Outsourcing and entrepreneurial innovation in a transition economy: the moderating roles of private ownership and government support

Abstract

PurposeThis study aims to study the moderating effects of private ownership and government support on the relationship between outsourcing and product innovation in entrepreneurial ventures in a transition economy.Design/methodology/approachThe data of 10,296 Vietnamese entrepreneurial ventures from the four rounds of the survey conducted by the General Statistics Office (GSO) of Vietnam to investigate the moderating effects of private ownership and government support on the association between outsourcing and entrepreneurial ventures’ product innovation performance. The Probit regression model is employed to estimate such associations.FindingsOur research uncovered that the impact of outsourcing on the likelihood of product innovation is more significant for entrepreneurial operations characterized by a substantial degree of private ownership and government backing as opposed to those without.Research limitations/implicationsThe results of our research indicated that the resource-based perspective and extended resource-based view (ERBV) are essential in examining the impact of gaining resources or skills from external sources on the growth of entrepreneurial enterprises. These ideas have significance and importance not just in industrialized economies but also in countries undergoing transition. Our findings suggest that entrepreneurial enterprises should have the ability to manage a wide range of resources and make decisions about which activities should be handled internally and which should be delegated to other parties.Practical implicationsOur findings also imply that entrepreneurial ventures should be able to control many resources and choose which tasks should be performed in-house and which should be outsourced to third parties.Originality/valueBy adopting and leveraging the resource-based view (RBV) and extended resource-based views (ERBV), our study developed a theoretical model about private ownership and government support for moderate outsourcing’s impact on entrepreneurial innovation in a transition economy.