sustainability

Article

Entrepreneurs Traits/Characteristics and InnovationPerformance of Waste Recycling Start-Ups in Ghana:An Application of the Upper Echelons Theory among SEEDAward Winners

Kouame Dangui Dorcas 1, Bekolo Ngoa Celestin 2,* and Shao Yunfei 1

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Citation: Dorcas, K.D.; Celestin, B.N.;

Yunfei, S. Entrepreneurs Traits/

Characteristics and Innovation

Performance of Waste Recycling

Start-Ups in Ghana: An Application

of the Upper Echelons Theory among

SEED Award Winners. Sustainability

2021, 13, 5794. https://doi.org/

10.3390/su13115794

Academic Editor: Fernando Almeida

Received: 18 April 2021

Accepted: 17 May 2021

Published: 21 May 2021

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1 School of Management and Economics, University of Electronic Science and Technology of China (UESTC),N0.2006, Xiyuan Ave, West Hi-Tech Zone, Chengdu 611731, China; koudordan@yahoo.com (K.D.D.);shaoyf@uestc.edu.cn (S.Y.)

2 Faculty of Management Science and Economics, Yibin University, no 8 St.luke, Wuliangye,Yibin 644000, China

* Correspondence: 2020090099@yibinu.edu.cn; Tel.: +86-19934321252

Abstract: Waste management has become a pressing environmental, social, and economic issue.In Ghana, the government has decentralized the waste management system to include privatesector actors as key players to improve the collection, disposal, and recycling of waste. With thisdevelopment, a heterogeneous population of entrepreneurs has engaged in waste recycling, achievingmixed results in terms of performance. The aim of this paper is to identify shared personalitytraits and characteristics of entrepreneurs that make certain firms engage in waste recycling moreinnovatively than others. An extensive literature review was used to identify these personalitytraits and characteristics, which were then modeled using upper echelon theory (UET) to investigatetheir impact on innovation performance. A regression analysis approach was adopted based onthe data collected from 157 entrepreneurs’ founders, co-founders, and shareholders among thewaste recycling firms in Ghana selected for the annual Supporting Entrepreneurs for Environmentand Development (SEED) Award competition. The key contribution of this research is to betterunderstand the relationship between entrepreneur traits and innovation performance. Given the factthat in small start-ups, the founder plays the most important role, this paper serves as a foundation fordefining individual-level factors critical in sustaining sustainable innovation performance in the wasterecycling sector. The results of this study will help shareholders and policymakers better understandand implement strategies for determining and selecting innovative waste recycling entrepreneurs.

Keywords: innovation performance; personality traits; entrepreneurs characteristics; upper eche-lon theory

1. Introduction

Given the global imperative for environmental sustainability (ES) and the decentral-ization of the waste management system in most countries, entrepreneurship in wasterecycling is on the rise [1]. The current boom is expected to be crucial to economic andsocial growth [2]. Previous studies [3,4] and recent ones [5,6] demonstrated that wasterecycling is the solution to the continuing increase in waste production and resource de-pletion. Moreover, entrepreneurship in the waste management sector also contributes todiversified socio-economic infrastructures in the forms of employment creation, flexibility,and innovations [2]. Against the backdrop of low organization levels and irregular incomestreams that characterize firms of this sector, the subset of innovative entrepreneurs inwaste recycling often transforms depressed economic regions through creativity [2], op-timization of the entire value chain [7], and innovative resource employment [8]. Often,these efforts result in waste reduction and improved environmental benefits [9].

Sustainability 2021, 13, 5794. https://doi.org/10.3390/su13115794 https://www.mdpi.com/journal/sustainability

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Yet, in developing countries such as Ghana, the environmental and economic con-tributions of waste recycling entrepreneurs are often overlooked or misunderstood ashindrances to efficient solid waste management (SWM) [1,10]. Nevertheless, the currentaward scheme competitions from organizations such as Supporting Entrepreneurs for En-vironment and Development (SEED) celebrate the innovation of these local entrepreneursto enhance creative innovation and competitive advantage. Among the few that have beencelebrated for their distinguished innovation, nothing so far is known about whether thereis a particular entrepreneurial profile that makes them and their firms more innovative. Inthis vein, an increasing number of studies have focused on the innovative entrepreneur,as innovativeness has been proven to be vital for a firm’s competitive advantage andlong-term survival [11]. Especially, the personal characteristics of entrepreneurs have beeninvestigated using multiple concepts and methods of analysis [12–15]. This is explained bythe fact that these individual factors are regarded as critical to the entrepreneurial intentionand can also impact firms’ innovation performance [8,15–19].

In an ideal world, entrepreneurship is conceptualized from a nexus of (1) individuals’characteristics including personal traits and socioeconomic network and (2) knowledge-based, technology-driven, or research-driven opportunities [2]. All things being equal, anentrepreneur is an innovator, as his or her activity entails offering services or productsthat are different in some way from the ones that customers are used to [20]. However, ingeneral, the term “entrepreneur” is not only applied to innovators but to a highly heteroge-neous population [2]. While the entire group is associated with entrepreneurial activity,recent studies have often ignored the extraordinary degree to which these subpopulationsvary in their behavior [21] and how individuals’ personality traits can differ greatly de-pending on the type of entrepreneurial operation [22], innovation [23], and performanceresults [24]. For example, multiple cohort studies investigating the relationship betweenrecycling firm innovation and entrepreneur characteristics have discovered that the latterhave a major effect on innovation [15,24–26]. Additionally, specific personal traits havebeen associated with prompting people to become entrepreneurs in waste management [27],as well as personal motivations [8] and preferences that keep entrepreneurs on their cho-sen path [28]. Interestingly, according to Henrekson and Sanandaji [29], unless toughermeasures of more competitive entrepreneurship, such as incorporated entrepreneurs [30],creative and high-growth entrepreneurs [3], or venture-capital-(VC)-backed or even bil-lionaire entrepreneurs [31], are added, the relationship between a country’s proportion ofentrepreneurs and GDP per capita remains negative. One of the most important impli-cations of this finding is that different types of entrepreneurs are supposed to contributeto economic growth in different ways [17]. Thus, distinguishing the majority of newentrepreneurs in waste recycling from those few innovative ones that create benefits forsociety is of great importance, especially in developing countries where among jobs avail-able in the informal sector, waste recycling is frequently the first point of entry as well asthe last resort. Namely, entrepreneurial characteristics play a key role in encouraging andsustaining innovation-based entrepreneurship in waste recycling, which in turn contributesto regional economic growth and development.

