Personality traits and firm innovation performance : the mediation effect of entrepreneurial innovativeness

Purpose: The purpose of this paper is to examine the effect of entrepreneurs’ personality traits on firm innovation performance through the mediation role of entrepreneurs’ innovativeness. Design/methodology/approach: The data consist of 2,574 firms from a survey of small and medium-scale manufacturing enterprises (SMEs) in Vietnam, a developing and transitioning economy where SMEs constitute an integral part of the economy. The estimation results based on the structural equation model was applied to analyze the data. Findings: The results indicate that an entrepreneur’s innovativeness is positively associated with his extraversion, conscientiousness, and openness to experience but negatively accompanied with his neuroticism. Besides, the three traits – openness to experience, conscientiousness and extraversion have positive indirect effects, while neuroticism has a negative indirect effect on technological improvement and new technology adoption. However, the effects of agreeableness on entrepreneurial innovativeness and firm innovation performance are insignificant. In addition, the diverse backgrounds of the entrepreneur such as education and ethnics are also found to influence his innovativeness and to have indirect effects on firm innovation performance. Originality/value: This study may contribute to the immature literature on the entrepreneurial process within SMEs by presenting empirical evidence on the relationship between entrepreneurial personality traits and firm innovation with a large sample of SMEs in Vietnam, an emerging economy where SMEs constitute an integral part of the economy.