The effects of government support on entrepreneurial orientation in new ventures: The contingent role of demand uncertainty

The “liability of newness” highlights the critical need for new ventures to leverage government support in shaping their entrepreneurial orientation. However, existing research on how government support affects the entrepreneurial orientation of new ventures is still inconclusive. Drawing on institutional theory, this study investigates the differential mechanisms of government support within the three dimensions of entrepreneurial orientation - innovativeness, proactiveness, and risk-taking - while also examining the moderating effects of demand uncertainty on these relationships. Based on survey data from 217 new ventures in China, the empirical findings indicate that: First, government support has an increasingly positive effect on innovativeness, whereas it has a decreasingly positive effect on proactiveness and a linearly positive effect on risk-taking. Second, demand uncertainty positively moderates the relationships between government support and each of the three dimensions of entrepreneurial orientation. This study theoretically enriches the understanding of factors driving entrepreneurial orientation and offers valuable theoretical insights for new ventures on how to effectively utilize government support to shape their entrepreneurial orientation.