In most previous studies, the common method to study factors that impact conditionsfor innovation and entrepreneurship in economic systems has been based on the nationalsystem of innovation (NSI) framework [32]. This framework put emphasis on the role ofinstitutions [29], environmental factors [2], and public policy [3,33] on entrepreneurship.While these factors shape firms’ behaviors such as their entrepreneurial activities [34] andintention into entrepreneurship [35], it has been argued that the NSI literature still hasa poor understanding of the individual entrepreneur. For instance, there is some incom-patibility between two perspectives, such as the person-centric view of entrepreneurshipand the issue of macro-level analysis [34]. Additionally, innovation research that is basedon the Oslo Manual paradigm fails to control for entrepreneurial characteristics, becausethese dimensions are not covered in the surveys [36]. Meanwhile, every company is uniquein terms of the top managers team (TMT) decision-makers’ cognitive perceptions and

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expectations about the future, alternatives, and the implications of each choice [37]. As aresult, the condition that fosters creative entrepreneurship should take into account theentrepreneur’s cognitive perspective when making decisions about opportunity assess-ment, venture development, and the efficient growth of new venture formation [12]. Thisis particularly true in small businesses like waste recycling start-ups, where the founder isusually closer to the decision-making process, and therefore his or her attitude, motiva-tions, expertise, and attitudes are likely to have a greater impact on the firm’s structure,management, and efficiency.

Theoretically, Hambrick and Mason’s [38] upper echelons theory (UET) has been recog-nized as one of the most important perspectives to explain the impact of the entrepreneur’straits and characteristics on a firm’s performance [38]. Strategic choices, according to thetheory, are dictated and influenced by the values and cognitive bases of the organization’sdominant/powerful coalition/actors, especially the TMT [38,39]. Based on this assumption,entrepreneurs’ characteristics and experiences influence their perceptions, choices, andactions in ways that eventually impact a variety of firm results such as firm actions andperformance [40,41]. In developing countries such as Ghana, this theoretical perspectivemight be the most important way to better understand the mixed performance outcomes offirms within the waste management sectors. For instance, among the heterogeneous popu-lation of entrepreneurs active in solid waste collection recovery and recycling, we have,on the one hand, some enterprises characterized by low entry barriers, low organizationlevels, and irregular income streams [1,42,43]. On the other hand, some entrepreneurs havedemonstrated great potential through creativity [44]. In the Ghanaian context, decisionsare often left to the founder entrepreneurs, who, in collaboration with a few other keyshareholders (co-founders and shareholders), will leverage the potentials of establishedtheories to place and reposition the organization’s future strategic choices. So far, Ghana-ian entrepreneurs have extrapolated results from international scholarships as if the twoworlds are identical. However, given the critical role of innovative entrepreneurship ineconomic development and the apparent scarcity of local scholarly inquiries that provideguidance for effective waste recycling entrepreneurship in the midst of an entrepreneurialboom, this type of research is essential. Therefore, despite some minor variations, themain goal of this paper was to reproduce, among other things, the work of Hambrickand Mason [39], respond to the criticisms raised by Bret et al. [38], and supplement theirfindings with Ghanaian experience by revealing the impact of observed demographicvariables on entrepreneur results.

To achieve this objective, we selected 14 start-up firms in waste management in Ghanathat have been championed by the SEED award. The award is an annual international pro-gram that recognizes the most creative and promising locally driven start-up eco-inclusiveenterprises in developed and emerging economies. Each SEED winner is selected by anindependent international jury based on the enterprise’s potential to scale up their contribu-tions to poverty eradication and environmental sustainability while leading the transitionto a green economy. In our study, these entrepreneurs represent the subset of innovativeentrepreneurs in the waste recycling sector. According to the literature, entrepreneurialbehavior is an unintentional determinant of firm success, and variables that influence thebehavior can have a direct impact on the performance induced by the behavior [12,45].Thus, we posit that the entrepreneurial characteristics are expected to exert influence overfirm performance, particularly over firm innovation performance. Consequently, the aim ofthis paper is to identify the prominent personality traits and characteristic drivers amongselected SEED award winners that lead to innovative performance through the leans ofUET. We propose that the psychological and demographic features of a firm’s founder maybe used to forecast the firm’s decisions and outcomes. Specifically, we focused on clarifyingthe role of various individual characteristics for start-ups in waste recycling to surviveand achieve impressive innovation performance. We concentrated on the position of en-trepreneurs as founders, co-founders, and shareholders from this perspective, because theyare considered vital to the innovation process [2,46,47] and they make strategic business

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investment, project selection, and resource allocation decisions [19]. We examined how thedemographic variables of gender, age, experience, and education and the cognitive char-acteristics of locus of control, self-efficacy, risk-taking, and curiosity propensity influencefirm innovation performance in the context of Ghanaian waste recycling entrepreneurs.Based on a review of the literature, this study presents a research model and tests of themodel using a multiple regression analysis model with individual-level data from founders,co-founders, and shareholders of Ghanaian recycling companies nominated for the SEEDaward from 2010 to 2019.

