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Annual Review of Organizational Psychology and
Organizational Behavior
Cross-Cultural Innovation and
Entrepreneurship
Ute Stephan1,2
1King’s Business School, King’s College London, London, United Kingdom;
email: ute.stephan@kcl.ac.uk
2Work and Organisational Psychology, Technische Universität Dresden, Dresden, Germany
Annu. Rev. Organ. Psychol. Organ. Behav. 2022.
9:277–308
The Annual Review of Organizational Psychology and
Organizational Behavior is online at
orgpsych.annualreviews.org
https://doi.org/10.1146/annurev-orgpsych-012420-
091040
Copyright © 2022 by Annual Reviews.
All rights reserved
Keywords
culture, entrepreneurship, innovation, comparative research, values, norms,
cultural practices
Abstract
How can culture help explain persistent cross-country differences in inno-
vation and entrepreneurship? This overview of cross-cultural innovation/
entrepreneurship research draws on the most prominent cultural frame-
works (by Hofstede, Schwartz, GLOBE, and Gelfand and colleagues). After
outlining similarities and differences between these frameworks, I discuss
theoretical perspectives of how culture shapes innovation/entrepreneurship
(culture t, culture mist, cultural social support, and culture as a boundary
condition) and give an overview of empirical research on culture and in-
novation/entrepreneurship. I conclude by outlining opportunities and best
practices for future research and practical implications.
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INTRODUCTION
Innovation and entrepreneurship contribute to competitiveness, job creation, and economic
growth (Praag & Versloot 2007). They can also aid in developing solutions to societal challenges
ranging from climate change to social inequality (Seelos & Mair 2017). For individuals, innova-
tion and entrepreneurship can be a source of meaningful work and well-being (Helzer & Kim
2019, Stephan 2018). Considering these benets, many policy makers are interested in supporting
innovation and entrepreneurship and often refer to the need to create an entrepreneurial culture
to do so.
Levels of innovation and entrepreneurship vary substantially across countries. These differ-
ences tend to be stable over time and can only partly be explained by formal institutions and
economic development (e.g., Freytag & Thurik 2010). This points to culture as an important ex-
planation, because culture—the shared values, norms, and practices of a society—is considered
slow to change (House et al. 2004).
The search for a link between culture and innovation and entrepreneurship can be traced
back to Max Weber’s (1930) work on the values, norms, and practices associated with the Protes-
tant work ethic that, he suggested, underpinned the rise of capitalism. When cross-country har-
monized data on innovation and entrepreneurship became available, researchers used key cul-
tural frameworks (e.g., Hofstede 2001, House et al. 2004) to relate culture to innovation and
entrepreneurship.
Yet, the last review of cross-cultural innovation and entrepreneurship research concluded that
ndings are inconsistent (Hayton & Cacciotti 2013), calling the value of cultural explanations
into question. Fortunately, research in this area is progressing rapidly, driven by data covering
an increasing number of countries and a better understanding of culture and different cultural
approaches (cultural values versus cultural practices/norms). With this expanded evidence base
and understanding, more consistent ndings are emerging, as I discuss in this article.
The next section introduces key terms, approaches to culture, cultural frameworks, and
methodological issues. The third section discusses theoretical perspectives of how culture shapes
innovation and entrepreneurship. The fourth section provides an overview of the main empirical
ndings in cross-cultural innovation and entrepreneurship research. The fth section summarizes
the ndings in relation to the theoretical perspectives and outlines research opportunities and best
practices for future research. The nal section discusses practical implications.
DEFINITIONS: INNOVATION, ENTREPRENEURSHIP, AND CULTURE
Innovation and Entrepreneurship
The term innovation refers to attempts “to develop and introduce new and improved ways of doing
things” (Anderson et al. 2014, p. 1289). Often, creativity as the generation of new and useful ideas
is differentiated from innovation, which concerns the implementation of these ideas to enhance
procedures, practices, or products (Anderson et al. 2014). Entrepreneurship refers to “new entry,”
typically through the creation of an organization through which an individual or team seeks to
realize a new venture idea (Davidsson 2015). Entrepreneurs are individuals who work for their
own account and at their own risk (Gorgievski & Stephan 2016).
Both innovation and entrepreneurship are proactive, self-starting behaviors that initiate change
(Frese & Gielnik 2014). They share the need to experiment in the face of uncertainty, for instance,
uncertainty about whether a new product, service, process, or business idea will be successful.
Such experimentation necessarily implies setbacks and failures through which innovators and en-
trepreneurs learn and adapt their ideas.
Stephan
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Innovation and entrepreneurship differ in terms of personal responsibility. Individuals and
teams engaged in innovation typically work in organizations that are owned and controlled by
someone else. By contrast, entrepreneurship combines ownership and control; in other words,
entrepreneurs are personally and legally responsible for all aspects of their business. Finally, not
all entrepreneurs are innovators, and not all innovations can be commercialized.
Culture: Denition, Approaches, and Frameworks
Culture refers to the shared values, norms, and practices of a society, thus characterizing collec-
tives or groups of individuals (House et al. 2004). Culture evolved to enable these collectives to
survive, live together productively, and successfully navigate their environment (Schwartz 2006).
Different frameworks and dimensions of culture exist, and navigating them can be challenging.
For instance, Hofstede (2001), Schwartz (2006), and the Global Leadership and Organizational
Behavior Effectiveness (GLOBE) project (House et al. 2004) all consider individualism as a di-
mension of culture. These three frameworks alone include four different conceptualizations and
eight different indices of individualism (Table 1); GLOBE offers parallel indices of individualism
values and practices.
A comprehensive discussion of existing cultural theories is beyond the scope of this article. In-
stead, this review considers the most commonly used cultural theories in cross-cultural innovation/
entrepreneurship research, which are those by Hofstede (2001), Schwartz (2006), the GLOBE
project (House et al. 2004), and Gelfand et al. (2011). Table 1 denes all of the cultural dimen-
sions covered in these frameworks and illustrates common themes. Before introducing the four
frameworks, I discuss the two main approaches of conceptualizing and assessing culture as cultural
values or as cultural practices/norms.
Cultural values. A long tradition in cross-cultural research views shared values as the dening
feature of cultures (Hofstede 2001, Schwartz 2006). Cultural values “express shared conceptions
of what is good and desirable in the culture, the cultural ideals” (Schwartz 2006, p. 139). The
measurement of culture from a values perspective proceeds in several steps. First, individuals are
asked to rate their values, such as how important having sufcient time for personal or family life
is in their ideal job (example individualism item in Hofstede 2001) or the degree to which being
“independent (self-reliant, self-sufcient)” is a guiding principle in their life (example cultural au-
tonomy item in Schwartz 1992, 1994). Second, the country means of each individual value item are
computed and factor-analyzed to arrive at a country-level factor solution of cultural dimensions.1
The GLOBE study shifted the reference from the individual to society and, in line with the notion
of values as cultural ideals, asked respondents how their culture (ideally) “should be.” An example
item is: “In this society, people should be encouraged to be: very concerned about others—not at
all concerned about others” (humane orientation values in House et al. 2004; emphasis in origi-
nal). Benetting from methodological advances, House et al. (2004) statistically veried cultural
sharedness and employed multilevel factor analyses to derive cultural dimensions.
Cultural practices/norms. Research in recent decades has identied cultural practices and norms
as a further approach to culture (Gelfand et al. 2011, House et al. 2004). This approach locates
culture in respondents’ intersubjective shared perceptions about their social environment (Chiu
et al. 2010). Culture in this perspective is anchored in the patterns of common behaviors that
1Schwartz used multidimensional scaling, a method similar to factor analysis.
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Table 1 Overview of cultural frameworks
Foc us Hofstede (2001) framework Schwartz (2006) cultural values GLOBEa(House et al. 2004)
Gelfand et al. (2006,
2011)
Relationship and
boundaries between
the individual and
the group
Individualism versus
collectivism (self- versus
work orientation; Brewer &
Venaik 2011): degree of an
individual’s integration into
their primary group, with a
focus on the work group
Autonomy: individual’s
uniqueness and pursuit of own
ideas (intellectual autonomy)
and of own positive affective
experiences (affective
autonomy)
Embeddedness (conservation):
individuals embedded in
collectives, group solidarity,
tradition, social order
In-group collectivism:b
Individuals express pride,
loyalty, and cohesiveness in
their organizations or
families (family collectivism;
Brewer & Venaik 2011).
Institutional collectivism:
concern for a collective
redistribution of resources
and collective action (risk
sharing in society)
Not applicable
Dealing with
unpredictability and
ambiguity
Uncertainty avoidance
(UA-stress; Venaik &
Brewer 2010): “level of
stress in a society in the
face of an unknown future”
(Hofstede 2001, p. 29)
Not applicable Uncertainty avoidanceb
(UA-rule orientation; Venaik
& Brewer 2010): use of
social norms, rules, and
procedures to enhance
predictability of future
Not applicable
Power inequalities
among individuals
and groups
Power distance: acceptance of
inequality, status, hierarchy,
and power differences (at
work)
Hierarchy: Unequal distribution
of power is legitimate;
inequality of resources and
roles ensures coordination.
Egalitarianism: People are equal,
with shared interests and
concern for one another, and
are willing to cooperate for the
common welfare.
Power distance:bdegree to
which equal versus unequal
distribution of power in
society is accepted
Not applicable
Performance and
control orientation
Masculinity versus femininity:
differentiation of
“emotional” gender roles
and styles of interaction;
male assertiveness, seeking
achievement and challenge
versus female nurturance,
modesty, and cooperation
(Hofstede 2001, p. 284)
Mastery: control of environment
through action, instigation of
change, reward for ambition
and success
Harmony: “tting in” and
appreciating the world “as is,”
protecting peace and nature
Performance orientation:b
encouragement and reward
for performance
improvement and excellence
Not applicable
Gender inequality Not applicable Gender egalitarianism:
collective concern about
minimizing gender
inequality
Not applicable
Nature of interpersonal
interactions
Not applicable Humane orientation:cbeing
fair, altruistic, generous,
caring, kind to others
Assertiveness:cbeing assertive,
confrontational, aggressive
to others
Not applicable
Time perspective Long-term orientation:
emphasis on the future,
thrift, and perseverance
(versus the past; Venaik
et al. 2013)
Not applicable Future orientation:bfocus on
future-oriented behaviors
(e.g., delaying gratication,
planning, investing) versus
the present (Venaik et al.
2013)
Not applicable
Restraint through
norms versus
tolerance of deviance
Indulgence versus restraint:
gratication versus control
of desires related to
enjoying life, regulated by
strict social norms
Not applicable Not applicable Tightness: strength of
social norms and
intolerance of
deviant behavior
aDimensions of values and practices.
bPractices of in-group collectivism (−), power distance (−), uncertainty avoidance (+), future orientation (+), and performance orientation (+) combine
into performance-based culture.
cHumane orientation (+) and assertiveness (−) combine into socially supportive culture.
Stephan
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structure societal interactions and that provide members of a culture with a “dominant logic of
action” (Stephan & Uhlaner 2010). Culture is measured through perceptions of common prac-
tices describing culture “as is” (the way people typically act) and sharedness is veried statistically.
