Does Entrepreneur's Perception of Business Environment Affect Entrepreneurial Orientation: The Strategic Choice Approach

ABSTRACT In contrast to the traditional view that environment and traits of the entrepreneurs shape the entrepreneurial orientation, this study explores how entrepreneurs' perception of the business environment affects their entrepreneurial orientation from the perspective of strategic choice. Through an empirical analysis of 1104 privately owned enterprises in China, this paper develops a “perception‐attitude‐behavior” framework. Specifically, we find that: (1) entrepreneurs' perception of business environment enhances their enterprises’ entrepreneurial orientation; (2) entrepreneur's attitude towards change mediates the effect of entrepreneur's perception of business environment on entrepreneurial orientation; (3) the competitive status of enterprises has an inverted U‐shaped moderating effect on both the relationship between business environment perception and entrepreneurial orientation, as well as the relationship between attitude towards change and entrepreneurial orientation. With these findings, this paper provides new micro‐foundations for understanding the strategic choice process, contributing to the exploration of antecedents of entrepreneurial orientation, and provides practical implications as well.