2. Literature Review and Conceptional Framework2.1. Conceptional Framework

Within any organization, the “levers of power are uniquely concentrated in the handsof the CEO” [48], especially in the case of small businesses, where the entrepreneur isusually more involved in the decision-making process. In most start-ups, there is no realdistinction between the positions of CEO and the other managerial positions, as the en-trepreneur (founder and co-founder) generally runs these positions to cut down payrollexpenses. Empirically, studies and reviews have supported that the CEO/entrepreneur’scharacteristics are associated with organizational outcomes [49,50]. According to upperechelon theory, it is the power bestowed upon the CEO that gives him or her the possibilityand arguably the responsibility to steer the company in the right direction [39]. Subse-quently, the resultant innovation performance is often the key to assessing the quality andrealization of such strategies.

Innovation performance is described as the firm’s willingness to actively promoteinnovative ideas, novelty, experimentation, and innovative problem-solving [51]. Followingwith the UET, well-documented studies in the management field (e.g., strategy, finance,marketing) have investigated the major factors that determine the innovative performanceof a business venture [39,52]. These factors can be divided into two categories includinginternal and external factors. The first internal factors can be the entrepreneur’s personalitytraits, which affect the choices and, thus, the organizational performance [39]. Amongthese traits, we consider the entrepreneur’s self-efficacy, locus of control, risk attitude, andcuriosity to be influential. Second, the demographic variables are also important [39]. Thisincludes age, education, and gender. Third, we include experience, because it portrays manyof the background characteristics that the CEO brings to bear on judgment and decisionsthat impact the firm’s strategy. As external factors, we include perceived support of publicpolicy and public policy instability, which make our conceptual framework a comprehensiveframework capturing the internal and external factors likely to influence the entrepreneur’sdecision making. Piecing this together, Figure 1 illustrates our research model by showingthe link between internal and external factors and innovative performance.

2.2. Entrepreneurs’ Personality

A rapidly increasing body of research associates entrepreneur personality traits withfirm innovation performance.

2.2.1. Self-Efficacy

Self-efficacy is described as a person’s belief in their ability to perform a task andachieve its goal. Self-efficacy is an important characteristic for entrepreneurs, because itincreases the incentive to pursue personal goals and the desire to develop new knowledge,which promotes innovation [53]. Recent studies suggest that a high level of self-efficacyrelates to work performance [54], small business development [55], academic achieve-ments [56], and career choice [57]. Furthermore, research findings posit that entrepreneurs’self-efficacy is positively related to innovation [58]. For example, in a longitudinal study,the authors of [59] confirm that those with high entrepreneurial self-efficacy are more likelyto become nascent entrepreneurs and achieve high innovative performance. Literaturealso shows that a high-self-efficacy individual can be over-optimistic in estimating the

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probable future returns and underrate the likelihood of failure from uncertain activities,because they tend to overestimate their own ability to control situations and make optimaldecisions [60,61]. It follows that high-self-efficacy entrepreneurs are more willing to initiateinnovation-related activities and deliver better performance. On the basis of the researchgoals and a systematic analysis of literature, the following hypothesis has been generated:

Hypothesis 1 (H1). Self-efficacy has a significant and positive effect on waste recycling firms’innovation performance.

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Figure 1. Comprehensive research model of entrepreneurship innovation performance. Source: previous literature [11,24,41].

2.2. Entrepreneurs’ Personality A rapidly increasing body of research associates entrepreneur personality traits with

firm innovation performance.

2.2.1. Self-Efficacy Self-efficacy is described as a person’s belief in their ability to perform a task and

achieve its goal. Self-efficacy is an important characteristic for entrepreneurs, because it increases the incentive to pursue personal goals and the desire to develop new knowledge, which promotes innovation [53]. Recent studies suggest that a high level of self-efficacy relates to work performance [54], small business development [55], academic achieve-ments [56], and career choice [57]. Furthermore, research findings posit that entrepre-neurs’ self-efficacy is positively related to innovation [58]. For example, in a longitudinal study, the authors of [59] confirm that those with high entrepreneurial self-efficacy are more likely to become nascent entrepreneurs and achieve high innovative performance. Literature also shows that a high-self-efficacy individual can be over-optimistic in esti-mating the probable future returns and underrate the likelihood of failure from uncertain activities, because they tend to overestimate their own ability to control situations and make optimal decisions [60,61]. It follows that high-self-efficacy entrepreneurs are more willing to initiate innovation-related activities and deliver better performance. On the ba-sis of the research goals and a systematic analysis of literature, the following hypothesis has been generated:

Entrepreneurs’ Personality • Self-efficacy • Locus Control • Risk Attitude • Entrepreneurs Curiosity

Entrepreneur’s Demographics • Age • Education • Gender • Experience

External Factors • Perceived Public policy

Support • Public Policy Instability

Innovation Performance • Innovation • Potential to scale up • Economic, social, and envi-

ronmental benefits

Figure 1. Comprehensive research model of entrepreneurship innovation performance. Source: previous literature [11,24,41].

