious
and creative strategies to marshal and gain
control of resources, and use creativity to identify entrepreneurial opportunities. Although
an entrepreneurial leader and the quality of
the entrepreneurial team are important to new
venture success, managing such a team has its
unique demands (Kamm et al., 1990; Amason
& Sapienza, 1997). It is argued that the central
theme driving the entrepreneurial process is a
sensitivity to opportunities, so entrepreneurial
leaders and their teams need to be creative to
identify opportunities in market or technology, and to generate patents by implementing
creative ideas (Long, 1983).
In this paper, patents are used as the surrogate to measure high-tech new ventures innovative capability for several reasons. Patents
can reect rm-specic capabilities and processes not only to invent, innovate and discover new wealth-generating opportunities,
but also to capture some of the intermediate
outcomes of the innovation process (Markman,
Espina & Phan, 2004). Each patent protects a
unique invention and cumulative patents can
be seen as capturing a rms capability in
technology-based discovery and in R&D effectiveness. Second, patents confer technologybased rst-mover advantages. Unlike other
sources of competitive advantage that are
rm-specic, tacit, and relatively non-tradable,
patents are particularly valuable resources
because they are highly portable and transferable and can bring revenue to rms (Nelson &
Winter, 1982; Heeley, Matusik & Jain, 2007).
For these reasons, this paper considers the
following three questions: (1) will entrepreneurial leadership by lead entrepreneurs
stimulate new ventures innovative capability?
(2) will entrepreneurial leadership by lead
entrepreneurs stimulate creativity in entrepreneurial teams? and (3) will creativity in entrepreneurial teams moderate the relationship of
entrepreneurial leadership and new ventures
innovative capability? An entrepreneurial
team is dened as two or more individuals
who jointly establish and actively participate in
a business in which they share ownership
(Kamm & Nurick, 1993; Watson et al., 1995;
Timmons, 1999).
This research contributes in three signicant
ways: entrepreneurial leadership is examined
as an antecedent of creativity, therefore
extending our empirical insights of leadership
in entrepreneurship. First, although leadership
has been regarded as an inuential indicator

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of a venture performance (Bass & Avolio,

1990), some researchers argue that in the
increasingly turbulent and competitive business environment, a new type of entrepreneurial leadership distinct from other behavioural
forms of leadership has emerged (Ekvall &
Arvonen, 1994; Ireland & Hitt, 1999; Gupta
et al., 2004). Second, creativity in entrepreneurial teams is incorporated as the moderator
of the leadershipinnovation relationship in
the entrepreneurial team context since some
researchers argue that economic growth
comes from collective entrepreneurship
(Reich, 1987; Kamm et al., 1990). Third, creativity has generally been dened as the production of novel and useful ideas in any domain
(Amabile et al., 1996, p. 1155). Here, creativity
is more specically dened in the entrepreneurial context at the team level, involving an
entrepreneurial team using its creative power
in opportunity recognition and resource utilization (Timmons, 1999; Ardichvili, Cardozo &
Ray, 2003).

Research Scope: Technology-Based

Entrepreneurs and Research-Based
Incubators in Taiwan
Research has shown that most technological
entrepreneurs have emerged from a researchbased academic environment, including
university incubators, government research
centres and non-prot institutes (Cooper,
1973). Recent public policies aiming to encourage the creation of new ventures in business
incubators or science parks have been implemented in Europe, the United States and Asia.
One well-known early example is the faculty
and graduates of the Massachusetts Institute of
Technology who acted as venture champions
for their own start-ups along Route 128. Learning from such examples in 1996, the Taiwanese
government SME (small and medium enterprise) Development Foundation passed the
Act for Facilitating Public-Private Institutes in
Establishing SME Innovation Incubators, in
support of using SME funds to subsidize
newly-established university incubators and
non-prot incubators which could nurture
tenant rms and help traditional rms
advance their technology. Its support enables
incubators to recruit professional and experienced employees; helps provide laboratory
and operating space; as well as offering technical consulting, networking, business service
and managerial consulting. The incubating
centres serve as the platform not only for new
ventures who are able to access the host universitys resources, but also for academic
faculty to provide knowledge or input to
2007 The Author
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ENTREPRENEURIAL LEADERSHIP AND NEW VENTURES

