Technological innovation not only contributes to economic update and national strength from a macro perspective, but also determines a firm′s survival, comparative advantages and market value from a micro perspective. Given its importance, firm innovation has always been a hot topic in academia. In China, private firms are active players in the market, and understanding their innovative decisions can be of great account under the policy of Mass Entrepreneurship and Innovation. Existing literature has found that firm innovation can be influenced by the personal traits of decision-makers (entrepreneurs or CEOs), such as age, education, military experience, career experience, overseas experience, perceived parents′ social status, native place and political connection. However, we still know little about whether the original social hierarchy of entrepreneurs plays a role in firm innovative decisions. In this study, we focus on farmer-sourced entrepreneurs and their firms′ innovation input aiming to fill the research gap. By integrating imprinting theory and literature on social hierarchy, this study examines the effect of entrepreneurs′ original social hierarchy on firm innovation input. Imprinting theory has argued that early life experiences can leave persistent imprint on individuals, which can influence individuals′ attitudes and beliefs throughout their lives. Social hierarchy research states that people who grew up in low social hierarchy are more risk-prone. Compared with the high social hierarchy, the low social hierarchy possesses much less in terms of resources, status, opportunities, etc. This may lead them to form a mindset of "nothing to lose" in risky decisions. They would pay more attention to the potential benefits instead of potential loss when taking risks. In the Chinese context, farmers are in a relatively low social hierarchy. They own less than urban residents in the aspects of income, education, and perceived social status. Therefore, we propose that farm-sourced entrepreneurs are more risk-prone and are likely to invest more in firm innovation than non-farm-sourced entrepreneurs. However, it is impossible that farm-sourced entrepreneurs do not care about the riskiness of innovation at all, so we propose two moderators that may influence entrepreneurs′ perceived risk of innovation: prior sales rep experience and firm employee training. Firstly, entrepreneurs who once worked as sales rep could have accumulated rich marketing knowledge, which helps them make more accurate judgements about market demand and boost their confidence in innovative activates. Hence, we propose that prior sales rep experience can strength the innovation investment of farm-sourced entrepreneurs. Secondly, investing in employees training can increase their professional knowledge and skills, which lessens the risk of innovative activities. Therefore, we propose that employee training input can strengthen farm-sourced entrepreneurs′ innovation investment. Evidence from the nationwide survey of private firms across China in early 2014 supports our predictions. This study has three main academic implications. Firstly, it enriches research on imprinting theory and social hierarchy. This study suggests a lasting imprinting effect of entrepreneurs′ original social hierarchy on their risk preferences, which supplements for existing research about the imprinting effect of individuals′ early experiences. Moreover, original social hierarchy is measured by an objective indicator in this study, which is better than existing research in which social hierarchy is measured by subjective indicators. Secondly, this study contributes to firm innovation research by deepening the understanding of how entrepreneurs or CEOs affect corporate innovation through their original social hierarchy. Thirdly, this research deepens our knowledge about the inner mechanism of entrepreneurs′ risk preference. Research has pointed out that entrepreneurs who have military experience, overseas experiences or diverse career experience may be more risk-prone since these experiences make them more confident. However, farmer experience increases an entrepreneur′s risk preference by cultivating a mindset of "nothing to lose".Besides, this study has also managerial implications. Realizing the existence of imprinting effect can help entrepreneurs form more accurate self-cognition so that they can take essential actions to overcome cognitive and behavioral biases in decision making. Moreover, this study can help firms select suitable candidates for a position relating to risky activities. For example, when a position needs someone who is risk-prone (such as in R&D department) or risk-averse (such as in risk control department), one′s original social hierarchy and childhood life experiences can be important factors for reference.
Key words
farmer-sourced entrepreneur /
innovation input /
imprinting theory /
social hierarchy
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