Typical item referents are “in this society” or “in this country.” Example items are: “In this society,
people are generally: very concerned about others—not at all concerned about others” (humane
orientation practices in House et al. 2004) and “People in this country almost always comply with
social norms” (cultural tightness–looseness norms in Gelfand et al. 2011).
Cultural values versus practices/norms. The distinction between cultural values and practices/
norms is important (Frese 2015). First, cultural practices/norms are more consistently related
to objective, behavioral, and observational outcomes, whereas cultural values relate more consis-
tently to attitudinal measures (Gupta et al. 2004). Second, cultural values and practices/norms are
on average negatively correlated in the GLOBE study, which is the only study that assessed both
simultaneously (House et al. 2004). This negative correlation has been interpreted as a deprivation
effect, such that societies practicing, for example, high levels of uncertainty avoidance desire less
of it, and vice versa (Javidan et al. 2006). The exceptions to this pattern are gender egalitarian-
ism, where values and practice correlate positively, and in-group collectivism, where they do not
signicantly correlate ( Javidan et al. 2006).
Four frameworks of culture. The four frameworks differ in how they were developed and in the
samples used to generate the cultural indices for countries. Hofstede (2001) conducted a factor
analysis of survey data collected from IBM employees at the end of the 1960s/beginning of the
1970s to derive four dimensions of cultural work values: individualism, uncertainty avoidance,
power distance, and masculinity (see Table 1 for denitions). Subsequent studies collected data
from different types of samples. Taras et al. (2012) provided a meta-analytic summary and updated
time-adjusted country scores for the four indices. From today’s perspective, the content validity of
the items used by Hofstede can seem questionable, and most dimensions contain a mix of value,
attitude, and practice/norm questions (see the next section). A fth and a sixth dimension (Table 1)
were added later; I do not cover them in detail, as they have not yet attracted attention in cross-
cultural innovation/entrepreneurship research.
Schwartz (1992, 2006) conceptualizes values as guiding principles in peoples’ lives. He elabo-
rated separate individual- and culture-level value theories on the basis of samples of students and
teachers, surveyed at the end of the 1980s and 1990s. He later developed different questionnaires,
and data are now regularly available from population-representative samples through the Euro-
pean Social Survey program. The seven Schwartz cultural value dimensions are dened in Table 1.
Data on the Schwartz cultural value indices are available for 80 countries (Schwartz 2008).
The GLOBE project built on prior research and conceptualized a total of nine dimensions,
each measured as values and practices. Most dimensions carry labels similar to the Hofstede frame-
work [masculinity–femininity in Hofstede’s framework conceptually maps onto four dimensions
in the GLOBE framework (see also Peterson 2004) (Table 1)]. GLOBE surveyed managers from
local organizations in three matched industry sectors across 62 societies from 1995 to 1997 (House
et al. 2004). GLOBE practice/norm measures (“as is”) are frequently used in research. GLOBE
value measures (“should be”) are less frequently used and have been criticized as ambiguous in
terms of whether they capture projections of personally or socially desired values (Smith 2006).
The GLOBE 2020 project to update data on cultural practices is underway.
Gelfand et al. (2006) developed a theory of cultural tightness versus looseness that considers
the strength of social norms (for an overview, see Gelfand 2019). Tightness–looseness country
scores are based on data collected between 2000 and 2003 from matched samples composed of
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approximately 50% university students and 50% working adults from 33 countries (Gelfand et al.
2011).
Relationships Among the Four Cultural Frameworks
Table 1 highlights conceptual similarities among the four frameworks. Yet there are also unex-
pected empirical relationships, which are due to differences in the content of similarly labeled
dimensions and the measurement approach (values versus practices/norms). It is important to un-
derstand these differences because they can explain diverging ndings and help researchers design
meaningful robustness checks. Supplemental Appendix 1 presents the correlations among the
four cultural frameworks. I highlight salient relationships next.
The Hofstede and Schwartz frameworks converge in their respective indices of individualism/
autonomy–embeddedness and power distance/hierarchy–egalitarianism (see Table 1 for deni-
tions). The correlations are stronger among measures of individualism, which are value based in
both frameworks. By contrast, Hofstede’s (2001, pp. 85–86) power distance index is based on one
value and two practice items. The latter capture perceptions of typical leader–subordinate rela-
tionships. Correlations among other indices from the two frameworks are weak or insignicant
(Supplemental Appendix 1).
Despite similar labels, the Hofstede and GLOBE cultural indices often correlate only
weakly or in unexpected ways (e.g., strong correlations across different indices; Supplemental
Appendix 1). Because the Hofstede and GLOBE indices are often used as substitutes for one
another, I discuss differences in the content of the indices and their relationships in more detail.
On the basis of item analysis, Brewer & Venaik (2011) suggest that Hofstede individualism is a
measure of cultural values prioritizing self- versus work orientation (see also Bond 2002) and that
GLOBE in-group collectivism is a measure of family collectivism, whereas GLOBE institutional
collectivism reects institutional choices supporting collective action, resource sharing, and risk
sharing. Hofstede individualism values correlate positively with GLOBE in-group collectivism
practices but not with values (nor with institutional collectivism practices or values). Brewer &
Venaik (2011) suggest that national wealth might confound the relationship between Hofstede
individualism values and GLOBE in-group collectivism practices, as both indices correlate sub-
stantially with national wealth. An alternative explanation is that Hofstede values (assessed mostly
in the 1960s and 1970s) may have been effective sources of guidance that led societies to adopt
individualistic practices by the mid-1990s, when GLOBE collected its data.
Hofstede uncertainty avoidance, or UA, is best understood as a measure assessing collective lev-
els of stress originating from uncertainty (Hofstede 2001, Sully de Luque & Javidan 2004), leading
Venaik & Brewer (2010) to suggest labeling it UA-stress. By contrast, GLOBE’s UA captures rule
orientation; that is, it emphasizes rules, procedures, and norms as a means to avoid uncertainty
(Sully de Luque & Javidan 2004). These differences in content help explain the high negative
correlation between Hofstede UA and GLOBE UA practices despite Hofstede UA giving greater
weight to practice over value items (Venaik & Brewer 2010). In summary, it seems that countries
with high GLOBE UA (rule orientation) practices create predictability that helps alleviate stress
(low Hofstede UA-stress).
For power distance, the Hofstede index is moderately positively correlated with GLOBE power
distance practices and not correlated with GLOBE power distance values. These relationships are
expected, considering that Hofstede power distance captures mainly practices, as discussed above.
That the relationship is not stronger is likely because GLOBE assesses power distribution in
society in general, including, but not limited to, manager/leader–employee relationships, as in the
Hofstede index.
Stephan
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Hofstede masculinity does not signicantly correlate with the four GLOBE indices that assess
aspects associated with it, namely gender egalitarianism, performance orientation, assertiveness,
and humane orientation (Peterson 2004). The Hofstede masculinity index is based on eight work
goals that include both “social” (feminine nurturance, cooperation, and friendliness) and “ego”
work goals (masculine assertiveness, achievement, and challenge striving) (Hofstede 2001, p. 284).
The corresponding GLOBE dimensions are more narrowly conceptualized (focused on gender,
performance/achievement, and assertive versus friendly cooperative interaction, respectively) and
broader (referring to society in general) than the Hofstede work goals. These differences likely
explain the low correlation.
The Hofstede dimension of long-term orientation conceptually maps onto GLOBE’s future
orientation values, yet the indices are weakly negatively correlated. Both are value indices but have
different foci (Venaik et al. 2013).Hofstede long-term orientation is a bipolar dimension contrast-
ing past-tradition values with valuing savings for the future (thrift). GLOBE future orientation
is a unipolar measure that emphasizes planning for the future relative to an orientation on the
present (rather than the past; Venaik et al. 2013).
Gelfand and colleagues’ tightness norms correlate in expected ways with GLOBE cultural
practices, positively with in-group and institutional collectivism and negatively with gender egali-
tarianism practices and assertiveness. Tight cultures often have a history of threat, which requires
members of these societies to rely on one another for survival (Gelfand et al. 2011, Roos et al.
2015). This typically goes along with maintaining traditional social hierarchies, including gen-
der inequality. Similar relationships are observed with Hofstede individualism (cultural tightness
is positively related to collectivism) and high power distance, as well as with the equivalent di-
mensions of embeddedness–autonomy and hierarchy–egalitarianism in the Schwartz framework
(Supplemental Appendix 1; for more detail, see Gelfand et al. 2011).
Further Methodological Issues
Other methodological issues are salient in cross-cultural innovation/entrepreneurship research.
First, national wealth/afuence, typically measured as gross domestic product (GDP), shows sub-
stantive relationships with culture. Researchers disagree about whether culture should be regarded
as a driver of national wealth or whether national wealth leads to the development of individual-
istic, more egalitarian, rule- and future-oriented cultures (e.g., House et al. 2004, Inglehart 2006,
Schwartz 2006). Practically speaking, many studies control for GDP to assess whether culture has
explanatory power beyond GDP, which is considered a more parsimonious explanation (Leung &
Wang 2015).
Second, range restriction may lead to biased explanations and underestimation of the effect of
culture. Researchers should be mindful of the diversity of cultures in their study. For instance, the
effects of collectivism may be underestimated because data are more easily available for more
afuent countries, which are more individualistic. Range restriction can occur for all cultural
dimensions.
Third, cross-cultural research is inherently multilevel and can suffer from unique biases. The
disaggregation bias (or ecological fallacy) warns that relationships at the level of countries may not
generalize to individuals. Conversely, the aggregation bias (or reverse ecological fallacy) highlights
that individual-level relationships may not generalize to the country level (Hofstede 2001, Smith
2002). An example of aggregation bias is the assumption that individualistic cultures are more
innovative or entrepreneurial solely on the basis of research that observed such a link for individ-
uals. This assumption was prevalent in early research on culture and entrepreneurship (Mueller
& Thomas 2001, Thomas & Mueller 2000). It is true that individuals high in openness to change
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produce more innovate work (for a review, see Arieli et al. 2020) and that entrepreneurs across
cultures endorse similar values related to self-direction, achievement, and power (McGrath et al.
1992, Noseleit 2010). Yet, cultures are more than “king sized” individuals (Hofstede 2001). For
instance, noninnovators/nonentrepreneurs in a culture may not behave individualistically when
they support innovators/entrepreneurs to implement their ideas. I next discuss different theoret-
ical perspectives on this issue.
FOUR THEORETICAL PERSPECTIVES ON HOW CULTURE AFFECTS
INNOVATION AND ENTREPRENEURSHIP
Culture t, culture mist, cultural social support, and culture as a cross-level boundary condition
are four different theoretical explanations of how culture affects innovation and entrepreneur-
ship. The culture t perspective emphasizes the alignment and congruence of cultural char-
acteristics with characteristics of innovation/entrepreneurship (Davidsson 1995, Davidsson &
Wiklund 1997, Tung et al. 2007). There are two versions of culture t. First, congruent cul-
tures may produce more innovators and entrepreneurs, termed the aggregate trait (Davidsson
1995) or supply-side view (Stephan & Uhlaner 2010, Taylor & Wilson 2012). The greater sup-
ply of innovating/entrepreneurial individuals in a country will, in the aggregate, lead to more
innovation/entrepreneurship in that country.For instance, individualistic cultures are assumed to
facilitate innovation/entrepreneurship because they are home to more individuals with individ-
ualistic values, some of whom will engage in innovation/entrepreneurship. This aggregate trait
argument aligns with the cultural values approach.