Independent variable

Moderating variable

241

Dependent variables
New Ventures

Entrepreneurial Leadership

Innovative Capability
- Patent creation

Creativity in
Entrepreneurial teams

Control variables
- Entrepreneurial team size
- Firm size

Figure 1. The Conceptual Model of Entrepreneurial Team Leadership, Creativity in Entrepreneurial

Teams, and New Ventures Innovative Capability

develop technologies in close proximity to

entrepreneurs in start-ups (Gregorio, 2003).
The act has been seen as effective in terms
of numbers of incubators, new ventures, as
well as in its provision of total subsidies, and
amount of increased investment. There were 7
incubators initiated in 1997, increasing to a
total of 65 incubators by 2004. The illustrative indicators of the Taiwanese surrogateincubation model found that over 43 percent
of Taiwans universities have established incubator centres (Chang et al., 2005). The number
of tenant rms in incubators is also increasing
(18 ventures in 1997, rising to 1,725 ventures in
2004). The subsidies granted have increased
from NT$11.5 million in 1997 to NT$191
million in 2003. Moreover, in 2003, the
increased investment amounted to NT$4,933
million. The results have demonstrated that
research-based incubators in Taiwan have
played a key role in stimulating entrepreneurship by providing their resources, knowledge,
consulting services, and linking their collaborative projects with industries.

A Proposed Model and Research

Hypotheses
A proposed model linking entrepreneurial
leadership, creativity and a ventures innovative capability is shown in Figure 1, where
entrepreneurial leadership is the independent
variable, team creativity is the moderator and
a new ventures innovative capability is the
dependent variable. Entrepreneurial leadership is conceptualized as the combined construct of risk-taking, pro-activeness and
innovativeness (Lumpkin & Dess, 1996; Gupta
et al., 2004). Creativity in entrepreneurial
2007 The Author
Journal compilation 2007 Blackwell Publishing

teams is dened as the process through which

a team using its creative power in opportunity
recognition, using its imagination in limited
resources, and identifying opportunities in
markets and technology. Patent creation is
used as the proxy of the creative product,
the new ventures yearly innovative capability
(Glancey, 1998). The following section will
review the relevant literature and draw the
hypotheses.

Role of Entrepreneurial Leadership

in a New Ventures Innovation
From a meta-analysis of the determinants of
organizational innovation, Damanpour (1991)
suggested that the increasing complexity of
work processes and the increasingly competitive business environment have created new
challenges for organizations, and that their top
managers style of leadership has accordingly
become an increasingly important determinant of organizational innovation. Since most
new ventures are formed by a lead entrepreneur and a small group of people, the lead
entrepreneur is central to the team and his/
her leadership style can affect organizational
innovation in several different ways. First,
entrepreneurial leaders frame a challenge,
absorb uncertainty, maintain exibility, build
commitment, and specify limits in the face of
two interrelated challenges, thereby envisaging the scenario to followers and convincing
others that the scenario is achievable (Ireland
& Hitt, 1999; Timmons, 1999; Gupta et al.,
2004). Entrepreneurial leaders create visionary
scenarios that are used to assemble and mobilize a supporting cast of interdependent
members who commit and enact the vision to