2.2.2. Locus of Control

While an entrepreneur’s self-efficacy tends to increase the firm’s innovation, it may notbe sufficient for successful innovation performance. The motivation view of self-efficacy iscomplemented by the cognitive perspective of locus of control (LOC). A survey of 178 en-trepreneurs showed that successful innovators have a high internal LOC, which convincesthem that they can impact results through their own ability, effort, or skills instead of leav-ing external circumstances to control these results [62,63]. Findings also associated LOCwith engaging and succeeding in entrepreneurship activities [64]. For instance, internalLOC is positively correlated with venture size and growth rates according to a surveyof 168 Chinese entrepreneurs in small and medium-sized businesses in Singapore [65].Furthermore, extant research has shown that people with internal LOC are open to newexperiences, possess the ability to handle changing conditions, and dislike structured andrepetitive situations [66]. According to the findings of [67], entrepreneurs with high internal

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LOC produce more innovation outcomes in terms of patents and associated citations. Over-all, the LOC personality trait has a lot of support and is fairly consistent across differenttypes of entrepreneurs. On the basis of the research goals and a systematic analysis ofliterature, the following hypothesis has been generated:

Hypothesis 2 (H2). Internal locus of control has a significant and positive effect on waste recyclingfirms’ innovation performance.

2.2.3. Risk Attitude

Individuals with a risk-taking attitude can change their behavior in a variety of ways,which can influence their decisions and actions as entrepreneurs later in life. Althoughpsychology literature indicates that risk preferences [68], risk tolerance [69], risk aver-sion [70], and risk propensity [71] can be associated with excessive optimism [72], a fewrecent studies [73,74] found that entrepreneurs with a risk attitude impact entrepreneurialoutcome. For example, in their study of 178 entrepreneurs operating Italian manufacturingfirms in 2007, the authors of [68] discovered that firms run by risk-loving entrepreneursperform better. The authors compared companies that produce new products to companiesthat do not. Risk attitudes were gauged using a fictitious lottery query, which was thencompared to product portfolios and other financial data at the firm level. A parallel studyof risk-averse and risk-loving entrepreneurs found that the launch of a new product hada positive (and significant) impact on firm growth only in the sample of firms owned byrisk-loving individuals. Entrepreneurs who like taking risks are more likely to introducenew products in the first place, implying that this personality trait will help companiesdevelop through innovation. On the basis of the research goals and a systematic analysisof literature, the following hypothesis has been generated:

Hypothesis 3 (H3). Risk attitude has a significant and positive effect on waste recycling firms’innovation performance.

2.2.4. Entrepreneurs’ Curiosity

Many studies have looked into the relationship between an entrepreneur’s curiosityand organization outcomes [75]. Curiosity is the main driver of innovativeness, as it helpsto develop an innovative way to fulfill a need or produce an opportunity. Accordingly, theauthors of [76] found that curious entrepreneurs have the ability to “think out of the box”,which contributes to collaborative links between the entrepreneur and their environment,including participation in inter-organizational relationships and networks. A curiousentrepreneur is constantly on the lookout for new ideas, employing open quest techniquesthat enlist the assistance of a variety of external players and sources in order to achieve andmaintain innovation. Research findings have related entrepreneurs’ curiosity to a strivingtoward knowledge and novel business approaches [77]. On the basis of the research goalsand a systematic analysis of literature, the following hypothesis has been generated:

Hypothesis 4 (H4). Entrepreneurs’ curiosity has a significant and positive effect on waste recyclingfirms’ innovation performance.

2.3. Entrepreneurs’ Demographics

For demographics characteristics, we emphasize entrepreneurs’ age, education, andgender.

2.3.1. Age

Age is a good determinant for a person’s experience. Previous studies have ex-plored the relationship between the entrepreneur’s age and the firm’s innovation perfor-mance [45,78]. Findings suggest a general consensus that an entrepreneur’s age is nega-tively associated with innovation [72,78,79]. For instance, Jeraf [72] found that younger

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entrepreneurs spend more on research and development compared to older ones. Thismay be explained by the fact that younger entrepreneurs intend to show their superiorcapability to the market by pursuing aggressive investment in innovation. In contrast, olderentrepreneurs might be much more concerned with the financial stability of their initiativeand therefore less willing to engage in new ideas for innovation. Additionally, they areless likely to seek growth through innovation strategies in an effort to seize perceivedopportunities. On the basis of the research goals and a systematic analysis of literature, thefollowing hypothesis has been generated:

Hypothesis 5 (H5). Age has a significant and negative effect on waste recycling firms’ innovationperformance.

2.3.2. Education

The education level of the entrepreneurs is also an important source of skills, knowl-edge, networks, and problem-solving ability, and it is considered a key aspect of en-trepreneurial success. The level of education, that is, the amount of formal schooling, typeof education, and quality of education, is the significant determinant of the entrepreneurs’educational background, and it is associated with firm performance. Findings from relatedstudies posit that firms owned by more educated entrepreneurs have a higher probability ofinnovating [15,29,80]. For instance, ref. [50] found a positive link between an entrepreneur’slevel of education and the number of new/improved products/registered patents. Theyargue that entrepreneurs with more education have greater cognitive complexity, meaningthey are better able to acquire and interpret complex knowledge and make quicker deci-sions. However, entrepreneurship requires a combination of multiple skills, meaning thatindividuals with a diverse set of skills are more likely to succeed as entrepreneurs thanthose who specialize in a single field. Thus, a higher educational level is predicted to bemore conducive to innovation only up to some level. On the basis of the research goals anda systematic analysis of literature, the following hypothesis has been generated:

Hypothesis 6 (H6). Education has a significant and positive effect on waste recycling firms’innovation performance.