Second, congruent cultures may support innovation/entrepreneurship because in these cul-
tures innovative/entrepreneurial actions, work, and careers are regarded as desirable and
worthwhile—that is, legitimate. This version of the culture t perspective is termed societal legit-
imation (Etzioni 1987) or demand-side view (Stephan & Uhlaner 2010, Taylor & Wilson 2012).
For instance, funders, suppliers, and customers may be more likely to provide nancing to, contract
with, and buy from innovative rms/start-ups in cultures where innovation and entrepreneurship
are more legitimate. Legitimacy is a sociological concept (Suchman 1995). Cultural values and
practices/norms map onto different forms of legitimacy. Cultural values can be understood as in-
junctive norms that confer moral legitimacy (i.e., what is good and desirable), while cultural prac-
tices represent descriptive norms based on observations of typical behavior (Frese 2015, Stephan
& Uhlaner 2010) and which confer cognitive legitimacy (i.e., how things are done is taken for
granted; Suchman 1995).
The culture mist perspective emphasizes misalignment of culture with characteristics of
innovation/entrepreneurship and implies compensation. For instance, individuals may innovate
or start a business because they are different, or face needs that are different, from the culture that
surrounds them. Thus, their actions compensate for what their cultural context cannot provide.
This perspective often emphasizes individual dissatisfaction with existing conditions such that in-
dividuals innovate because they have needs that mainstream products or services do not cater for
(von Hippel 1986), or they start businesses because they nd work in mainstream organizations in
uncertainty-avoidant cultures too rigid and rule oriented (Wennekers et al. 2007). The focus on
mist with current conditions aligns with cultural practices (how things are typically done).
The cultural social support perspective proposes that innovation and entrepreneurship thrive
in a societal climate in which people in general are friendly and cooperative and support one an-
other (Stephan & Uhlaner 2010). It refers to cultural practices/norms of social support and high-
lights two complementary explanations that are anchored in different literatures. First, it aligns
with the concept of culture-level social capital as used in political science and sociology, that is,
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as an instantiated informal norm that promotes cooperation (Fukuyama 2001, p. 7; Stephan &
Uhlaner 2010). In supportive cultures, it is easier for innovators/entrepreneurs to draw on the
informal support of others, including “others” who are strangers.2This support includes ac-
cess to new information and feedback, informal capital, and emotional social support to over-
come setbacks. In summary, supportive cultures are rich in so-called weak-tie social capital, which
enables entrepreneurs and innovators to access nonredundant information from distant others
(Granovetter 1973). The cultural social support perspective is a specic case of culture mist
because it emphasizes cultural norms of kindness and cooperation, whereas innovators and en-
trepreneurs are viewed as individualistic, competitive individuals.
Second, the cultural social support perspective aligns with the concept of psychological safety
in organizational research, that is, shared perceptions of whether it is safe to take interpersonal
risk (Edmondson & Lei 2014). Psychologically safe environments help foster innovation by mit-
igating the social risks associated with experimenting and failing (Baer & Frese 2003). It is easier
for individuals to speak up and try out new things in psychologically safe environments, as mis-
takes are treated as an element of experimentation rather than as personal failures. Conversely,
entrepreneurs worry about the social stigma that failing in their efforts may carry (Cardon et al.
2011).
Rather than conceptualizing culture as a direct antecedent to innovation and entrepreneurship,
the theoretical perspective of culture as a boundary condition views culture as a moderator of other
relationships, typically as a cross-level moderator of individual- or rm-level relationships. Cul-
ture can amplify or suppress other relationships, and the nature of the moderation effect might be
theorized from the culture t, the culture mist, or the cultural support perspective.For instance,
research drawing on the culture t perspective nds that being located in uncertainty-tolerant
cultures allows rms to derive greater performance benets from engaging in variance-inducing
strategies such as innovation (Mueller et al. 2013) and entrepreneurial orientation (EO) (Saeed
et al. 2014). Uncertainty tolerance is thought to legitimize and enable the exibility and experi-
mentation on which these strategies rely,resulting in a stronger relationship between these strate-
gies and rm performance.
OVERVIEW OF EMPIRICAL RESEARCH ON HOW CULTURE AFFECTS
INNOVATION AND ENTREPRENEURSHIP
Of the four theoretical perspectives discussed in the previous section, empirical research started
from a culture t perspective to understand how culture affects innovation/entrepreneurship
and focused on the cultural dimensions of individualism, uncertainty avoidance, power distance,
and masculinity (Hayton et al. 2002, Nakata & Sivakumar 1996, Shane 1993). Individualistic and
uncertainty-tolerant cultures were argued to benet innovation and entrepreneurship, because
the latter create novelty and uniqueness (congruent with individualism) and entail experimenta-
tion and risk (supported in uncertainty-tolerant cultures). Innovation and entrepreneurship may
also be aided by equality and at power structures (versus power distance) that enable the exchange
of ideas. Entrepreneurship researchers expected that masculinity, especially its achievement- and
performance-oriented facet, would encourage entrepreneurship (e.g., Hayton et al. 2002). By con-
trast, innovation researchers (e.g., Nakata & Sivakumar 1996) argued that femininity (versus mas-
culinity) would aid the development of ideas by creating a supportive social climate for exchange
2The concept of cultural social support differs from collectivism, where “others” are members of one’s
in-group.
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and experimentation (Baer & Frese 2003). The latter argument is consistent with the cultural so-
cial support perspective (Stephan & Uhlaner 2010). Research on cultural norms of tightness also
alluded to culture t predictions (Harrington & Gelfand 2014). Generating new ideas or busi-
nesses would be more legitimate in loose (versus tight) cultures, which tolerate deviant behaviors
and experimentation rather than emphasize conformity with social norms.
Empirical research, however, did not support the culture t perspective as the single explana-
tion of how culture affects innovation and entrepreneurship. Instead, as the overview of empirical
evidence in this section shows, different theoretical perspectives received support contingent on
the phase of the innovation/entrepreneurship process that the research focused on. Innovation/
entrepreneurship can be understood as a process from generating ideas to implementing them,
followed by a phase of sustaining performance (Nakata & Sivakumar 1996, Shepherd et al. 2019).
Critically, each phase involves specic demands, tasks, and requirements, which help illuminate
the distinct effects of culture in each phase. For instance, while individualism can help stimulate
individual creativity,collectivism aids the coordination of resources and employees so as to derive
performance benets from the introduction of new offerings.
Figure 1 shows the phases of the innovation/entrepreneurship process. The rst, originating
phase involves individual and team creativity to generate new ideas and identify new opportu-
nities. The second, implementing phase involves turning ideas into products/services, processes,
or operating businesses, which requires mobilizing resources and inuencing others to engage
and support the new solution/business and build legitimacy for it. In the third, performing phase,
an organization needs to coordinate its employees and inuence stakeholders and customers in
order to be able to sustainably deliver and sell a new offering for a surplus. The fourth phase,
persisting or exiting, involves adapting offerings to sustain performance or disengaging from an
innovation/business.
These phases reect the nature of the dependent variables in empirical cross-cultural
research—except for the fourth phase, which has not yet been researched and is shown in Figure 1
as inspiration for future research. Measures of innovation used in cross-cultural research align with
the originating phase, as they reect new knowledge creation. Measures of entrepreneurship align
with the implementing phase, as they focus on implementing an idea through the creation of a new
business. The performance phase aligns with studies that considered whether culture moderates
the effects of variance-inducing rm strategies (innovation or EO) on rm performance.
Figure 1 summarizes the empirical ndings discussed in this review. The pattern of ndings
was consistent with the culture t perspective for the originating phase, focused on innovation.
The cultural social support perspective offered the most consistent ndings for the implementing
phase, focused on entrepreneurship. For the performing phase, the distinct pattern of ndings
aligned with the perspective of culture as a boundary condition.
In the remainder of this section, I rst discuss the typical measures of innovation and en-
trepreneurship used in cross-cultural research, which helps explain how they map onto the origi-
nating and implementing phases. I then discuss research relating to the originating, implementing,
and performing phases. I close with a reection on multicultural experience and innovation/
entrepreneurship. Throughout, I focus on higher-quality studies (Supplemental Appendix 2
provides details about the individual studies included in this review).
Measures of Innovation and Entrepreneurship: Originating
and Implementing Ideas
Measures of innovation used in cross-cultural research reected the originating phase. They were
typically indicators of inventiveness and new knowledge creation, such as the national per capita
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Uncertainty
(stress)
tolerance
Implementing
Implementing novel ideas, starting a business
Demands: Mobilize support and resources,
build legitimacy for new oering
Performing
Delivering oerings to generate surplus
Demands: Coordinate employees and
stakeholders to derive surplus from
innovative/entrepreneurial strategies
Persisting
versus exiting
Demands: Sustain and
rene innovation/business,
adapt or abandon in response
to shifting customer needs
Originating
Generating new ideas, identifying opportunities
Demands: Develop original solutions
Culture t
Individualism
(values,
practices)
Looseness
Socially
supportive
cultural practices
Culture as boundary condition
Cultural
values
Specic
culture t
Cultural social supportac
d
b
X
Uncertainty
(stress/rule)
tolerance
Collectivism
(values, practices)
Innovation
• Empirical support for which perspective?
Culture t
• Typical study: Nation-level regression on
patent or trademark registrations
• Typical ndings
Innovation thrives in cultures that:
–value individualism and uncertainty
stress tolerance
–practice in-group individualism
–have loose (versus tight) norms,
evidence for mechanisms
• Further ndings
–Culture mist compensates for eects
of leadership and work settings
–Cultural dierences in the nature and
understanding of innovation
• Cultural frameworks
–Hofstede
–Less frequently researched: Schwartz values,
GLOBE practices, cultural tightness
Entrepreneurship
• Empirical support for which perspective?
Cultural social support
• Typical study: Nation- or multilevel
regression on national entrepreneurship
rates, individuals’ start-up actions or self-
employment
• Typical ndings
–No consistent eect of cultural values
–Entrepreneurship thrives in cultures
with socially supportive cultural
practices, evidence for mechanisms
• Further ndings
Specic culture t with individualistic
performancebased cultures for particular
types of entrepreneurship and individuals
(formal entrepreneurship, self-ecacy)
• Cultural frameworks
–GLOBE practices
–Less frequently researched: Hofstede
framework, Schwartz values, GLOBE values,
cultural tightness
Innovation and entrepreneurial
orientation as variance-inducing
strategies of rms
• Empirical support for which perspective?
Culture as a boundary condition
• Typical study: Meta-analysis with
moderation tests
• Typical ndings
The performance benets of innovation
and entrepreneurial orientation are greater
in collectivist and uncertainty-tolerant
cultures (both uncertainty/stress-tolerant
and rule-exible)
• Further ndings
Similar moderating eects of culture to
strengthen the link of antecedents of
innovation with innovation and of
planning with small-rm performance
• Cultural frameworks
–Hofstede and GLOBE practices
No research
Consistent support
across studies
Some support and
not as well researched
Conicting ndings
X
Figure 1
(To p ,white boxes) Overview of main ndings and the conceptual perspectives they support in cross-cultural innovation/entrepreneurship
research, organized by the four phases (a–d) of the innovation/entrepreneurship process (orange boxes). (Bottom,blue boxes) Details of the
typical analysis approaches, ndings, and cultural frameworks used.
rates of patent or trademark registrations or of scientic publications in peer-reviewed journals.