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242

achieve strategic value creation (Gupta et al.,

2004, p. 242). Second, entrepreneurial leaders
tend to be tolerant of ambiguity, persistent,
persevering, creative, as well as enthusiastic
and dynamic leaders with high networking
and communication abilities (Stuart & Abetti,
1987), and this enables them to build entrepreneurial culture and organization (Timmons,
1999). Third, entrepreneurial leaders have a
propensity to act autonomously, a willingness
to innovate and take risks, and a tendency to
be aggressive toward competitors and proactive relative to marketplace opportunities
(Lumpkin & Dess, 1996). Fourth, entrepreneurial leaders act as change agents and facilitators to implement creative problem-solving
systems or process-orientation, thereby releasing creativity from the team, and empowering
people in problem-solving, setting quality
standards, continually improving and setting
higher goals (Ekvall & Arvonen, 1994; Rickards & Moger, 1999, 2000). We can thus extend
the concept of entrepreneurial leadership to
indicate lead entrepreneurs leadership style
when they are engaged in an effective combination of risk-taking, pro-activeness and innovativeness: (a) risk taking: willingness to absorb
uncertainty and take the burden of responsibility for the future; (b) pro-activeness: encouraging entrepreneurial initiatives that nurture
and support innovation; (c) innovativeness:
encouraging team members to think out of the
box and enhancing creative thinking.

Entrepreneurial Leadership and

New Ventures Innovative
Capability
A number of studies have highlighted the relationship between particular leader behaviours
and/or leadership styles and organizational
innovation. For instance, Keller (1992) found
that transformational leadership positively
inuenced performance of research and development project teams in a large R&D organization. Greenberger and Sexton (1988) found
that entrepreneurial leadership displayed by
the top management team fundamentally
drives innovation in rms. Top management
team members can affect the development and
implementation of new products by providing
the leadership necessary to create a climate
that stimulates innovation in the organization.
The importance of effective leadership in
bringing out innovation among creative
people is illustrated by Andrews (1967). He
obtained measures of creative performance in
a sample of 200 scientists working in government, industry and academia, along with one
measure of creative capacity, and found that

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the leaders tended to inhibit the introduction

of new ideas, and creative potential was
not related to performance. Oldham and
Cummings (1996) examined a rms creative
output among 171 engineers where creative
output was assessed by patents, contributions
to a suggestion programme, and supervisory
ratings of creative output. Jung et al. (2003)
found a direct and positive link between transformational leadership and organizational
innovation assessed by patents and R&D
intensity.
Although these studies have reported valuable insights, an area in this emerging eld is
studying the effects of entrepreneurial leadership. The concept of entrepreneurial leadership
has become increasingly important because
organizations must be more entrepreneurial to
enhance their performance, their capacity for
adaptation and long-term survival (Gupta
et al., 2004). Covin and Slevin (1988) emphasized that entrepreneurial effort refers to key
challenges managers face and is related to the
three interrelated behaviour components: the
risk-taking dimension (inclined to take
business-related risks), the innovation dimension (favouring change and innovation to
obtain a competitive advantage for the rm),
and the pro-active dimension (competing
aggressively with other rms). In another
study with cross-cultural samples from 62 societies and over 15,000 middle managers, Gupta
et al. (2004) concluded that entrepreneurial
leadership is universally endorsed and that
there are societal differences in its effectiveness
suggests several promising areas of inquiry
(p. 257). Therefore, Hypothesis 1 is proposed:
Hypothesis 1: For high-tech new ventures,
there will be a positive relationship
between entrepreneurial leadership and a
new ventures innovative capability.

Entrepreneurial Leadership and

Creativity in Entrepreneurial Teams
The connection between entrepreneurial leadership and creativity in teams has been shown
in previous studies. For instance, from their
laboratory study, Sosik, Kahai and Avolio
(1998) reported that groups identied as demonstrating higher levels of transformational
leadership generated more original solutions
and idea elaborations than groups exhibiting
lower levels of transformational leadership.
Jung (2000) found that leaders who encourage
consideration of a wide range of alternatives,
introduction of unusual solutions and appreciation of ideas from all team members can
stimulate creativity. Mumford et al. (2002)
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ENTREPRENEURIAL LEADERSHIP AND NEW VENTURES

suggested that leaders of creative ventures can

facilitate the idea-generation process by providing autonomy and freedom to individuals
to let creative ideas ow. Venkataraman, MacMillan and McGrath (1992) observed that a
new venture idea required a champion to
exert social and political effort to galvanize
support for the concept. Therefore, Hypothesis
2 is proposed:
Hypothesis 2: For high-tech new ventures,
there will be a positive relationship
between entrepreneurial leadership and
creativity in entrepreneurial teams.