2.3.3. Gender

Women are less likely than men to start a company, and this disparity has remainedconsistent for several decades. Some industries, such as services and sales, have a highpercentage of female entrepreneurs, while others, such as construction, have a low per-centage. Related to the association of gender with innovation performance, recent studies’findings report mixed results. On the one hand, female entrepreneurs are positively as-sociated with innovation [81]. On the other hand, innovation is more prevalent amongmen [82]. Women, for example, prefer to specialize in business sectors where innovationis less widespread, according to [83]. Women-owned businesses have less innovationscope and depth than men-owned businesses [82]. On the positive side, female managerscan significantly promote firms’ technological innovation [81], and gender diversity canfacilitate a high level of creativity and innovation. This is due to the fact that females canoffer more detailed information analysis to TMTs and provide businesses with a variety ofperspectives and problem-solving methods. Women, on average, have stronger skills thanmen in promoting the exchange of ideas and information, resolving disputes, respondingto change, and empowering and encouraging others, all of which are vital to creativity,according to empirical studies [84,85]. On the basis of the research goals and a systematicanalysis of literature, the following hypothesis has been generated:

Hypothesis 7 (H7). Gender has a significant and positive effect on waste recycling firms’ innova-tion performance.

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2.3.4. Entrepreneurs’ Experience

Findings indicate that entrepreneurs’ experience may be one of the first major fac-tors that make the difference between firms’ innovativeness [13,26]. It is suggested thatentrepreneurs who have accumulated experience through previous business ownershipor failed businesses may have acquired understanding and expertise required to identifya better opportunity. They have the ability to integrate apparently unrelated informationthat a novice cannot grasp and potentially implement more innovative opportunities.However, experience can also become path dependent, and a lock-in effect might takeplace. According to [86], path dependence on previous experience can come with biasesin decision making, because the entrepreneur might have the impression of knowing itall, making decisions based on limited information, becoming constrained by the familiarand becoming overconfident. Consequently, it will be challenging for the entrepreneursto find new opportunities. Eventually, their innovativeness will be affected by this pathdependency on prior experience, and the firm will become less innovative as well. Theseemingly inverted relationship is between prior business ownership and opportunityidentification but not with the innovativeness of the last opportunity found, meaning thatexperience may affect opportunity identification but not the innovativeness of an alreadygenerated opportunity. Furthermore, former employee tenure positions can be consideredas useful experience for conducting an innovative business. It is assumed that, throughtheir tenure, the formal employee may have acquired tacit knowledge about the industryand accumulated some relevant social capital important for the new venture business.According to [87], being a former employee of a well-established company is a great sourceof entrepreneurship. According to [86], prior work experience of the entrepreneurs is asignificant determinant of innovation in small firms irrespective of the sector in which theexperience was obtained. On the basis of the research goals and a systematic analysis ofliterature, the following hypothesis has been generated:

Hypothesis 8 (H8). Entrepreneurs’ experience has a significant and positive effect on wasterecycling firms’ innovation performance.

2.4. External Factors

Public policy is directly under the control of the government, and thus it is criticalin directing entrepreneurs’ behavior. Policies are generally implemented in the form ofregulations through which the government regulates the actions and the economic activityof individuals and firms [88]. The ability to create a favorable business climate is a prereq-uisite for entrepreneurship’s purpose and development [3]. Several studies have shownthat long-term entrepreneurial support policies and different aspects of firm innovationhave a favorable relationship [89]. For example, Patanakul and Pinto [90] found that byproviding fiscal incentives, tax credits, and easily accessible information, government andpublic policy can foster favorable cultures that can build an entrepreneurial atmosphereand encourage firms’ willingness to change, thereby fostering innovation. In Ghana, gov-ernment support programs such as managerial and technical training have been found todrive innovation among SMEs [43]. Moreover, government seed grant and startup moneythrough direct support payment or nonmonetary grants has encouraged entrepreneurs’innovation capacity, which eventually promotes entrepreneurial innovation performance.

In contrast, instability of government policies resulting from frequent changes ingovernment policies can negatively affect entrepreneurship’s activities and hence en-trepreneurship innovation performance. In Ghana, unstable government policies have ledto the bankruptcy of many firms, as these recurrent policy changes by the governmentinfluence the interest rate. In the same vein, the findings of Quartey [91] linked the gov-ernment’s uncertain policy climate to high inflation rates, which result in regular priceincreases, affecting consumers’ and entrepreneurs’ buying power. According to research,an unstable policy climate will lead to a depreciation of the local currency, increasing thecost of importing and exporting. Fiestas and Sinha [92] theorized that insecure government

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policies could increase the likelihood of businesses failing and experiencing low growth.On the basis of the research goals and a systematic analysis of literature, the followinghypotheses have been generated:

Hypothesis 9 (H9). Perceived government support has a significant and positive effect on wasterecycling firms’ innovation performance.

Hypothesis 10 (H10). Perceived government policy instability has a significant and negativeeffect on waste recycling firms’ innovation performance.

3. Methodology and Measurement3.1. Data and Sample

We analyzed waste recycling innovative enterprise’s founders, co-founders, andshareholders from Ghana based on individual-level data gathered using a structuredsurvey questionnaire. The waste recycling (small and medium businesses) SMBs wereselected according to the finalists of the SEED award nomination from the year 2010to 2019. The SEED Award for Sustainable Development Entrepreneurship is an annualinternational awards program that seeks to recognize the most creative and promisinglocally driven start-up eco-inclusive enterprises in developed and emerging economies.The survey was designed to collect personal trait and characteristic information about thefounders, co-founders, and shareholders of the nominated waste recycling SMBs fromGhana based on their innovation performance accredited by the SEED award competition.The sample includes all waste recycling companies who reach the finals of the competition.The original data from the SEED award competitions of individual start-ups from Ghanaincludes 30 waste recycling companies. After excluding community-held projects andstartups with untraceable founders, we used a sample of 153 founders, co-founders, andshareholders from 14 waste recycling SMBs for analysis. We focused on founders, co-founders, and shareholders whose profiles could be traced on social media, because thesurvey was performed online, and part of the information related to them was collectedfrom the company’s website, personal profile on Facebook, and Linkedin.com.

