Research on Policy Environment, Entrepreneurial Altertness, and Innovative Entrepreneurial Decision-Making

The ability to make innovative entrepreneurial decisions in entrepreneurship is crucial for firms to participate in the highly competitive market. Whether the government policy environment influences innovation and entrepreneurship decisions and what the mechanism is remains to be explored. Based on the theory of entrepreneurial cognition, a moderated mediation model is constructed and the mechanism of this influence is explored. The results show that the policy environment can trigger innovative entrepreneurship decisions, and further results show that both protective and promotional policy environments significantly promote the use and exploration of innovative entrepreneurship decisions. The mediating effect of entrepreneurial alertness is significant, i.e., the policy environment triggers entrepreneurial alertness that promotes innovative entrepreneurial decisions. Positive personality positively moderates exploitative innovative entrepreneurial decisions and does not significantly moderate exploratory innovative entrepreneurial decisions. Positive personality reinforces the indirect effect of policy perceptions on innovative entrepreneurial decisions by enhancing the role of entrepreneurial alertness on innovative entrepreneurial decisions. The managerial insights and policy implications include: first, promoting entrepreneurial alertness through resource-based and patent-protection policies to increase the likelihood of entrepreneurs making exploratory and exploitative innovative entrepreneurial decisions; second, diversification to enhance entrepreneurial alertness and to exercise entrepreneurs' sensitivity to cognitive information in an externally diverse, inclusive, and highly dynamic environment; and finally, shaping entrepreneurs' positive personalities to facilitate their exploratory and exploitative innovative entrepreneurial decisions.