The Moderating Role of Creativity

in Entrepreneurial Teams to the
Relationship of Entrepreneurial
Leadership and New Ventures
Innovative Capability
Timmons (1999) argued that the central theme
driving a highly dynamic entrepreneurial
process is the opportunity force, by which
entrepreneurs can creatively identify opportunities by deploying relevant resources. Moreover, in the obsessive pursuit of opportunities,
an entrepreneurial team seeks to creatively use
the lowest types of resources at each stage of
the venture growth (Timmons, 1999). Entrepreneurs need to generate valuable ideas for
new products, services or technologies that
will appeal to some identiable market and
potential opportunities, and they must gure
out how to bring their projects to fruition
(Ward, 2004). However, identication of
entrepreneurial opportunity and utilization
of scarce resources is highly reliant on the
entrepreneurial teams creativity (Ardichvili,
Cardozo & Ray, 2003). Creativity is important
for entrepreneurial teams to search for hidden
opportunities and for the generation and
implementation of novel, appropriate ideas in
order to establish a new venture (Ward, 2004).
Resource-based theory suggests that creativity, which is an intangible resource embedded within a rm, can provide a competitive
advantage (Barney, 1991). In pursuit of opportunities, the entrepreneurial team looks at
resources differently from the way other teams
view them. Stevenson and Jarillo (1990) concluded that successful and growth-minded
entrepreneurs focus on opportunity without
regard to the resources they currently control.
Ardichvili, Cardozo and Ray (2003) claimed
that an opportunity may be the chance to meet
a market need through a creative combination
of resources to deliver superior value (p. 108).
Kirzner (1997) pointed out that an opportunity
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243

may appear as an imprecisely-dened market

need, or under-used resource or capability. An
imprecisely-dened market need means that
prospective customers may or may not be able
to articulate their needs, interests or problems.
Thus, entrepreneurial members must use their
creativity to recognize potential opportunities
by taking the perspective of prospective customers linked to venture performance. Underused resources include basic technologies,
inventions for which no market has been
dened, or ideas for products and services.
Thus, entrepreneurial members use their creativity to create technology, knowledge or
proprietary patents.
Linking leader behaviours, creativity and
rms innovation is highlighted in the existing
literature. For instance, Amabile et al. (2004)
showed that leader behaviour was positively
related to the peer-rated creativity of subordinates working on creative projects in seven different companies. Similarly, Reiter-Palmon
and Illies (2004) found that creative outcomes
developed by employees will not be realized
without a large degree of support from the
organizational leaders. Regarding leaders
styles, particularly in a highly competitive
environment, Basadur (2004) argued that the
most effective leaders will encourage and
enable teams to think together in innovative
ways, and help them to coordinate and integrate their different styles to drive change
through a process of applied creativity. Jung
(2000) conducted an experiment to examine
the effect of different leadership styles and
brainstorming conditions on team members
divergent thinking, nding that participants in
the transformational leadership condition outperformed their counterparts under transactional leadership. These previous studies all
highlighted the positive linkages between
leaders styles, teams creativity and performance. These linkages can be extensively
examined in the new venture context, and so
Hypothesis 3 is proposed:
Hypothesis 3: The impact of entrepreneurial leadership on new ventures innovative
capability is moderated by the level of
creativity in entrepreneurial teams.

Method
Samples
Research in technical entrepreneurship has
identied the research-based academic environment as the predominant background
from which technical entrepreneurs emerged
(Cooper, 1973). Therefore, the list of all tenant
rms established in government-funded incu-