3.2. Measurement of the Constructs

This study uses a multiple regression analysis to investigate the effect of founders’, co-founders’, and shareholders’ personal traits and characteristics on innovation performanceof small and medium businesses (SMBs) in waste recycling in Ghana. The constructs weremostly adopted from previous research and tweaked for use in an innovation environment.Firstly, innovation performance, the dependent variable, was estimated according to theSEED Award selection, that is, a company’s willingness to actively promote innovative con-cepts, experimentation, and creative solutions. In the literature, Schumpeter [2,7] referredto the term “innovation” as “anything that was carried out through new combinations andmanifestation of (1) the introduction of a new (or improved) good, (2) the introductionof new methods of production, (3) the opening of a new market, (4) the exploitation of anew source of supply and (5) the re-engineering/organization of business managementprocesses” [7]. Innovativeness is described as the widespread acceptance within an organi-zation of novel creations and new goods, facilities, processes, administrative structures, orany combination of these that affect overall firm efficiency [51]. As a result, innovation per-formance encompasses the generation of new ideas for challenging problems, the discoveryof new working methods, strategies, innovations, or instruments, the identification ofperformance holes, the mobilization of resources for innovative ideas, and the conversionof innovative ideas into useful implementations [93,94].

Both subjective and quantitative metrics may be used to evaluate a company’s inno-vation success. Subjective tests are most widely used by new projects, because objectivemeasures can be difficult to interpret and are less vulnerable to standard practice bias.Subjective measures, on the other hand, have shown high reliability and validity [19]. Three

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criteria from the SEED Award selection criteria were used in this analysis. Item one, “thecompany demonstrates entrepreneurship and innovation”, reflects that the company hasachieved a significant contribution to innovation and a satisfactory performance duringthe year. Item two, “having the potential to scale up and or be replicated in other contexts”,reflects the potential of company growth. Item three, “having the intention and potential tobecome financially sustainable”, reflects the sustainability of the company, which reflectsits continued innovation performance.

Secondly, the independent variables, sex, age, experience, and education of the en-trepreneur, were among the demographics of the respondents. The age, gender, andeducation level were identified from the entrepreneur’s profile on Linkedin.com. Edu-cational levels of entrepreneurs were categorized as up to diploma level and degree andabove, and were coded (0 = Otherwise, 1 = having). The gender of the entrepreneurs wasalso coded as male (0 = Otherwise, 1 = Male) and female (0 = Otherwise, 1 = Female). Ageand entrepreneurial experience were measured as continuous variables. The research’sother independent variables all focused on the study constructs. All of the constructs wererated on a five-point Likert scale, with 5 denoting strong agreement, 4 denoting agree-ment, 3 denoting neutrality, 2 denoting disagreement, and 1 denoting strong disagreement(strongly disagree). The construct of self-efficacy was measured using a general self-efficacyscale developed by Schwarzer et al. [77]. To assess and recognize self-efficacy values, thisscale was composed of ten items adapted from Khedhaouria et al. [9]. “I can still manageto solve tough problems if I try hard enough” and “no matter what comes my way, I’malways able to handle it” are two examples of self-efficacy products. The locus of controlof behavior scale [78] was used to assess the construct of internal locus of control. Thisscale consists of 16 items that assess how much a person believes behaviors are a resultof their conduct. When an activity is due to personal efforts, it is considered an internalcontrol. “When I make plans, I’m almost confident that I’ll be able to make them work”,for example, is one of the items. A five-item instrument was adapted to calculate thebuild of entrepreneur curiosity [7]. Hermans [79] introduced the scale, which was alsodiscussed in the literature by McClelland [38] and later in 1987. The scale adapted fromKhedhaouria et al. [9] was used to assess entrepreneurial risk attitude. This scale wasdeveloped by Covin and Wales [58] based on the three dimensions of entrepreneurialbehavior: risk taking, innovativeness, and proactiveness. Each dimension had three thingsto quantify actions in this analysis. The following control variables were used in the study:family support, with and without prior entrepreneur experience, coded as (0 = Otherwise,1 = Yes).

3.3. Validity and Reliability

The constructs’ validity and reliability were examined in order to determine theprecision of their measurement capacity. The validity of the research variables had alreadybeen established in previous studies [45,66], but we double-checked it with an 18-personpilot survey to eliminate any anomalies or ambiguities before the actual survey. Thequestions were administered during the opening of the Green Corporation Star award atthe plush Kempinski Hotel in Accra Ghana. The reliability of constructs was measuredby the Cronbach’s alpha. The reliability test and internal consistency carried out on itemsleading to self-efficacy, curiosity, risk attitude, and locus of control all showed Cronbach’salpha > 0.7, indicating all items led the construct to reach acceptable reliability [94].