Some recent research used the two output pillars of the Global Innovation Index (Dutta et al.
2018). One of these integrates patent registrations with related measures (e.g., high-tech exports,
information and communication technology services as share of trade); the other, the creative
output pillar, includes trademarks as well as online and cultural creativity.
Measures used in cross-cultural entrepreneurship research typically reect the implementing
phase, in which ideas are implemented through launching a business. They included the national
rate of new business registrations, the national self-employment rate, and most frequently indi-
cators of “new entry” from the Global Entrepreneurship Monitor (GEM) (Reynolds et al. 2005).
GEM conducts annual population-representative surveys to identify the share of the adult pop-
ulation that is taking steps to set up a business (nascent entrepreneurship), has recently started a
business (up to 3.5 years old; new entrepreneurship), or is running an established business (sim-
ilar to the rate of self-employment). Numbers of nascent and new entrepreneurs are sometimes
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combined into a total early-stage entrepreneurship rate. This rate can be problematic, because it
can reect high numbers of nascent entrepreneurs, new entrepreneurs, or a balance of both, with
different implications. High numbers of nascent (relative to new) entrepreneurs imply an inef-
cient business creation process in which many people are trying but failing to set up a business.
In contrast, high numbers of new (relative to nascent) entrepreneurs indicate an efcient business
creation process in which most succeed in creating a business (Bergmann & Stephan 2013).
Originating Ideas: Cross-Cultural Innovation Research
Figure 1asummarizes the ndings discussed in this section. They were broadly consistent with
the culture t perspective, wherein innovation thrives in individualistic (versus collectivistic),
uncertainty-tolerant (versus -avoidant), and loose (versus tight) cultures. Additionally, research
investigated how to innovate in cultures that hamper innovation (e.g., uncertainty-avoidant and
tight cultures). This research in combination with experimental evidence indicated important cul-
tural differences in the understanding and nature of innovation itself. I rst discuss research using
cultural values followed by research using cultural practices as well as cultural differences in the
understanding of innovation.
Innovation and cultural values. Aligned with the culture t perspective, the most consistent
nding across studies considering cultural values was that individualistic cultural values facilitate
innovation. There was also evidence that uncertainty/stress-tolerant cultures and, to a lesser ex-
tent, egalitarian (versus power-distant) cultures aid innovation.Innovation was measured predom-
inantly as national rates of new knowledge generation (e.g., patent rates), raising concerns about
potential confounding effects of formal institutions. Yet ndings were mostly replicated in studies
using surveys of consumer innovativeness and championing of innovation at work. In terms of
theoretical explanations, studies referred to both versions of the culture t perspective (aggregate
trait and societal legitimation): They hypothesized a greater supply of innovators in individualistic,
uncertainty-tolerant, and egalitarian cultures and proposed that innovative actions are encouraged
because they are regarded as desirable and legitimate in these cultures. However, no studies tested
these mechanisms. This research relied mostly on the Hofstede framework, occasionally using
Schwartz values for robustness checks.
Early studies investigated the Hofstede dimensions individually in relation to innovation across
33 diverse countries3(Shane 1992, 1993). Individualistic, more egalitarian (low–power distance)
and uncertainty/stress-tolerant societies had higher rates of patent and trademark registrations.
Masculinity had no effect. Efrat (2014) replicated that uncertainty/stress tolerance facilitated
higher rates of innovation (including patents, scientic publications, and high-technology exports)
across 35 developed countries. Effects for the other three cultural indices were less consistent. Sim-
ilarly, Rinne et al. (2013) replicated the positive relationship of individualism, but not the other
indices, with two creativity measures across 43 diverse and 23 European countries.
Other research considered only individualism and replicated its positive relationship with in-
novation across 62 (Taylor & Wilson 2012) and 83 (Bennett & Nikolaev 2021) diverse countries,
using sophisticated measures of innovation (e.g., citation-weighted patents). The ndings were
replicated for Schwartz cultural autonomy and embeddedness and the meta-analytically updated
Hofstede individualism scores (see Supplemental Appendix 2 for details).
3In this review, I refer to “diverse countries” when a study included a mix of developed and less developed
countries.
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Patent rates were the most frequently used measure of innovation. They are an objective
indicator, but they can be protected and commercialized only when strong formal institutions
(intellectual property rights and the rule of law) exist, because patent information is publicly
available. Since individualism correlates with economic development and the quality of formal
institutions (Hofstede 2001), positive effects for individualism may be confounded by facili-
tating effects of formal institutions. Cross-cultural studies of individual-level innovation can
sidestep these confounding effects. Two studies corroborated the positive effects especially of
individualistic and uncertainty/stress-tolerant cultures for individual innovation of consumers
and organizational employees. First, Steenkamp et al. (1999) surveyed 3,283 consumers from 11
European Union countries about their innovativeness. Consumer innovativeness is an individual
consumer’s propensity to deviate from established purchasing patterns to trying new products/
services (Steenkamp et al. 1999). Individualistic, uncertainty/stress-tolerant, and masculine
cultures facilitated consumer innovativeness. Power distance was not investigated.
Second, culture can shape employees’ preferences of idea championing, that is, how new ideas
should be introduced to minimize resistance and increase adoption. Shane (1995) surveyed em-
ployees in 68 diverse countries and found that, in uncertainty/stress-tolerant cultures, employ-
ees preferred innovation champions to facilitate networks, engage in transformational leadership,
and bypass organizational norms and control/monitoring mechanisms. An earlier version of this
study spanning 30 diverse countries found that specic innovation championing strategies aligned
with specic cultural dimensions (Shane 1995). High power distance aligned with preferences for
seeking support from authority, uncertainty/stress tolerance aligned with preferences for a exi-
ble autonomous approach (versus conforming to norms), and collectivism was weakly related to
preferring championing strategies that appealed for cross-functional support.
In related research on workplace innovation, two meta-analyses considered the cross-cultural
effectiveness of leadership styles on employee innovation using Hofstede indices (Lee et al. 2020,
Watts et al.2020). Both investigated culture as a boundary condition, unlike the research discussed
above that focused on direct effects. These meta-analyses offer insights into how leadership be-
havior can mitigate the effects of cultures detrimental to innovation. They found compensatory
effects (culture–leadership mist) such that high uncertainty/stress avoidance (Watts et al. 2020)
and, to a lesser extent, high power distance (Lee et al. 2020, supplementary material in Watts
et al. 2020) rendered leadership more consequential for employee innovation. Watts et al. (2020)
specically considered transformational leadership in their meta-analysis of 81 effect sizes across
17 diverse countries. Uncertainty/stress avoidance and high power distance strengthened the ef-
fect of transformational leadership on employee innovation. In uncertainty-avoidant and power-
distant cultures, innovation is particularly stressful and risky and may challenge power structures.
Transformational leaders can compensate for this negative effect of culture by providing direction,
support, reassurance, and a positive vision of the future, thereby mitigating employees’ uncertainty
and stress (Watts et al. 2020). Lee et al. (2020) investigated different leadership styles but consid-
ered fewer primary studies and countries than did Watts et al.(2020) and found fewer moderating
effects of power distance.
Innovation and cultural practices/norms. Research on cultural practices/norms and innovation
departed from the assumption of culture t. Specically, innovation as a variance-inducing activ-
ity that involves experimentation and is driven by individual agency would be more legitimate in
cultures practicing individualism and in cultures with loose social norms that tolerate deviance.
Overall, the ndings were consistent with this perspective: Innovation thrived in cultures practic-
ing in-group individualism (just as it did in cultures that valued individualism) and where cultural
norms were loose (rather than tight). Evidence that some innovation was nevertheless possible
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in tight cultures points to culturally appropriate types of innovation and cultural differences in
the understanding of innovation. I next outline ndings on individualism practices followed by
research on cultural tightness. I return to cultural differences in the nature of innovation in the
following section.
Only one study investigated GLOBE practices. Taylor & Wilson (2012) used GLOBE prac-
tices as a robustness check for their ndings, reported above, that Hofstede individualism benet-
ted innovation. They found that in-group individualism (versus collectivism) practices facilitated
innovation equally. Unexpectedly, institutional collectivism practices that encourage societal risk
sharing also supported innovation. This may be because innovation often entails wider benets
for society in addition to generating returns for the innovator.
Four studies reported evidence that cultural looseness (versus tightness) aided innovation
(Chua et al. 2015, 2019; Harrington & Gelfand 2014; Jackson et al. 2019). Harrington & Gelfand
(2014) found that tightness correlated negatively with per capita rates of patents and ne artists
across 50 US states. Similarly, decreasing cultural tightness in the United States from 1800 to 2000
was related to increasing innovation ( Jackson et al. 2019), although whether changes in cultural
tightness preceded changes in innovation was unclear ( Jackson et al. 2019).
Research by Chua and colleagues replicated these innovation-facilitating effects of cultural
looseness in the context of international crowdsourcing contests4(Chua et al. 2015) and for rad-
ical innovation across Chinese provinces (Chua et al. 2019). These studies additionally offered
insights into the underlying mechanisms of culture t (self-selection, legitimacy, aggregate trait
view). First, in the crowdsourcing study, tightness led to self-selection: Innovators residing in
tight cultures were less likely to engage and succeed in idea contests. Second, the same study
found that new ideas/innovations were less legitimate in tight cultures: Audiences (companies)
based in tight cultures were less receptive to foreign ideas. Third, the study of innovation across
31 Chinese provinces reported evidence aligned with the aggregate trait view: Individuals living in
tighter provinces scored lower on a measure of trait creativity than those living in looser provinces.
While cultural looseness generally aided innovation, Chua and colleagues showed how cultural
tightness could also support innovation. First, crowdsourced ideas were more acceptable when
both the innovator and the adopter audience were from tight cultures (Chua et al. 2015). Second,
tightness benetted incremental (as opposed to radical) innovation. Specically, in culturally tight
Chinese provinces, gradual improvements were preferred over radical changes (Chua et al. 2019).
These ndings point to cultural differences in the understanding and nature of innovation.
Cultural differences in the nature and understanding of innovation. A line of experimental
research (see Leung & Wang 2015 for a review) demonstrated that implicit theories of innovation
vary across cultures. Asian cultures emphasize the usefulness of ideas (important for implementa-
tion and diffusion of innovations), whereas Western cultures value the generation of novel ideas
over idea usefulness (Loewenstein & Mueller 2016, McCarthy et al. 2018). This observation ac-
cords with meta-analytic ndings that idea generation is more strongly related to idea implemen-
tation in cultures practicing in-group collectivism (Sarooghi et al. 2015). In collectivist cultures,
individuals and teams may generate more useful ideas, which should be easier to implement. Ad-
ditionally, collectivism facilitates coordination within a team or organization, which should help
its members work together more effectively to implement ideas.