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244

bators in Taiwan was surveyed using data from

the Small and Medium Enterprises Administration, Ministry of Economics, Taiwan. The
population of studied incubators in 2005
includes 54 university incubators, 6 government incubators, and 5 non-prot incubators.
After using telephone and internet searches to
eliminate tenant rms which did not t the
selection criteria, a total of 644 new ventures
established at incubators were identied. The
criteria for selecting the entrepreneurial teams
were: (1) the ventures had been established less
than 10 years; (2) the ventures had not yet
matured to initial public offering (IPO); (3) the
ventures were currently tenants in the incubators. The questionnaire was sent to one core
member of the entrepreneurial team who had
shared ownership and who was actively
involved in the new venture (Kamm et al.,
1990; Kamm & Nurick 1993). We conducted a
three-wave postal survey during March
September 2005. Approximately 23 weeks
after the earlier mailing, three follow-up letters
and questionnaires were sent to nonrespondents. A total of 112 usable and valid
responses were received and used in this study.
Eighty-one (72.3 percent) respondents were
male, and 31 (27.7 percent) were female. Fifteen
(13.4 percent) respondents were 30 years old or
younger, 12 (10.7 percent) were 3135 years
old, 20 (17.9 percent) were 3640 years old, 29
(25.9 percent) were 4145 years old, and 36 (32.1
percent) were more than 46 years old. Thirtyone (28.2 percent) respondents held a college
degree, 38 (34.5 percent) held a bachelors
degree, 30 (27.3 percent) held a master degree,
and 11 (10 percent) held a doctoral degree. In
professional background, 50 (45 percent)
respondents had majored in management, 58
(52.3 percent) in engineering, 2 (1.8 percent) in
humanities, and one (0.9 percent) in medicine.

ativity to break through the status quo. The ve

items loaded ranged from 0.65 to 0.77 on a
single factor, indicating that it is appropriate
to aggregate these items into a single scale
because they are empirically related and constitute a distinct, uni-dimensional managerial orientation. Team creativity was measured using a
four-item scale (alpha = 0.82) on tolerance for
ambiguity, creativity in opportunity recognition, imagination in using parsimonious
resources, and insight in technology and
market opportunities. The four items loaded
ranged from 0.66 to 0.84 on a single factor. The
items were measured on a ve-point Likerttype scale ranging from (1) strongly disagree to
(5) strongly agree.
Dependent Variable
Patents were used to describe technological
positions of rms and to assess rms innovative activity (Stuart & Podolny, 1996). Patents
are used as surrogates of measuring new
ventures innovative capability by assessing
the average number of patents the rm has
been granted annually by Taiwan and other
countries.
Control Variables
The study of entrepreneurship has become
more complex and heterogeneous since the
1980s, and so we need to consider the entrepreneur, the team, the rm and the links
between them (Bruyat & Julien, 2000). Thus,
rm size and entrepreneurial team size are
used to control for the impact of a rms
human resources on new venture performance (Baum & Silverman, 2004).

Results and Discussions

Measures
Independent Variables
Entrepreneurial leadership was assessed by
asking a core entrepreneurial member to report
on his/her lead entrepreneurial activity, using
self-report items. Entrepreneurial leadership
was measured using a ve-item scale
(alpha = 0.76) on risk-taking, pro-activeness
and innovativeness. Risk-taking means that the
lead entrepreneur is willing to accept uncertainties in pursuit of challenging goals. Proactiveness means that the lead entrepreneur
encourages entrepreneurial initiatives that
enhance the new ventures competitive advantages. Innovativeness means that the lead entrepreneur inspires team members to commit to
entrepreneurial goals and stimulates their cre-

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Descriptive Analysis for the Studied Sample

Data from 112 entrepreneurial teams tenanted
at government-funded incubators in Taiwan
were collected and studied. The teams
included 99 (88.4 percent) from university
incubators, 11 (9.8 percent) from government
incubators, and 2 (1.8 percent) from non-prot
incubators. Sixty-four (61 percent) new ventures had less than NT$10 million capital, 26
(24.8 percent) had NT$1050 million, 7 (6.7
percent) had NT$50100 million, and 8 (7.6
percent) had more than NT$100 million. The
average capital for each new venture was
NT$28.85 million. The average size of entrepreneurial teams was about ve persons. In
rm size, 38 (35.2 percent) new ventures had
fewer than 10 employees, 36 (33.3 percent) had
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ENTREPRENEURIAL LEADERSHIP AND NEW VENTURES

1029 employees, 7 (6.5 percent) had 3049

employees, and 27 (25 percent) had more than
50 employees. The average number of employees was about 32.

