Non-linear and interaction effects of causation and effectuation on new venture performance: the role of ecosystem support

Purpose This paper investigates non-linear and interaction effects of causation and effectuation on entrepreneurial ventures’ performance, considering different levels of ecosystem support. Design/methodology/approach Drawing on an ambidexterity perspective and recent research on causation and effectuation, we theorize curvilinear and interaction effects of causation and effectuation on venture performance that depend on the level of ecosystem support (i.e. from the government, business associations and accelerators/incubators). We empirically test our hypothesized model with a cross-country dataset of 861 European entrepreneurial ventures using multivariate regression analysis. Findings We find that causation has a J-shaped relationship with venture performance. Furthermore, the interaction of causation and effectuation has a positive effect on performance. Both effects are stronger in environments with low levels of ecosystem support. Originality/value This research delivers novel insights into individual and interaction effects of two entrepreneurial decision-making logics (i.e. causation and effectuation) that were often investigated as opposing logics. The results contribute to the literature on causation, effectuation and venture performance and answer calls for more contextualization of entrepreneurship research by investigating the differential role of ecosystem support in the effectiveness of both decision-making logics. Additionally, it provides practical advice for policymakers, entrepreneurs and other ecosystem actors.