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Introduction
The theory of the innovating firm assumes that the investments that the firm makes must be developed and utilized over time, as the firm transforms technologies and accesses markets, before returns from those investments can be generated, or indeed before the rate of return can even be known (Lazonick, 2008). Firms vary in the amount of inputs they devote to the innovation process. However, the dedication of more inputs to the innovation process does not guarantee innovation outcomes, since the process of developing innovation is complex and characterized by high risks. If firms devote substantial resources to the innovation process, but are unable to turn them into innovative offerings, resources are squandered and firm performance suffers (Dai et al., 2014; Donate et al., 2016; Urban, 2016).
Innovation has to address market needs, and requires entrepreneurship if it is to achieve commercial success (Casson, 2005; Casson and Wadeson, 2007; McFadzean et al., 2005; Pérez-Luño et al., 2011). Entrepreneurship and innovation are positively related to each other and interact to help an organization to flourish (De Jong, 2013; Jarrar and Smith, 2014; Urban and Wood, 2015). Not only are entrepreneurship and innovation complementary, but a combination of the two is vital to organizational success and sustainability in today’s dynamic and changing environment (Dess and Lumpkin, 2005; Hayton et al., 2002; Reihlen and Ringberg, 2013). The global business environment is becoming increasingly competitive and entrepreneurial activity is growing in prominence, which allows for the survival and future competitiveness of corporate entities (De Jong, 2013; Lechner and Gudmundsson, 2014).
Innovation is a multi-dimensional phenomenon and at the firm level incorporates the behaviors and interactions of individuals and various organizational factors (Antoncic and Hisrich, 2004; Lawler, 2011; Phan et al., 2009; Uzkurt et al., 2013). At the level of the business enterprise, the collective character of the innovation process reflects the reliance of the entrepreneur, on the skills and efforts of other enterprise participants in the exercise of strategic control, the management of organizational integration, and the mobilization of financial commitment (De Clercq et al., 2014). Moreover, entrepreneurship and innovation are not confined to the initial stages of a new venture, rather, they are dynamic and holistic processes where individual behaviors...