The Effect of Entrepreneurial Leadership on

New Ventures Innovative Capability
As shown in Table 1, results suggest no signicant relationship between entrepreneurial
leadership and new ventures patent creation
(b = -0.03, t = -0.24). Thus, Hypothesis 1 is
not supported. There are several possible
reasons why the current nding does not
provide positive support for the previous
studies: rst, the attributes of entrepreneurial
leadership are unique and consist of risktaking, innovativeness and pro-activeness
(Covin & Slevin, 1988; Gupta et al., 2004),
which are different from those of transformational leadership whose components are
inspirational motivation, intellectual stimulation, idealized inuence and individualized
consideration (Bass & Avolio, 1990). Second,
the construct of entrepreneurial leadership
developed in this paper is a preliminary step
that attempts to measure the attributes of
lead entrepreneurs when they face the highly
competitive and turbulent environments

245

since the perceived need for entrepreneurial

leadership in stable environments may actually be lower (Gupta et al., 2004). Third, the
current research context is limited to small
and medium sized new ventures, which can
be different from the studies on general or
well-established large rms.

Relationship between Entrepreneurial

Leadership and Creativity in
Entrepreneurial Teams
Table 2 reports the correlations for all studied
variables. Correlation analysis shows that new
ventures patent creation is positively and signicantly correlated with rm size (r = 0.58,
p < 0.01). As predicted in Hypothesis 2,
entrepreneurial leadership is positively and
signicantly correlated with creativity in
entrepreneurial teams (r = 0.42, p < 0.01). This
implies that lead entrepreneurs will exhibit
more risk-taking, pro-activeness and innovativeness when facing turbulent environments;
and this will stimulate entrepreneurial team
members to use more creative power to
explore market opportunities and utilize parsimonious resources effectively. This nding
provides evidence consistent with existing
studies (e.g., Greenberger & Sexton, 1988;

Table 1. Results of Hierarchical Regression Analysis for the Effects of Leadership and Creativity on New
Ventures Innovative Capability (N = 112 Teams).
Variables

Model 1
b

Control variables
Entrepreneurial team size
Firm size
Independent variables
Entrepreneurial team leadership
Creativity in entrepreneurial
teams
Interaction effect
Leadership Creativity
R2
DR2
Model F
df

0.40
-0.15

0.11
0.11
5.34**
2, 89

Model 2

Model 3

3.11**
-1.16

0.42
-0.14

3.26**
-1.08

0.46
-0.11

3.63***
-0.85

-0.03
0.18

-0.24
1.70+

-1.73
-2.71

-2.37*
-2.20*

0.14
0.03
3.44*
2, 87

3.79
0.19
0.05*
4.01**
1, 86

2.36*

Notes: The variable patent creation is counted as cumulative numbers of patent creation divided by the
established years.
+
p < 0.01, * p < 0.05, ** p < 0.01; *** p < 0.001.
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Table 2. Correlation Matrix for the All Studied Variables (N = 112 Teams)
Variables
1
2
3
4
5

Entrepreneurial team size

Firm size
Entrepreneurial leadership
Creativity in entrepreneurial teams
Patents creation

Mean (SD)
4.39
31.61
4.37
3.90
1.04

(3.00)
(41.91)
(.43)
(.55)
(2.25)

0.58**
0.05
-0.14
0.08

0.06
-0.10
0.29**

0.42**
0.05

0.14

Notes: The variable patent creation is counted as cumulative numbers of patent creation divided by the
established years.
** p < 0.01 (two-tailed test).

Ekvall & Arvonen, 1994; Sosik et al., 1998;

Jung, 2000; Rickards, Chen & Moger, 2001).

