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

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