4In crowdsourcing, companies post idea contests (e.g., to nd new ideas for consumer products) that are
broadcast internationally.Innovators from anywhere can submit ideas. The company then selects and pays for
the winning ideas.
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Further research explored how culturally contingent understandings of innovation are primed
and reinforced by the situational context to discern how changes to work settings may nullify or
reverse cultural differences in innovation (Erez & Nouri 2010). In an experiment, Nouri et al.
(2015) manipulated social context as working alone (individualistic), in a team (collectivistic), or
in the presence of a supervisor (power distant). American but not Chinese participants produced
fewer ideas and elaborated them less when they worked in a group, which does not match the
American cultural preference for individualism and triggers concerns about social loang. Chi-
nese but not American participants produced fewer original ideas in the presence of a supervisor,
because the supervisor acts as a prime for power distance, making idea usefulness, rather than
novelty, a salient norm. Similarly, Liou & Lan (2018) found that Asian–Western differences in
innovation were evident only when cultural norms were made salient by asking individuals both
to select/evaluate (versus generate) ideas, thereby priming usefulness (versus novelty) considera-
tions, and to work in a group (versus alone), thereby priming collectivism (versus individualism).
Future research could explore how work design itself (the organization of tasks for individuals and
groups) may be shaped by culture (Erez 2010) to further unpack cultural differences in innovation.
Implementing Ideas: Cross-Cultural Entrepreneurship Research
Figure 1bsummarizes the ndings discussed in this section. Specically, there were no consis-
tent ndings for research on cultural values and entrepreneurship, for both methodological and
substantive reasons, outlined below. By contrast, consistent ndings emerged for cultural prac-
tices, especially in line with the cultural social support perspective. There was some evidence for
a specic form of culture t. I rst discuss research using cultural values and then turn to cultural
practices/norms.
Entrepreneurship and cultural values. Researchers applied the Hofstede, GLOBE, and
Schwartz theories of cultural values. There were no consistent ndings overall for how cultural
values related to entrepreneurship. For instance, there was evidence for a negative, no, and a pos-
itive relationship with individualism and uncertainty avoidance, even for studies using the same
cultural framework. The methodological reasons for this divergence include (a) differences in the
diversity of country samples (developed/afuent versus diverse countries), (b) varied measures of
entrepreneurship (self-employment, nascent and new entrepreneurship alone or combined), and
(c) use of original versus updated Hofstede indices. Methodological issues aside, one study sug-
gested that values as cultural ideals may not relate directly to entrepreneurship but instead may
shape intervening causal processes (Stephan & Pathak 2016). I next describe research on cultural
values and entrepreneurship in more detail.
Three studies used the Hofstede indices of culture. Harms & Groen (2017) employed meta-
analytically derived updated indices (Taras et al. 2012). Across 29 diverse countries, individualism
was positively related to a country’s rate of new entrepreneurs, in direct contrast to an earlier
study (Pinillos & Reyes 2011) that found a positive relationship of collectivism with total early-
stage entrepreneurship and with opportunity and necessity entrepreneurship across 52 diverse
countries. Harms & Groen (2017) also reported a negative relationship for uncertainty avoid-
ance; in contrast, Wennekers et al. (2007) found a positive relationship of uncertainty avoidance
with self-employment across 22 developed countries. Harms & Groen (2017) found no signicant
relationships of masculinity and power distance with the rate of new entrepreneurs and, further-
more, no relationship of culture with high growth and social entrepreneurship.
The study by Pinillos & Reyes (2011) illustrates the importance of considering a diverse sam-
ple of countries, both economically developed and developing, to avoid concerns about range
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restriction in culture. While Hofstede collectivism related positively to entrepreneurship across
52 diverse countries, GDP moderated this relationship, such that individualism was positively
related to entrepreneurship in more developed countries and collectivism in less developed coun-
tries. Thus, considering solely developed countries can lead to different, even opposite conclusions
about the role of culture in entrepreneurship.
Two multilevel studies related Schwartz’s cultural values to entrepreneurship. They identied
opposing effects for cultural values related to power distance. Whereas Morales et al. (2019) found
a positive effect of egalitarianism across 28 European countries, De Clercq et al. (2013) identied
a positive effect of hierarchy on entrepreneurship across 32 diverse countries. Again, the opposing
ndings are likely due to the different countries considered (mainly afuent European countries
versus a mix of developed and developing countries), although the two studies also used different
measures of entrepreneurship (self-employment versus total early-stage entrepreneurship). In ad-
dition, Morales et al. (2019) identied positive effects of high mastery, and De Clercq et al. (2013)
found a positive effect of high embeddedness.
The study by Morales et al. (2019) was one of the few that directly tested the culture mist
perspective by examining the (mis)alignment of personal and cultural values through cross-level
interaction effects. Individuals holding personal values associated with entrepreneurship (high
openness to change and self-enhancement) were more likely to be entrepreneurs in countries
where cultural values were stacked against entrepreneurship (low mastery and low egalitarian-
ism). Therefore, individual entrepreneurial values appeared to compensate for the lack of en-
trepreneurial cultural values, suggesting that in more adverse cultural environments only individ-
uals who are strongly motivated by their values select into entrepreneurship. Liñán et al. (2016)
observed similar relationships across Spanish regions. However, this culture mist effect appeared
to be specic to individual values. De Clercq et al. (2013) found evidence of culture t for individ-
uals’ entrepreneurial self-efcacy. Entrepreneurial self-efcacy related more strongly to being a
start-up entrepreneur in more individualistic and egalitarian cultures (low embeddedness and low
hierarchy). There were no similar alignment effects for individuals’ social or nancial capital.
Two studies employing multilevel research using GLOBE cultural values found either no
effect (for in-group and institutional collectivism, rule-oriented uncertainty avoidance, perfor-
mance orientation, and assertiveness values; Autio et al. 2013) or a positive effect for rule-oriented
uncertainty-avoidance values and no effect for in-group collectivism values (Stephan & Pathak
2016). Both studies examined 42 diverse countries and used GEM entrepreneurship indicators.
Furthermore, Stephan & Pathak (2016) demonstrated that cultural values are indirectly related
to entrepreneurship via the shaping of cultural leadership ideals that legitimize entrepreneurs as
leaders. In contrast, the corresponding cultural practices had direct effects on entrepreneurship.
These authors suggested that cultural values reect societal ideals and aspirations that do not nec-
essarily guide specic actions or translate into practices (recall that cultural values and practices
are typically negatively related).
Entrepreneurship and cultural practices/norms. Unlike research on cultural values, research
on GLOBE cultural practice and entrepreneurship offered more consistent ndings across studies
and measures of entrepreneurship. With one exception,these studies used GLOBE cultural prac-
tices. The exception was a study of cultural tightness–looseness (Harms & Groen 2017), which
found no relationship between tightness, either on its own or in interaction with the Hofstede
indices, and different types of entrepreneurship. It seems too early to draw conclusions about
cultural tightness on the basis of only one study. In light of the consistent ndings for tightness
and innovation (see the previous section), one explanation is that most entrepreneurship may not
deviate strongly from existing norms and thus may benet from medium levels of tightness.
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Studies of GLOBE cultural practices and entrepreneurship typically considered diverse coun-
tries. Across studies, the rst and clearest pattern of ndings was that, in line with the cultural
support perspective, socially supportive cultural practices facilitate entrepreneurship in its differ-
ent forms. There was also some evidence supporting the proposed mechanisms through which
socially supportive culture facilitates entrepreneurship (e.g., enhanced experimentation). Second,
some evidence was also consistent with the culture t perspective: Performance-based culture was
related to the quality of formal institutions and to formal entrepreneurship. This may explain
why performance-based culture showed no relationship with GEM entrepreneurship measures
that include both formal and informal entrepreneurship. Third, evidence from cross-level studies
helps us better understand this culture t. Findings indicated that, to succeed in individualistic,
performance-based cultures, starting entrepreneurs need a strong sense of personal agency and
condence (entrepreneurial self-efcacy). Fourth, more women were self-employed in cultures
practicing gender egalitarianism and medium levels of in-group collectivism.
GLOBE cultural practices were used in two ways, both designed to avoid multicollinearity
arising from the correlations among the nine cultural practice dimensions. Researchers either se-
lected a small number of practice/norms dimensions guided by theory or used two higher-order
dimensions of cultural practices. The two higher-order dimensions were derived from a second-
order factor analysis of GLOBE cultural practices by Stephan & Uhlaner (2010), building on re-
search by Peterson & Castro (2006). The rst factor, performance-based culture, relates to cultural
norms that reward individual accomplishments (versus relationships or position) and view future-
oriented planning as a way to achieve high performance (Stephan & Uhlaner 2010). Performance-
based culture combines high future and performance orientation with high rule-oriented uncer-
tainty avoidance, low power distance, and low in-group collectivism practices. The second factor,
socially supportive culture, describes “a positive societal climate in which people support each
other” (Stephan & Uhlaner 2010, p. 1351) and combines high humane orientation5with low as-
sertiveness. Performance-based culture correlates positively with Hofstede individualism and neg-
atively with Hofstede power distance and stress/uncertainty avoidance. Socially supportive culture
does not correlate substantially with the Hofstede dimensions (Supplemental Appendix 1).
Consistent with the cultural social support perspective, highly socially supportive cultures can
help entrepreneurs mobilize informal support and resources. They also help make entrepreneurs
feel safe to experiment and thereby empower them to take the risk of setting up a business.
Country-level and multilevel studies found that socially supportive cultures facilitate (differ-
ent types of ) entrepreneurship as measured by GEM, including new entrepreneurship, estab-
lished business ownership, innovation-oriented entrepreneurship, independent-opportunity en-
trepreneurship, and social entrepreneurship [e.g., across 42 diverse countries (Autio et al. 2013),
40 diverse countries (Stephan & Uhlaner 2010), 26 diverse countries (Stephan et al. 2015), and 52
diverse countries (Thai & Turkina 2014)].
In these studies, performance-based culture was not consistently related to these forms of en-
trepreneurship, but it was related to formal entrepreneurship (i.e., the per capita rate of newly
5Schlösser et al. (2012) suggested that humane orientation can create a positive societal climate at the cost
of requiring compliance with social norms. They differentiated in-group and out-group humane orientation,
and found that only the latter creates inclusive and supportive societal climates. GLOBE humane orientation
did not distinguish between in- and out-groups. In Schlösser et al.’s (2012) study, GLOBE humane orienta-
tion country scores correlated more highly with out-group humane orientation measure than with in-group
humane orientation. Moreover, GLOBE humane orientation practices and socially supportive culture do not
correlate signicantly with culture indices that capture compliance with social norms (i.e., Hofstede indul-
gence and cultural tightness; Supplemental Appendix 1).
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registered rms as reported by the World Bank; Thai & Turkina 2014), which requires future-
oriented planning. It also ts with evidence that performance-based culture shapes the quality of
formal institutions supporting entrepreneurship (Stephan & Uhlaner 2010).
