Personality characteristics and the process of start-up: the moderating role of institutional environment

Abstract

The study investigates the relationship between entrepreneur’s personality characteristics, i.e. need for achievement and internal locus of control, with the process of start-up. Besides, this study examines the role of risk propensity as a mediator in the relationship between personality characteristics and the process of start-up. Also, this study assesses the interaction effects of institutional environment on the relationship between risk propensity and the process of start-ups. Data were collected through a single cross-sectional survey from 478 entrepreneurs in India. The study used partial least squares approach to path modelling to examine the proposed relationship in the research model. After controlling the effects of risk propensity, the results reveal internal locus of control and need for achievement are significantly related to start-up process. Furthermore, the relationship between risk propensity and start-up was moderated by institutional environment. Findings of the study indicate the importance of personal characteristics in the process of start-up. The study also emphasizes how the institutional environment enhances the level of the process of start-up. Moreover, this study is useful in differentiating personality characteristics from non-entrepreneurs.