Environmental munificence for entrepreneurs: entrepreneurial alertness and commitment

Abstract

Purpose Existing literature suggests that the need for a conducive environment is crucial in developing entrepreneurship. Previous research on this trend has focused on what constitutes a munificent environment and how environmental conditions stimulate an entrepreneur's intentionality to start a venture. However, little is known about how entrepreneurs “switch on” their alertness to business opportunities in a benign environment. The purpose of this paper is to examine the effects of environmental munificence on entrepreneurs' alertness, as moderated by self‐efficacy, and the effects of this alertness on entrepreneurs' commitment to their new ventures. Design/methodology/approach Data were used from the Panel Study of Entrepreneurial Dynamics (PSED) to test the hypotheses. Exploratory Factor Analysis and Confirmatory Factor Analysis were conducted to ensure the dimensionality of entrepreneurial commitment scale. Hypotheses were tested using moderated hierarchical regression analysis. Findings The results of this study show a strong relationship between environmental munificence and alertness especially when the entrepreneurs have high levels of self‐efficacy in performing the roles and tasks of new venture creation. In turn, entrepreneurial alertness is related to continuance, behavioral and affective commitment of entrepreneurs. Originality/value The findings have important implications for the theory and practice of developing entrepreneurial firms.