One mechanism through which cultural social support is presumed to inuence entrepreneur-
ship is by encouraging experimentation (Stephan & Uhlaner 2010). Laskovaia et al. (2017) tested
this argument in a study across 24 diverse countries. In mediation analyses, they found that so-
cially supportive cultures positively inuenced new venture performance through stimulating en-
trepreneurs to use effectual decision-making characterized by experimentation and exibility. By
contrast, performance-based cultures were negatively related to venture performance mediated by
enhanced causal decision-making, which involves future-oriented planning. Stephan & Uhlaner
(2010) tested additional mechanisms and found that socially supportive cultures help increase the
legitimacy of entrepreneurship, suggesting that such cultures are more inclusive of nonmainstream
career choices.
Turning to studies examining specic cultural practices, Autio et al. (2013) found that per-
formance orientation was positively related, and rule-oriented uncertainty avoidance and institu-
tional collectivism were negatively related, to new entrepreneurship. They controlled for several
variables, including in-group collectivism and assertiveness practices. Only institutional collec-
tivism was related positively to new entrepreneurs’ expectations to create new jobs (high-growth
entrepreneurship), which the authors suggest is due to the greater willingness for collective risk
sharing in these cultures, in which stakeholders recognize the societal value of new job creation
and therefore are more willing to support high-growth entrepreneurs. However, high-growth en-
trepreneurship has low stability over time (Stephan 2020), suggesting that formal institutions,
rather than stable differences in culture, may drive cross-country variation in high-growth en-
trepreneurship. Future research could test these competing explanations of formal versus informal
institutions, especially as institutional collectivism also includes an assessment of perceived formal
institutions.
In an extension of research by Autio et al. (2013), Wennberg et al. (2013) found that institu-
tional individualism (versus collectivism), rule-oriented uncertainty avoidance (versus tolerance),
and high performance orientation strengthened the positive relationship of entrepreneurial self-
efcacy with being a start-up entrepreneur.The effects were less pronounced or not signicant for
fear of failure. This reects notions of culture t: To succeed in individualistic performance-based
cultures, starting entrepreneurs need to have a strong sense of personal agency and condence.
Recall that De Clercq et al. (2013) reported similar effects for individualistic and egalitarian cul-
tures (assessed through Schwartz values), whereas Hopp & Stephan (2012) found similar results
for self-efcacy- and performance-based community cultures.
Across countries, gender stereotypes of entrepreneurship are masculine (Gupta et al. 2009).
Bullough et al. (2017) found that gender egalitarian cultures facilitated women’s self-employment
across 44 diverse countries. Additionally, medium levels of in-group collectivism practices en-
abled women’s entrepreneurship by allowing them to draw on support from their families without
requiring that they prioritize family ties over their own goals. This relationship was visible in
countries with either very high or very low institutional collectivism. At medium levels of institu-
tional collectivism, a country may have institutions that balance potential drawbacks of high and
low in-group collectivism.
Performing: Firm-Level Cross-Cultural Innovation/Entrepreneurship Research
Variance-inducing rm strategies such as innovation and EO (a strategy combining innovation
with risk-taking and proactivity; Lumpkin & Dess 1996) enhance rms’ competitiveness and
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performance (Mueller et al. 2013, Rauch et al. 2009). Firms pursuing variance-inducing strate-
gies innovate to develop new offerings, become more efcient by innovating processes, and are
more proactive and take more risks in exploring new markets and opportunities. They often cap-
italize on rst-mover advantages, as they are quick to introduce new offerings to markets, yet
this comes with a risk of also being quick to fail, which would give rise to increased variance in
rm performance. How effective variance-inducing strategies are in boosting rm success can de-
pend on the national culture in which rms operate. This is the focus of cross-cultural research on
performing, which investigates national culture as a boundary condition of the rm-level relation-
ship between a rm’s use of variance-inducing strategies and its performance. The cross-cultural
studies on performing discussed in this section investigated mainly individualism and uncertainty
avoidance. Other cultural dimensions (e.g., power distance) were less frequently studied, and evi-
dence was less consistent. Next, I summarize the ndings of this research (see also Figure 1cfor
a summary) and the dominant methodology before elaborating on key studies.
Across studies, collectivism (versus individualism) strengthened the relationship of variance-
inducing strategies with rm performance. This enabling effect of collectivism was found to be
independent of how collectivism was assessed (by either Hofstede or GLOBE practices of in-
group or institutional collectivism). Collectivist cultures appear to enable rms to generate higher
returns from variance-inducing strategies by enhancing collaboration within the rm and with ex-
ternal stakeholders. This enhanced coordination and feeling of mutual obligation among the rm’s
stakeholders arguably help create efcient processes, mobilize resources, and support stakeholder
adoption of the rm’s innovative offerings (cf. Nakata & Sivakumar 1996). The enabling effect of
collectivism appears to align with a culture mist explanation and contrasts with the innovation-
facilitating effects of individualism in the originating phase. Yet the enabling effect of collectivism
is consistent with the different demands and tasks in the performing versus originating phase:
turning ideas into reliably delivered offerings for high rm performance versus creating novelty.
Studies also supported culture t arguments for uncertainty avoidance, suggesting that it was
easier for rms to derive performance benets from variance-inducing strategies in uncertainty-
tolerant cultures. Uncertainty-tolerant cultures allow rms more exibility, and it would be more
legitimate for rms to introduce novelty in uncertainty-tolerant (versus -avoidant) cultures. For
instance, customers would be more willing to try new products/services and stakeholders would be
more supportive of innovative and entrepreneurial rms that frequently introduce new offerings
in new markets, experiment, and take risks. Moreover, implementing and commercializing innova-
tions may require generating new ideas to overcome obstacles and setbacks as well as exibility in
adapting one’s approach (Bledow et al. 2009), which is easier in uncertainty-tolerant cultures. The
ndings were consistent whether uncertainty avoidance was assessed as Hofstede stress tolerance
(versus avoidance) or GLOBE rule exibility (versus rule orientation).
In terms of methodology, it is difcult and expensive to conduct primary studies of rms and
rm performance across diverse cultures. Thus, evidence in this section stems primarily from
meta-analyses that integrated primary studies conducted in different countries and were therefore
able to test moderation effects of culture. To do so, each primary study included in a meta-analysis
was assigned a culture score on the basis of its country of data collection. Moderation effects
of culture were assessed via meta-regressions or median splits (e.g., comparing low- and high-
individualism cultures). Studies discussed in this section often considered only one cultural index
and a limited number of countries, and typically did not control for alternative explanations (e.g.,
national wealth).
Turning to the specic ndings, Rosenbusch et al. (2011) found that the performance of small
rms benetted more from innovation in Hofstede collectivist (versus individualist) cultures.
Their meta-analysis synthesized 36 effect sizes across 15 mostly developed countries. Mueller et al.
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(2013) extended these ndings to all types of rms, not just small rms, and used GLOBE prac-
tices. They found that radical (explorative) and incremental (exploitative) innovations mattered
more for rm performance in rule-exible, uncertainty-tolerant (versus rule-oriented) cultures.
Additionally, institutional collectivism and high power distance strengthened the relationship of
radical but not incremental innovation with rm performance. Thus, the performance benets of
incremental innovations were less contingent on culture than were those of radical innovations.
The latter are riskier projects that likely benet from enhanced collective risk sharing and co-
operation in institutionally collectivist countries as well as from top-down resource allocation to
high-risk projects in power-distant cultures. Mueller et al. (2013) analyzed 46 and 42 effect sizes
and controlled for alternative explanations but included little information about the countries
included.
A primary study of 857 business owners/managers across ve countries also used GLOBE
practices and found similar effects for collectivism but not for uncertainty avoidance (Rauch et al.
2013). Innovation was more closely related to the growth of small rms in (in-group) collectivist
and nonassertive cultures. Higher cultural rule-oriented uncertainty avoidance also strengthened
the innovation–rm growth relationship. Power distance had no effect. This study’s ndings for
rule-oriented uncertainty avoidance were the opposite of those obtained in Mueller et al.’s (2013)
meta-analysis, likely due to the smaller sample (of cultures and rms) and, therefore, the inability
of Rauch et al. (2013) to control for alternative country-level explanations.
Further research considered EO, a rm’s strategic orientation to innovate, be proactive, and
take risks (Lumpkin & Dess 1996). In small rms, the EO of the rm is often a reection of the en-
trepreneur’s personal approach (Rauch et al. 2009). The rst meta-analysis on EO and rm perfor-
mance identied heterogeneity of effect sizes across countries and thus suggested (but did not test)
moderating effects of culture (Rauch et al. 2009). Saeed et al. (2014) expanded the meta-analysis
by Rauch et al. (2009), synthesizing 177 effect sizes across 41 diverse countries and analyzing the
moderating effects of GLOBE practices. They found that the EO–rm performance relationship
was stronger in cultures that were more in-group collectivist, more rule exible (uncertainty tol-
erant), and more egalitarian (low power distance). There was no effect for assertiveness. Across
different analyses, the effect of uncertainty tolerance was strongest, mirroring the ndings by
Mueller et al. (2013) for innovation, discussed above.
So far, I have focused on research that established national culture as strengthening the degree
to which variance-inducing rm strategies translate into higher rm performance. In the remain-
der of this section, I touch on two lines of research that illustrate additional ways in which national
culture can shape rm innovation processes and entrepreneurship.
First, culture can shape the effectiveness of drivers of innovation. In an extension of the results
on collectivism described above, Saeed et al. (2015) found that Hofstede collectivism enables rms
to better mobilize ideas internally and externally for innovation, suggesting that the coordination-
enhancing effects of collectivism help rms source and translate ideas into new offerings. Specif-
ically, both rms’ internal capabilities and rms’ orientation toward external stakeholders and
customers were more consequential for rm innovation in collectivist (versus individualistic) cul-
tures. A meta-analysis by Eisend et al. (2016) focused on organizational culture as one important
rm internal capability for innovation. It found evidence for specic culture t: Firms saw higher
innovation success when their organizational culture aligned with the national culture (assessed
with Hofstede indices). For instance, cohesive organizational cultures (so-called clan cultures) led
to greater innovation success in collectivist national cultures and exible “adhocracy” organiza-
tional cultures in uncertainty/stress-tolerant national cultures.
Second, culture can strengthen the impact of efciency-oriented strategies on the performance
of small and entrepreneurial rms but not on resources. In their meta-analysis, Brinckmann et al.
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(2010) found that business planning, an efciency-oriented strategy, had a stronger positive im-
pact on small-rm performance in uncertainty/stress-tolerant (versus -avoidant) cultures (assessed
with the Hofstede index). This is similar to the enabling effect of uncertainty-tolerant cultures for
variance-inducing strategies. In uncertainty-tolerant cultures, planning is likely more adaptive as
opposed to rigid, enhancing its benets for small-rm performance. In another meta-analysis,
Rosenbusch et al. (2013) found no moderating effect for Hofstede uncertainty/stress avoidance
on the relationship between venture capital investment and rm performance. Their nding is
similar to that by De Clercq et al. (2013), reported above, wherein culture did not moderate the
relationship of individual nancial resources and engagement in entrepreneurship. This is con-
sistent with the notion that nancial resources are a signicant constraint for entrepreneurs and
entrepreneurial businesses and thus a “strong” situation (Mischel 1977), leaving little scope for
culture to shape behavior.