4. Empirical Study4.1. Analysis

The SPSS Version 23 (SPSS IBM, NY, USA) was used to analyze the data. Given thatthe extent of waste recycling firm innovation performance is influenced by entrepreneurs’idiosyncrasies, gender (X1), age (X2), work experience (X3), education (X4), locus of control(X5), curiosity (X6), risk attitude (X7), self-efficacy (X8), perceived public policy support(X9), and perceived public policy instability (X10),

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Yi = a + b(X1) + b2(X2) + b3(X3) + b4(X4) + b5(X5) + b6(X6) + b7(X7) + b8(X8) + b9(X9) + b10(X10) + ei

whereei = error term for regression coefficient equation for ith observationa = intercept coefficient; b1, b2, b3, b4, b5 b6, b7, b8, b9, b10 = respective slope

coefficient for independent variables X1, X2, X3, X4, X5, X6, X7, X8, X9, X10.Yi = innovation performanceIn order to identify the relationship between demographic characteristics, entreprene-

urial personality traits, and perceived support of public policy on innovation performance,first, we test for collinearity. We perform a multicollinearity test using variance inflationfactors (VIFs). Variance inflation factors (VIF) for all variables were tested to detect theabsence of multicollinearity among continuous variables, indicating independent impactsof each variable. The results show that all variables’ variance inflation factors (VIF) arebelow the threshold value of 10, indicating that multicollinearity is not a concern amongindependent variables. Next, the correlation method was employed, and the result isshown in Table 1. Table 1 shows the correlation matrix for all variables indicating a directrelationship between demographic variables, personality traits of entrepreneurs, perceivedpublic support, and innovative performance, except for perceived public policy instability,which shows a significant inverse relation with innovative performance. The correlationmatrix tested at a 5% significant level indicated that demographic characteristics age(0.1827 *), work experience (0.2679 *), and degree and above (0.3497 *) have a positivesignificance relation with innovative performance. The matrix further indicated thatentrepreneurs’ personality traits, locus of control (0.3835 *), curiosity (0.5314 *), risk attitude(0.2221 *), and self-efficacy (0.6890 *) have a positive significance relation with innovativeperformance. This shows that as entrepreneurs’ personality traits increase, the innovativeperformance of recycling start-ups in Ghana improves upwardly. Perceived public policysupport (0.4330 *) has a positive significant relation, while perceived public policy instability(−0.2678 *) has a negative significant relation with innovative performance.

Table 1. Correlation analysis.

Variables 1 2 3 4 5 6 7 8 9 10 11 12 13

InnovationPerformance 1

Male 0.0074 1

Female 0.0565 −0.8119 * 1

Age 0.1827 * 0.0609 −0.0473 1

Work Experience 0.2647 * −0.049 0.1081 0.0906 1

Degree and above 0.3497 * −0.2299 0.2744 * 0.0801 0.0906 1

Up to diploma 0.0019 0.2108 −0.2383 0.0554 0.0163 −0.6882 1

Locus of control 0.3835 −0.0941 0.0935 0.09 0.2542 0.2813 −0.1014 1

EntrepreneurialCuriosity 0.5314 −0.1418 0.1732 0.0824 0.163 0.3023 0.0551 0.2984 1

Risk Attitude 0.2221 −0.1368 0.137 0.0758 0.0634 0.1636 −0.0308 0.4411 0.3119 1

Self-efficacy 0.689 −0.0706 0.0471 0.1397 0.0575 0.3763 −0.1634 0.2499 0.4857 0.1263 1

Perceived PublicPolicy Sup 0.433 −0.0046 −0.0686 0.0548 −0.1272 0.2892 0.0892 0.1369 0.3106 0.1498 0.4377 1

Perceived PublicPolicy Inst −0.3679 0.0706 0.0375 −0.0462 0.079 −0.2293 −0.0559 −0.2123 −0.2512 −0.0608 −0.329 −0.8029 1

* Correlation coefficients are significant at 5% level.

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4.2. Regression Analysis

In assessing the effects of the key explanatory variables for the dependent variable,multiple regressions were performed to assess the impact of the independent variablesof demographic characteristics, entrepreneurs’ personality traits, and perceived publicsupport on innovation performance. A progressive enter method was used. Thus, foreach group of variables, a separate regression coefficient describes its relationship with thefirm innovation performance. Pearson’s correlation coefficient was used to analyze theinteractive relationship between each group of variables and firm innovation performance.

4.2.1. Regression Model 1 (Control Variables)

Model 1 in Table 2, including only control variables, is statistically significant only ifp < 0.05 for family support (β = 0.357, p_value = 0.021) has a positive statistically significantinfluence on innovative performance, with previous experience (β = 0.158, p_value = 0.324)having a positive non-statistically significant influence on innovative performance, and a lackof previous experience (β = −0.187, p_value = 0.204) having a negative non-statisticallysignificant influence on innovative performance. The adjusted R-square value is 0.0398,indicating 3.98% of variation of innovative performance is explained by the control variables.The overall F-statistic = 0.0291 < 0.05 indicating the combined effect of control variables isstatistically significant.

Table 2. Regression analysis.

MODEL 1 MODEL 2 MODEL 3

VARIABLES β SE T Sig β SE t Sig β SE t Sig

Family Support 0.357 0.1528 2.34 0.021 0.315 0.1068 2.96 0.004 0.306 0.1057 2.9 0.004

Previous Exp. (Yes) 0.158 0.1604 0.99 0.324 0.045 0.1107 0.41 0.685 0.029 0.1097 0.27 0.79

Previous Exp. (No) −0.187 0.147 −1.27 0.204 −0.13 0.0975 −1.31 0.185 −0.106 0.097 −1.1 0.275

Male 0.036 0.1938 0.19 0.852 0.073 0.1924 0.38 0.705

Female 0.022 0.208 0.11 0.915 0.051 0.206 0.25 0.805

Age 0.002 0.0043 0.41 0.68 0.001 0.004 0.22 0.826

Work Experience 0.382 0.0101 3.22 0.002 0.026 0.0105 2.46 0.015

Degree and Above 0.143 0.195 0.74 0.464 0.009 0.2035 0.04 0.966

Up to Diploma Level 0.127 0.193 0.66 0.512 0.165 0.1917 0.86 0.391

Locus of Control 0.125 0.0607 2.05 0.042 0.144 0.0608 2.37 0.019

Entrepreneur Curiosity 0.13 0.6079 2.09 0.038 0.124 0.0617 2.01 0.046

Risk Attitude 0.044 0.0601 0.75 0.457 0.029 0.0599 0.5 0.617

Self-Efficacy 0.831 0.111 7.49 0 0.854 0.1103 7.75 0.017

Perceived Public policySupp 0.192 0.2245 0.85 0.395 0.138 0.2235 0.62 0.539

Perceived Public policyInstab −0.119 0.1794 −0.67 0.505 −0.147 0.1718 −0.83 0.407

