Relationship between innovation and sustainability in Latin American countries: Differences by perceptual characteristics of early-stage entrepreneurs

Figures & data

Figure 1. Conceptual framework

Table 1. Affirmations and questions incorporated in the analysis

Code	Affirmation/Question	Theoretical basis	Scale
INPROD	My organization offers products or services that are new to the market.	Product innovation can be a change in a product line or the launch of a new product.	Ordinal: Likert with five levels. From strongly agreed=5 to strongly disagreed=1. 1 = Strongly Disagree. 2 = Somewhat Disagree. 3 = Neither Agree nor Disagree. 4 = Somewhat Agree. 5 = Strongly Agree.
INPROC	My organization offers a new way to produce a product or service.	Process innovation is a new mode of production and distribution of a good or service, incorporating aspects such as modification of materials, equipment, tasks, and administration of work and information.
IMPSUST	Social and environmental values are more important than financial value.	The statements refer to businesses that consider social and environmental care as part of the interests of their managers and investors, and that take particular actions such as measuring environmental impact and reinvesting profits. They are consistent with the principles of sustainability.
VSOCIAL	The company places greater emphasis on social value than on environmental value.
RPROFIT	Profits are reinvested for social and environmental purposes.
IMPACT	The company makes efforts to measure its environmental and social impact.
GOPPORT	In the next six months, there will be good opportunities to start a business in the region where you live.	The statement directly evaluates the perception of opportunities and expresses their positive relationship with business creation.	Nominal and Dichotomous: Yes= 1 or No=0.
FAILURE	Could the fear of failure prevent you from starting a new business?	The question directly concerns the negative influence of fear of failure over business development.
SPROBLEM	In my country, you often see businesses whose main objective is to solve social problems.	The statement evaluates the perception of social entrepreneurship, according to its definition.

Table 2. Total valid observations in the sample and ages

	INPROD	INPROC	IMPSUST	VSOCIAL	RPROFIT	IMPACT
Number of Men	812	814	1.033	1.026	806	812
Number of Women	590	593	761	756	585	589
Average age	40.84	40.79	41.47	41.52	40.97	40.86
Age standard deviation	14.81	14.72	15.29	15.21	14.79	14.77

Note: INPROD = My organization offers products or services that are new to the market. INPROC = My organization offers a new way to produce a product or service. IMPSUST = Social and environmental values are more important than financial value. VSOCIAL = The company places greater emphasis on social value than on environmental value. RPROFIT = Profits are reinvested for social and environmental purposes. IMPACT = The company makes efforts to measure its environmental and social impact.

Table 3. Spearman’s correlations

		INPROD	INPROC	IMPSUST	VSOCIAL	RPROFIT	IMPACT
INPROC	Coefficient	0.5118	1.000
	P- value	0.0000
IMPSUST	Coefficient	0.1391	0.1470	1.000
	P- value	0.0011	0.0006
VSOCIAL	Coefficient	0.1544	0.1279	0.2940	1.000
	P- value	0.0003	0.0028	0.0000
RPROFIT	Coefficient	0.2329	0.4166	0.3235	0.2278	1.000
	P- value	0.0000	0.0000	0.0000	0.0000
IMPACT	Coefficient	0.2246	0.3821	0.2981	0.2122	0.6160	1.000
	P- value	0.0000	0.0000	0.0000	0.0000	0.0000

Note: INPROD = My organization offers products or services that are new to the market. INPROC = My organization offers a new way to produce a product or service. IMPSUST = Social and environmental values are more important than financial value. VSOCIAL = The company places greater emphasis on social value than on environmental value. RPROFIT = Profits are reinvested for social and environmental purposes. IMPACT = The company makes efforts to measure its environmental and social impact.