From Cross-Cultural to Multicultural Experience and Cultural Diversity
While my overview has centered on cross-cultural comparative research, the multicultural expe-
rience of individuals—their exposure to other cultures—and cultural diversity in teams can also
stimulate innovation and entrepreneurship. Much research has elaborated on how, when, and what
type of multicultural experience aids innovation (e.g., requiring a certain length and depth of
exposure to another culture that is substantially different from one’s own and being willing to
process and learn from that experience; Gocłowska et al. 2018, Leung et al. 2008). Moreover, a
meta-analysis found that team innovation benetted from deep-level cultural diversity in values,
perspectives, and cognition; from culturally diverse teams being co-located; and from working on
interdependent, complex, and intellectual tasks (Wang et al. 2019). By contrast, there were fewer
or even detrimental effects for teams that were diverse on the surface level (i.e., in country and
ethnicity/cultural backgrounds) but that were not co-located, worked independently, and worked
on simple or judgmental tasks (Wang et al. 2019). In summary, diversity benetted innovation
when it led to an exchange of divergent perspectives and integrative joint problem-solving.
By contrast, there was little research on how multicultural experience may benet en-
trepreneurship. Promising evidence indicated that multicultural experience can aid opportunity
recognition in the start-up process (Vandor & Franke 2016) and help ventures internationalize
(Reuber & Fischer 1997). Understanding the role of multicultural experience can offer insights
into the potential strengths of refugee and immigrant entrepreneurs, with important implications
for societal cohesion in light of increasing global migration (United Nations 2021).
SUMMARY AND FUTURE RESEARCH DIRECTIONS
Cross-cultural research on innovation and entrepreneurship has established that culture matters
for innovation and entrepreneurship. Yet there is no one simple explanation, such as a single
theoretical perspective (e.g., culture t) or dimension of culture (e.g., individualism). Instead, as
Figure 1 illustrates, the effects of culture vary meaningfully with the distinct demands of the
phases of the innovation/entrepreneurship process, with the specic dimensions of culture (e.g.,
individualism, uncertainty avoidance, socially supportive culture, tightness), and with the approach
to culture (values versus practices/norms) investigated.
Considering the distinct demands of each phase reveals patterns of ndings and unexpected
relationships (Figure 1). For instance, considering the distinct demands of the originating and
performing phases helps us understand that originating ideas is facilitated by individualism, which
supports divergent thinking, while obtaining performance benets from innovation is aided by
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collectivism, which enables coordination within the rm and with its stakeholders. By contrast, the
exibility and experimentation facilitated by uncertainty tolerance are equally relevant to origi-
nating ideas (originating phase) and to successfully implementing and commercializing ideas (per-
forming phase). The ndings on the importance of cultural social support in the implementing
phase were unexpected from the dominant culture t perspective and the common perception of
entrepreneurs as heroic individualists succeeding against all odds. Yet, cultural social support ts
with the demands of the implementing phase, because implementing a venture idea through the
creation of a business requires mobilizing tangible and intangible support and resources, which is
easier in socially supportive cultures.
These patterns suggest that the notion of culture (mis)t needs to be revised and nu-
anced. There is a need to elaborate the specic element or characteristic of innovation/
entrepreneurship that culture is supposed to t or align with. For instance, the way culture t
is invoked in research often centers on t with the characteristics of innovation/entrepreneurship
that largely map onto the originating phase; in other words, arguments focus on how the individ-
ual innovator/entrepreneur can identify new ideas and opportunities (e.g., Hayton et al. 2002).
Viewed in this way, the positive effects of cultural social support and collectivism on innova-
tion/entrepreneurship in the implementing and performing phases could be interpreted as evi-
dence of cultural mist. However, cultural social support and collectivism support the demands
of coordinating and orchestrating resources and stakeholders that innovating organizations and
entrepreneurs face in the implementing and performing phases. In this way, the dominant inter-
pretation of culture (mis)t, focused on originating ideas, may reect a certain individualistic bias
of researchers. By contrast, the implementing and performing phases draw attention to the social
nature of innovation and entrepreneurship and highlight the role of others in the workplace, rm,
or entrepreneurs’ environment. Such a bias could also explain the absence of studies considering
cultural social support explanations in the originating phase.
To advance, cross-cultural innovation/entrepreneurship research needs to move on from doc-
umenting that culture matters to developing a deeper understanding of the precise mechanisms
at play,because if mechanisms are not understood or tested, theories will remain underdeveloped.
Typically, studies referred to culture (mis)t arguments and occasionally to cultural support argu-
ments and then elaborated (but did not test) more specic mechanisms such as the legitimacy of
innovations/entrepreneurship, individual traits, social networks, opportunity recognition, skill,
or all of these and others. There were some exceptions, such as studies that offered insights into
mechanisms. Future research can build on these. For instance, there was evidence that culture
shapes the social legitimacy of innovative ideas (e.g., Chua et al. 2015) and entrepreneurship
(Stephan & Uhlaner 2010) and that cultural values legitimize certain types of leadership that facil-
itate entrepreneurship (Stephan & Pathak 2016). There was also some evidence for the aggregate
trait mechanism (Chua et al. 2019) and that cultural practices shape entrepreneurs’ decision-
making styles for planning versus experimentation (Laskovaia et al. 2017). Similarly, there were ex-
amples in research investigating culture as a boundary condition that can help unpack and test spe-
cic notions of culture t. Examples were studies that examined how culture interacted with char-
acteristics of the individual innovator/entrepreneur (e.g., personal values or self-efcacy; Morales
et al. 2019, Wennberg et al. 2013) as well as with work context and organizational features (e.g.,
leadership style, organizational culture; Eisend et al. 2016, Watts et al. 2020) to enable innovation.
A primary challenge in cross-cultural innovation/entrepreneurship research is how to mea-
sure the underlying mechanisms. Cross-cultural research is costly, and collecting survey data in a
comparable manner across countries is resource intensive. This means that tests of mechanisms
are only feasible on the basis of cross-sectional data, either original or secondary. Experiments
(Liou & Lan 2018, Nouri et al. 2015) and simulation studies (Keyhani & Lévesque 2016) can
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complement cross-cultural surveys and test competing explanations and mechanisms against one
another.For instance, both uncertainty tolerance and socially supportive culture have been argued
to facilitate innovation and entrepreneurship by enabling experimentation. Is one aspect of culture
more effective in doing so? How strong is this effect compared with other suggested mechanisms,
such as legitimizing innovation/entrepreneurship?
This review has exposed further gaps in cross-cultural innovation/entrepreneurship research
that present important opportunities for future contributions. I have already discussed the need to
rene our understanding of culture t and theoretical mechanisms in cross-cultural innovation/
entrepreneurship research. Additional opportunities include contextualizing culture, investigat-
ing culture change originating from innovation/entrepreneurship, considering different types of
innovation/entrepreneurship, moving beyond considering solely linear effects of culture, and in-
vestigating outcomes overlooked in existing research.
There is a need for future research to contextualize culture.Culture does not exist in isolation
and may interact with prevailing formal institutions (e.g., the rule of law or regulation; Estrin et al.
2013, Williamson 2000) or with other informal institutions (e.g., diversity and cultural schemas;
Leung & Morris 2014, Nisbett 2004) to inuence innovation/entrepreneurship. Combining the-
ories of culture with insights into formal institutions from economics and insights into informal
institutions from cognitive approaches, political science, and sociology thus opens up opportuni-
ties for new theoretical contributions and practical implications. Doing so could allow national
policy makers to understand whether the effectiveness of regulations may be contingent on the
national culture. For instance, research on social entrepreneurship has found that the effectiveness
of generous welfare states is enhanced by socially supportive cultures, rather than being crowded
out by them (Stephan et al. 2015).
Another gap lies in considering innovation/entrepreneurship as a source of culture and culture
change. Entrepreneurial and technological innovations such as social media change the way we
interact and may lead to culture change by shifting cultural practices and norms (Kwan 2018).
Innovation/entrepreneurship can also instigate bottom-up empowerment-driven transformation
processes to make cultures more inclusive and tolerant (Stephan et al. 2016). A balanced per-
spective would also complement the dominant view of innovation/entrepreneurship as a source
of competitiveness and progress by considering potential negative aspects such as unethical cul-
ture shifts that result from innovation/entrepreneurship (Scheaf & Wood 2021, Shepherd 2019).
We have only begun to understand the processes involved in culture change (e.g., in response to
threat; Gelfand et al. 2011), and innovation/entrepreneurship may be one important source of
such change, perhaps especially in times of threat such as the COVID-19 pandemic.
Future research could pay more attention to different types of innovation and entrepreneurship
and how they are inuenced by culture. For instance, contrasting formal indicators and individual-
level behavioral indicators could help establish effects of formal institutions vis-à-vis culture more
clearly. Such research could contrast patent rates or formally registered businesses with indica-
tors of individual innovation in the workplace or individuals’ start-up attempts. Additionally, the
differentiation of necessity-driven, independence-driven, and social entrepreneurship may be use-
fully explored in cross-cultural innovation research to consider necessity-driven, frugal, or social
innovation, which may be a better way to characterize innovation in developing countries (Prabhu
& Jain 2015).
Effects of culture have been almost exclusively theorized and tested as linear effects. Future re-
search would benet from moving beyond linear effects of culture to develop a richer understand-
ing of culture. There is value in considering “optimum levels” and U-shaped effects,as illustrated
by Bullough et al. (2017) for in-group collectivism and women’s entrepreneurship. Moreover, fu-
ture research could consider notions of culture strength; intracultural diversity, including regional
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or community cultures; or whether high social and ethnic diversity may weaken effects of national
culture on innovation/entrepreneurship (Beugelsdijk et al. 2017). Furthermore, research explor-
ing when and how to innovate or be entrepreneurial in cultural environments that are stacked
against innovation/entrepreneurship seems particularly promising in terms of both theory devel-
opment and practical relevance. Such research could focus on culturally adverse environments to
understand how innovation/entrepreneurship can be successful in these contexts. In addition to
quantitative studies, qualitative studies may be especially useful in exploring such contexts and
innovation/entrepreneurial trajectories over time.
In terms of overlooked outcomes, no studies have investigated how culture relates to persisting
and exiting, an important phase of the innovation/entrepreneurship process. For instance, what
cultures allow entrepreneurs to learn and exit quickly from unsuccessful efforts, and overcome
the potential stigma of failure (Cardon et al. 2011)? What cultures lead organizations to persist
in commercializing technological innovations when abandoning them would be more effective,
because more-frugal, low-technology products are taking market share (Christensen et al. 2018)?
Moreover, research in the performing phase has centered on economic outcomes, yet rm per-
formance can be multifaceted. In particular, outcomes important to societal functioning such as
social impact, social inclusion, and mental well-being should also be considered.
