Unpacking the Personal Initiative–Performance Relationship: A Multi-Group Analysis of Innovation by Ugandan Rural and Urban Entrepreneurs

Abstract

This article considers determinants of innovative performance of entrepreneurs in developing countries. Innovation is viewed from a personal initiative perspective. We distinguish two mechanisms through which entrepreneurs who show personal initiative are innovative. The first mechanism is business planning. The second mechanism is the acquisition of resources that can be accessed through a social network of relations. We argue that the two mechanisms depend on the context of innovation. Planning will be more beneficial in more dynamic environments. In dynamic and individualistic-oriented environments it will be more beneficial to actively develop networks. In more static, collectivistic-oriented environments personal initiative will be less beneficial. The model was tested using a sizable survey of 283 rural and 290 urban entrepreneurs in Uganda, a country located in East Africa.