Table 4. Multinomial regressions

	INPROD		INPROC
	Beta	P > z	Beta	P > z
IMPSUST	0.094	0.207	−0.131	0.106
VSOCIAL	0.144	0.013	0.113	0.061
RPROFIT	0.182	0.038	0.550	0.000
IMPACT	0.292	0.002	0.391	0.000
N	547		546
LR Chi2(4)	62.63		138.05
P > Chi2	0.000		0.000
Pseudo—R2	0.037		0.089

Note: Beta represents regression coefficients. INPROD = My organization offers products or services that are new to the market. INPROC = My organization offers a new way to produce a product or service.

Table 5. Comparison of correlations by the perception of opportunities

	GOPPORT	INPROD	INPROC	IMPSUST	VSOCIAL	RPROFIT
INPROC	Yes	0.5153***	1.0000
	No	0.4793***	1.0000
	Q- Cohen	0.0674
IMPSUST	Yes	0.1749***	0.1374***	1.0000
	No	−0.0015	0.1102	1.0000
	Q- Cohen	0.1769	0.0327
VSOCIAL	Yes	0.1619***	0.1146**	0.2889***	1.0000
	No	0.1159	0.1199	0.2365***	1.0000
	Q- Cohen	0.1025	0.0967	0.1383
RPROFIT	Yes	0.2370***	0.4050***	0.3632***	0.2309***	1.0000
	No	0.2355***	0.4240***	0.1986***	0.2014**	1.0000
	Q- Cohen	−0.0381	−0.0528	0.1267	0.0726
IMPACT	Yes	0.2250***	0.3314***	0.2535***	0.1920***	0.6440***
	No	0.2164***	0.4737***	0.3111***	0.2137**	0.5149***
	Q- Cohen	−0.0007	−0.1139	−0.0351	0.0310	0.1398

Note: ***, ** and * represent significant correlation, with 99%, 95%, and 90% confidence, respectively, with rho p test. INPROD = My organization offers products or services that are new to the market. INPROC = My organization offers a new way to produce a product or service. IMPSUST = Social and environmental values are more important than financial value. VSOCIAL = The company places greater emphasis on social value than on environmental value. RPROFIT = Profits are reinvested for social and environmental purposes. IMPACT = The company makes efforts to measure its environmental and social impact. GOPPORT = In the next six months, there will be good opportunities to start a business in the region where you live.

Table 6. Comparison of correlations by the fear of failure

	FAILURE	INPROD	INPROC	IMPSUST	VSOCIAL	RPROFIT
INPROC	Yes	0.5860***	1.00
	No	0.4888***	1.00
	Q- Cohen	0.0750
IMPSUST	Yes	0.0767	−0.0122	1.00
	No	0.1562***	0.1902***	1.00
	Q- Cohen	−0.0279	−0.1733
VSOCIAL	Yes	0.0711	0.1129	0.3559***	1.00
	No	0.1746***	0.1323***	0.2733***	1.00
	Q- Cohen	−0.1249	−0.1513	0.0971
RPROFIT	Yes	0.2535***	0.3836***	0.2345**	0.3057***	1.00
	No	0.2277***	0.4249***	0.3425***	0.1955***	1.00
	Q- Cohen	0.0604	0.0178	−0.1169	0.0120
IMPACT	Yes	0.2322***	0.3892***	0.0537	0.2322***	0.5579***
	No	0.2189***	0.3781***	0.3506***	0.1969***	0.6262***
	Q- Cohen	−0.0044	−0.0055	−0.3337	−0.0907	0.0229

Note: ***, ** and * represent significant correlation, with 99%, 95%, and 90% confidence, respectively, with rho p test. INPROD = My organization offers products or services that are new to the market. INPROC = My organization offers a new way to produce a product or service. IMPSUST = Social and environmental values are more important than financial value. VSOCIAL = The company places greater emphasis on social value than on environmental value. RPROFIT = Profits are reinvested for social and environmental purposes. IMPACT = The company makes efforts to measure its environmental and social impact. FAILURE = Could the fear of failure prevent you from starting a new business?