Moderating Role of Creativity in

Entrepreneurial Teams on the Relationship
of Entrepreneurial Leadership and New
Ventures Innovative Capability
Table 1 presents the hierarchical regression
analysis for the effects of leadership and
creativity on new ventures patent creation.
Control variables include entrepreneurial
team size and rm size. Entrepreneurial team
size and organizational size were controlled
since the sample consisted of a wide range of
number of entrepreneurial members and
employee size. In Model 1, results indicated
that the coefcient for entrepreneurial team
size was signicant (b = 0.40, t = 3.11, p < 0.05),
suggesting that larger entrepreneurial team
size can increase the human resources available for a new ventures patent creation. In
Model 2, the results indicate a positive relationship between creativity in entrepreneurial
teams and new ventures patent creation
(b = 0.18, t = 1.7, p < 0.1).
The results for Model 3 indicated that creativity in entrepreneurial teams positively
moderates the relationship between entrepreneurial leadership and a new ventures
innovative capability (DR2 = 0.05, p < 0.05), providing support for Hypothesis 3. This model
also indicated that entrepreneurial leadership
can enhance a new ventures patent creation
only when entrepreneurial team members are
creative. A representation of the interaction
between entrepreneurial leadership and creativity in entrepreneurial teams is provided in
Figure 2. This graph shows that the positive
relationship between entrepreneurial leadership and new ventures patent creation
becomes stronger as the level of creativity of
entrepreneurial teams is increased.

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Conclusions
This paper is an empirical study drawn from
Taiwans high-tech entrepreneurial teams that
explores the moderating role of creativity in
entrepreneurial teams, and how it is connected to the relationship between entrepreneurial leadership and new ventures
innovative capability. One key nding of this
paper suggests that in a new ventures
context, entrepreneurial leadership can
stimulate entrepreneurial team members to
be more creative. The second nding suggests
that when lead entrepreneurs have higher
risk-taking, pro-activeness and innovativeness, they can stimulate their entrepreneurial
team to be more creative during the patent
creation process. It also indicates that the joint
contribution of higher entrepreneurial leadership and more creative teams can enhance
the creation of more patents by a new
venture.
While this paper makes an important and
meaningful contribution to an understanding
of the effects of entrepreneurial leadership
and team creativity on patent creation, some
research limitations merit discussion. One
limitation was that patent creation was used
as a single indicator of new ventures innovative capability for high-tech sectors. Further
work could incorporate multi-indicators to
measure new ventures innovation. In addition, one might need to bear in mind that
using patents as the innovation metric for
high-tech sectors might not be suitable for all
types of rms.
A further limitation was that only one
respondent from each rm answered the questionnaire, which did not allow us to test
within-group agreement. This could be an
important issue because cross-cultural divergence in effectiveness of entrepreneurial leadership is typical at the micro level and reects
the varying needs, values and beliefs of people
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ENTREPRENEURIAL LEADERSHIP AND NEW VENTURES

247

80

75

70

Patent Creation

65

60
Low Creativity in
Entrepreneurial Teams
High Creativity in
Entrepreneurial Teams

55

50
Low

High

Entrepreneurial Leadership

Figure 2. Interaction of Entrepreneurial Leadership and Creativity in Entrepreneurial Teams on New

Ventures Innovative Capability

within different rms and societies (Child,

1981; Gupta et al., 2004).
One future direction would be to collect
data from multiple raters on the measured
variables to address the issue of withinorganization agreement. The third limitation
was that the current study has examined only
the roles of entrepreneurial leadership and
entrepreneurial teams on the patent creation
process. Since organizational behaviour is far
more complicated and involves more contextual and individual factors, further work can
be enriched by adding more signicant contextual factors into the research framework.

Acknowledgement
The author would like to thank the National
Science Council, Taiwan, for funding the
project under grant NSC 92-2416-H-155-011.

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Ming-Huei Chen (mhchen@dragon.nchu.

edu.tw) is an associate professor at the
Graduate Institute of Technology & Innovation Management, National Chung Hsing
University, Taiwan. Dr Chen teaches graduate level and EMBA Creativity and Innovation Management courses, and lectures
creative problem-solving methods in companys training programs. She completed
her PhD from the Manchester Business
School, University of Manchester, UK, in
2001, a MBA and a MSc (Business Education) from Southern New Hampshire University in the United States in 1992; and a
bachelor of Business Education in Taiwan in
1990.

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