Best Practices for Robust Future Research
This section summarizes best practices to enhance the rigor of cross-cultural innovation and en-
trepreneurship research. More rigorous research helps prevent misleading conclusions about the
role of culture, and thus the impressions of inconsistent ndings that the last review noted (Hayton
& Cacciotti 2013). This review has illustrated that conclusions about the role of culture can dif-
fer if cultural values or practices/norms are investigated and if different cultural dimensions are
tested across studies. The challenge is to consider multiple cultural dimensions and potentially
their interactions while avoiding multicollinearity.Theory should guide the choice of cultural ap-
proach (values versus practices/norms) and cultural dimensions, and the dimensions chosen should
offer nonredundant information. For instance, the Hofstede individualism and power distance di-
mensions overlap signicantly (Bond 2002). At the same time, the two higher-order dimensions of
GLOBE practices, performance-based and socially supportive culture (Stephan & Uhlaner 2010),
are designed to sidestep multicollinearity for research on cultural practices/norms. To enhance the
robustness of cross-cultural research, robustness tests could be included to provide evidence that
ndings replicate across cultural frameworks. For instance, some of the Hofstede dimensions mix
values and practices; thus, robustness checks with Schwartz cultural values and GLOBE practices
can help us understand whether values or practices/norms are driving the results. Robustness
checks with the meta-analytically derived updated Hofstede indicators (Taras et al. 2012) can al-
leviate concerns about Hofstede measures not reecting current culture.
Conclusions about the role of culture can also vary depending on how innovation/
entrepreneurship is assessed. Researchers need to be mindful which phase of the innovation/
entrepreneurship process and what type of innovation/entrepreneurship (e.g., patent rates, rates of
patent citation, online creativity, nascent versus new entrepreneurs, social entrepreneurs) a mea-
sure assesses. Robustness checks for different measures can allow researchers to assess how distinct
and generalizable their ndings are.
This review has also illustrated that conclusions about culture differ depending on the sample
of cultures under investigation. Authors should reect on the range and diversity of countries
included in their study or meta-analysis. For instance, entrepreneurship studies differ in their
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conclusions about the role of individualism if their sample is homogeneous (developed countries)
versus diverse (developed and developing countries). As discussed in the section titled Further
Methodological Issues, culture effects are likely to be underestimated in homogeneous samples of
countries because such samples restrict the range of cultural variation. Thus, researchers should
consider how representative the countries in their sample are (for the world or for a continent). A
smaller sample covering diverse countries might allow researchers to draw more valid conclusions
about culture than a larger sample of homogeneous countries. Of course, researchers might also
have theoretical reasons to study culture effects within a homogeneous set of countries. These
should be explicitly stated.
Analyses should apply appropriate controls for alternative explanations. As discussed above,
the most salient alternative explanation is the level of economic development (GDP), which co-
varies with several dimensions of culture and implies different levels of resources. Depending on
the research question, formal institutions such as the rule of law and regulations may be alter-
native explanations for the effects of culture, or they may interact with or be shaped by culture
(Williamson 2000).
When multilevel data are available (e.g., innovations within countries, individuals within coun-
tries), they should be analyzed with multilevel methods to avoid biases and erroneous conclu-
sions (Peterson et al. 2012). Multilevel modeling also offers opportunities for new and interesting
research questions, such as multilevel moderation (Wennberg et al. 2013) and mediation tests
(Stephan & Pathak 2016) or tests of mist arguments via frog-pond models (Kozlowski & Klein
2000).
When moderation analyses are conducted, they should be theoretically motivated rather than
aiming to test for all possible moderation effects, which can lead to spurious ndings. Previous
meta-analyses were often constrained by a small number of primary studies and tested moderating
effects of culture with bivariate sample split analyses (e.g., comparing effect sizes for high- versus
low-individualism countries). Once more primary studies are available, meta-analytical regression
analyses (MARAs) with control variables should be performed to rule out alternative explanations
(Combs et al. 2019).
Practical Implications
Approaching culture from a values versus practices/norms perspective yields different practical
implications. Values are stable. Short-term value changes (e.g., in response to crises or shocks)
are temporary; rather, values change over generations, in line with institutional changes and
resource levels (Manfredo et al. 2017). Thus, seeking to enhance innovation/entrepreneurship
through the instigation of widespread value change seems futile. By contrast, cultural
practices/norms can be relatively easier to change, as I discuss further below.
Instead of aiming at value change, researchers must understand a country’s existing cultural
values to be able to devise strategies for innovation/entrepreneurship that leverage or adapt to this
cultural context. An example is the research on different cultural understandings of innovation,
which revealed an emphasis on usefulness (versus novelty) in Asian and collective (versus Western
and individualistic) cultures. Usefulness is critical for innovations to be implemented and adopted
and, thus, to yield business and societal benets. Similarly, individualism facilitates originating
ideas, whereas collectivism aids performing (i.e., commercializing innovations for rm success).
Organizations and entrepreneurs could leverage this knowledge through internationalizing (i.e.,
setting up collaborations or joint ventures across cultures). Teams or rms focused on creating
novel solutions would be based in individualistic cultures, and teams or rms based in collectivistic
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cultures would focus on developing useful solutions and on implementing and commercializing
innovations.
Moreover, I have discussed research showing that altering work and task settings (e.g., team
versus individual work, task focus on idea generation versus evaluation) can temporarily prime
and override effects of culture, and that transformational leadership can compensate for the
detrimental effect of uncertainty avoidance on individual and team innovation. These ndings
imply that organizations and entrepreneurs could temporally alter their work design or lead-
ership style to compensate for detrimental culture effects in a particular phase of the innova-
tion process (e.g., enhancing collectivism if the focus is on commercializing innovations and the
organization/entrepreneur is based in an individualistic culture).
Crowdsourcing offers another mechanism to harness the strengths of different cultures (Chua
et al. 2015). Organizations and entrepreneurs could make targeted efforts to solicit ideas from
individualistic cultures to obtain novel ideas and from collectivistic cultures to obtain useful ideas.
Yet organizations, entrepreneurs, and crowdsourcing platforms should not only consider culture
in terms of the supply of ideas but should also be mindful that evaluators of ideas within their
organization may apply similarly culturally informed templates in selecting ideas. Training could
raise awareness of such templates to maximize the benecial effects of culture.
Policy makers seeking to instill a “culture of innovation and entrepreneurship” (EESC 2013)
may build on insights from research on cultural practices/norms. These practices are rooted in col-
lective patterns of behaving and acting, which are relatively easier to change than values (Manfredo
et al. 2017). Change efforts may target educational settings (e.g., schools, universities), for ex-
ample, to develop generalized norms of kindness and cooperation in line with the cultural social
support perspective. Alternatively, they could take the form of training or utilize media campaigns
to alter perceptions of what is legitimate and common behavior.For instance, campaigns could use
the ndings in this review to reframe entrepreneurship, which is often regarded as a solitary, well-
planned, “heroic” pursuit, by demonstrating that it typically involves experimentation and relies on
the support of others. This may also help attract more talent into entrepreneurship, especially in
more individualistic and performance-oriented cultures, rather than reinforcing the self-selection
effects documented in these cultures, where mainly people with high self-efcacy dare to start
a business. Corporate communication campaigns may communicate the benecial effects of
uncertainty tolerance identied in research on the originating and performing phases to enhance
innovation. Campaigns in uncertainty-avoidant cultures could reframe the stresses associated with
innovating in these cultures as indicating challenge and as a normal part of the innovation process.
This reframing could be supplemented by training to help innovators and entrepreneurs manage
stress.
CONCLUSION
Cross-cultural research has established that culture matters for innovation and entrepreneurship.
Yet, there is no single conclusion; for instance, it is not all about cultural individualism and culture
t. Instead, there are meaningful patterns of ndings (Figure 1) that reect the distinct demands
of the phases of the innovation/entrepreneurship process. This means that different dimensions
of culture (e.g., individualism, uncertainty avoidance, social supportiveness, tightness) can have
varying effects for different phases. Moreover, differences between cultural frameworks and cul-
tural approaches (values versus practices/norms) help explain seemingly conicting ndings in
past research. I hope this review provides a platform for future studies to advance cross-cultural
innovation/entrepreneurship research through more nuanced theorizing, a greater focus on artic-
ulating and measuring theoretical mechanisms, and robust methodology.
Stephan
Annu. Rev. Organ. Psychol. Organ. Behav. 2022.9:277-308. Downloaded from www.annualreviews.org
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DISCLOSURE STATEMENT
The author is not aware of any afliations, memberships, funding,or nancial holdings that might
be perceived as affecting the objectivity of this review.
ACKNOWLEDGMENTS
I thank Michael Frese and Frederick Morgeson for their helpful comments on a prior draft of this
article. All errors are my own.
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Contents
From Traditional Research to Responsible Research: The Necessity of
Scientic Freedom and Scientic Responsibility for Better Societies
Anne S. Tsui pppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp1
Recovery from Work: Advancing the Field Toward the Future
Sabine Sonnentag, Bonnie Hayden Cheng, and Stacey L. Parker ppppppppppppppppppppppppppp33
The Science of Leadership: A Theoretical Model and Research Agenda
Andrew M. Carton pppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp61
Stigmatized Work and Stigmatized Workers
Glen Kreiner, Christine A. Mihelcic, and Sven Mikolon pppppppppppppppppppppppppppppppppppp95
The Power of Listening at Work
Avraham N. Kluger and Guy Itzchakov ppppppppppppppppppppppppppppppppppppppppppppppppppp121
Compensation, Benets, and Total Rewards: A Bird’s-Eye (Re)View
Ingrid Smithey Fulmer and Junting Li pppppppppppppppppppppppppppppppppppppppppppppppppppp147
Smart Heuristics for Individuals, Teams, and Organizations
Gerd Gigerenzer, Jochen Reb, and Shenghua Luan ppppppppppppppppppppppppppppppppppppppp171
When Gender Matters in Organizational Negotiations
Hannah Riley Bowles, Bobbi Thomason, and Inmaculada Macias-Alonso pppppppppppppppp199
New Developments in Social Network Analysis
Daniel J. Brass ppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp225
Trust Within the Workplace: A Review of Two Waves of Research and
a Glimpse of the Third
Kurt T. Dirks and Bart de Jong pppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp247
Cross-Cultural Innovation and Entrepreneurship
Ute Stephan pppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp277
Relational Dynamics of Leadership: Problems and Prospects
Terri A. Scandura and Jeremy D. Meuser ppppppppppppppppppppppppppppppppppppppppppppppppp309
Annu. Rev. Organ. Psychol. Organ. Behav. 2022.9:277-308. Downloaded from www.annualreviews.org
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The Structure of Intrinsic Motivation
Ayelet Fishbach and Kaitlin Woolley pppppppppppppppppppppppppppppppppppppppppppppppppppppppp339
Revisiting Behavioral Integrity: Progress and New Directions
After 20 Years
Tony Simons, Hannes Leroy, and Lisa Nishii pppppppppppppppppppppppppppppppppppppppppppppp365
Informal (Field-Based) Learning
Scott I. Tannenbaum and Mikhail A. Wolfson ppppppppppppppppppppppppppppppppppppppppppppp391
Assessing Interests in the Twenty-First-Century Workforce: Building
on a Century of Interest Measurement
Christopher D. Nye pppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp415
Accumulating Knowledge in the Organizational Sciences
Frank A. Bosco ppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp441
Errata
An online log of corrections to Annual Review of Organizational Psychology and
Organizational Behavior articles may be found at http://www.annualreviews.org/
errata/orgpsych
Annu. Rev. Organ. Psychol. Organ. Behav. 2022.9:277-308. Downloaded from www.annualreviews.org
Access provided by King's College - London on 01/27/22. For personal use only.