Table 7. Comparison of correlations by the perception of the social role of enterprises

	SPROBLEM	INPROD	INPROC	IMPSUST	VSOCIAL	RPROFIT
INPROC	Yes	0.5253***	1.000
	No	0.5091***	1.000
	Q- Cohen	0.0673
IMPSUST	Yes	0.2216***	0.2469***	1.000
	No	0.05830	0.06780	1.000
	Q- Cohen	0.1892	0.2422
VSOCIAL	Yes	0.3204***	0.2544***	0.3770***	1.000
	No	0.0109	0.0229	0.2219***	1.000
	Q- Cohen	0.3076	0.2932	0.1721
RPROFIT	Yes	0.3152***	0.4382***	0.4126***	0.3751***	1.000
	No	0.1673***	0.3976***	0.2570***	0.1121**	1.000
	Q- Cohen	0.1139	0.0812	0.2589	0.3105
IMPACT	Yes	0.3508***	0.4929***	0.3971***	0.3182***	0.6039***
	No	0.1317**	0.3129***	0.2231***	0.1381**	0.6219***
	Q- Cohen	0.2378	0.2980	0.2783	0.3117	0.0404

Note: ***, ** and * represent significant correlation, with 99%, 95%, and 90% confidence, respectively, with rho p test. INPROD = My organization offers products or services that are new to the market. INPROC = My organization offers a new way to produce a product or service. IMPSUST = Social and environmental values are more important than financial value. VSOCIAL = The company places greater emphasis on social value than on environmental value. RPROFIT = Profits are reinvested for social and environmental purposes. IMPACT = The company makes efforts to measure its environmental and social impact. SPROBLEM = In my country, you often see businesses whose main objective is to solve social problems.

Table 8. Synthesis of theoretical background, hypothesis, and findings

THEORETICAL BACKGROUND	HYPOTHESIS	FINDINGS	SUPPORT
Previous publications suggest that sustainability is a driver of innovation (Nidumolu et al., 2009) and that these concepts are linked (Fellnhofer, 2017; Pedersen et al., 2018; El Bilali, 2018).	H1: There is a positive relationship between innovation with sustainability in early-stage ventures.	The evidence confirms the relationship between innovation and sustainability in the group of early-stage entrepreneurs	Yes
Yitshaki and Kropp (2016) linked motivations, recognition of opportunities, and prosocial activities in entrepreneurs. Specific terms such as “opportunities for sustainability” (DiVito & Ingen-Housz, 2019) and “opportunities for innovation” (Fayard et al., 2016) have been adopted.	H2: The relationship between innovation and business sustainability is higher among early-stage entrepreneurs who claim to recognize good business opportunities.	The correlation between innovation and the orientation towards sustainability tends to be higher in early-stage entrepreneurs, who declare to perceive good business opportunities. No significant differences are recognized regarding the prioritization of social innovation, reinvestment of profits, and impact measurement.	Partially
Fear of failure has been considered a disincentive to innovation (e.g., Gurteen, 1998; Standing et al., 2016). Sustainable entrepreneurs are more likely to take risks than regular entrepreneurs (Hoogendoorn et al., 2019).	H3: The relationship between innovation and business sustainability is lower in early-stage entrepreneurs who express fear of failure.	The group that expresses an absence of fear of failure tends to reveal higher correlations between innovation and sustainable actions. No significant differences are recognized regarding the reinvestment of profits and impact measurement	Partially
The social norms affect individual entrepreneurship behaviors (e.g., Arshad et al., 2016; Wach & Wojciechowski, 2016). Glavas and Godwin (2013) evidenced that social norms affect entrepreneurship’s sustainable characteristics. Afridi et al. (2020) support that workers’ positive perception of corporate social responsibility is related to innovative labor behavior.	H4: The relationship between innovation and business sustainability is higher in early-stage entrepreneurs who perceive the social involvement of enterprises.	The correlations are statistically significant in the group that appreciates the social orientation of the companies in their region.	Yes

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