The effects of institutional support on firms´ innovative and risk-taking propensities

Based on the institutional theory and entrepreneurship theory, this study empirically tests hypotheses related to the impacts of institutional support on firms´ innovativeness and risk taking propensities in the context of Chinese transition economy. Results from a survey of 207 firms in China indicate that institutional support positively influences firms´ propensity of being innovative and taking risk. Further, empirical results suggest that the intensity of R&D fund investment has significant positive impact on firms´ innovativeness and risk taking. Contributions, practical implications, limitations and future extensions are considered.