Incentive Mechanisms,Entrepreneurial Orientation,and Technology Commercialization: Evidence from China's Transitional Economy*

Scholars view entrepreneurial orientation as an essential element of high‐performing firms. The extant research has focused extensively on the construct development related to and performance implications of entrepreneurial orientation. Prior research has also identified the significant positive impact of entrepreneurial orientation on technology commercialization. The research community has, however, yet to examine critical antecedents of entrepreneurial orientation and to investigate relevant antecedents and consequences of entrepreneurial orientation in transitional settings such as that of China. Most Chinese firms are embracing significant changes in governance incentive mechanisms as China deepens the economic reform. The extant literature provides limited insight as to how incentive mechanisms such as chief executive officer (CEO) ownership and turnover may affect firm entrepreneurial orientation in China's transitional setting. Furthermore, given the significant changes and uncertainty in the market place, China provides an ideal laboratory to examine the influence of technological turbulence on the relationship between entrepreneurial orientation and technology commercialization. Aimed at filling in these glaring gaps, this study develops a conceptual model, with institutional theory as its underpinning, to examine the relationships among governance incentive mechanisms, entrepreneurial orientation, technological turbulence, and technology commercialization. The empirical results from a sample of 607 Chinese firms reveal several important findings. The CEO ownership has a significant positive effect on entrepreneurial orientation, and CEO turnover frequency has an inverse U curvilinear impact on entrepreneurial orientation. Furthermore, entrepreneurial orientation positively affects technology commercialization, with technological turbulence positively moderating this relationship. This study makes several important contributions. First, the present article brings into sharper focus the differing impacts of CEO ownership and CEO turnover on entrepreneurial orientation. The theoretical deliberation and empirical testing offer useful insights into the formation process of entrepreneurial orientation. Second, the examination of the moderating effect of technological turbulence provides additional richness to the extant literature. In addition, different from prior studies, this study was conducted under China's transitional economy context. By integrating unique institutional arrangements and the turbulent technological environment, two key characteristics of China's transitional economy setting, the study broadened and deepened understanding of key antecedents and consequences of entrepreneurial orientation. The article also discusses managerial implications of the findings and suggests directions for future research.