Degree above * AvailableTech 0.018 0.008 2.05 0.042

Adjusted R-Square 0.0398 0.6078 0.6168

Over all F-statistics 0.0291 0 0

Effect of independentVariables - 0.568

4.2.2. Regression Model 2 (Control Variables and all Independent Variables)

A regression model was used to determine the significant effect of demographicvariables and entrepreneurs’ personality traits and start-up methodology on innovativeperformance. The adjusted R-square value is 0.6078, indicating 60.78% of variation of

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innovative performance is explained by the control variables and independent variables,showing independent variables’ effect of 56.80%. The overall F-statistic = 0.000 < 0.05,indicating the combined effect of control variables and independent variables, is statisti-cally significant.

Model 2 in Table 2 is statistically significant only if p < 0.05, male (β = 0.036,p_value = 0.852) have positively non-significant impact, female (β = 0.026, p_value = 0.915)has a positively non-significant impact, age of entrepreneur (β = 0.002, p_value = 0.680)has a positively non-significant impact, work experience (β = 0.382, p_value = 0.002) has apositively significant impact, degree and above (β = 0.143, p_value = 0.464) has a positivelynon-significant impact, and up to diploma (β = 0.127, p_value = 0.512) has a positivelynon-significant impact. It is observed that among the SEED winners in recycling in Ghana,work experience has a significant positive impact on innovative performance.

In Model 2, statistical significance occurs only if p_value < 0.05, locus of control (β = 0.125,p_value = 0.042) has a positive significant impact, entrepreneur curiosity (β = 0.130,p_value = 0.038) has a positively significant impact, risk attitude (β = 0.044, p_value = 0.457)has a positively non-significant impact, self-efficacy (β = 0.831, p_value = 0.000) has a pos-itively significant impact, degree and above (β = 0.143, p_value = 0.464) has a positivelynon-significant impact, and up to diploma (β = 0.127, p_value = 0.512) has a positivelynon-significant impact. It is observed that among entrepreneurs’ traits, locus of control, curiosity,and self-efficacy have significant positive impact on innovative performance.

In Model 2 (Table 2), statistical significance occurs only if p_value < 0.05, perceivedpublic policy support (β = 0.192, p_value = 0.395) has a positive non-significant impact,and perceived public policy instability (β = −0.119, p_value = 0.505) has a negative non-significant impact. It is observed that, related to the influence of external factors, perceivedpublic policy support has a positive non-significant impact on innovative performance.

Model 3 (Table 2) indicated that the interaction term Degree above * Available Tech(β = 0.018, p_value = 0.042 < 0.05) has a positively significant impact on innovativeperformance, with an interaction effect of 0.009.

5. Discussion

This study investigated the relationship between entrepreneurs’ traits/characteristicsand firm innovation performance among Ghanaian waste recycling entrepreneurs. Respon-dents of this study were selected in the final list of the SEED award competition from 2010to 2019. A regression analysis was used to examine the data from a sample of 153 of theseentrepreneur founders, co-founders, and shareholders. We analyzed the relationship be-tween firm innovative performance and (1) demographic variables (gender, age, education,and experience), (2) self-efficacy, (3) risk attitude, (4) entrepreneurs’ curiosity, (5) locus ofcontrol, (6) perceived public policy support, and (7) perceived public policy instability.

Our study posits that in order to understand why these wastes recycling firms achievehigher innovative performance, there is a need to take into consideration both the hetero-geneous nature of the firm and the cognitive characteristics of the entrepreneurs behindthe business. Our data analysis shows that successful entrepreneurs in waste recycling inGhana have similar backgrounds and are driven by the same cognitive characteristics thatultimately affect the performance of the firms they run, at least in terms of innovation en-gagement. First, the results of this research show that among entrepreneurs’ demographicvariables, experience is significant in explaining firm innovation propensity. In particular,the number of years of the entrepreneur’s previous experience and the positions heldduring their tenure affect the propensity of the firm to introduce innovation. Therefore,the highly experienced entrepreneurs that finally engage in waste recycling start-ups aremore prone to have businesses that innovate. This result is in line with the characteristic ofSchumpeterian entrepreneurs [2] and the factors including those in the complex processmodel of entrepreneurship [23]. Among our respondents, we can cite as an example thecase of Jurgen Meinel, former manager of the Deutsche Gesellschaft für InternationaleZusammenarbeit (GIZ), co-founder of City Waste Recycling in Ghana, and Amadu Ibrahim,

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CEO founder of Deco Ghana, who specifically link their innovative idea with their previousjob experience.

Second, even after controlling for organizational characteristics such as organizationalsize, education attainment is associated with firm innovation performance. An interestingresult of this study is that having a university degree doubles the probability of inno-vating compared to having a diploma. This finding contradicts Lazear’s hypothesis thatentrepreneurs must be jacks-of-all-trades who succeed in a range of skills rather than justone. In a country like Ghana, where high levels of inequality determine access to qualityeducation, getting a degree may be a proxy for other unobservable factors that may benecessary for, or serve as enablers of, firm innovation, such as a better socio-economicbackground and/or wider, more diversified, and high-quality social networks. Firm actionsand creative success are influenced by the relationship between education and the “quality”of social networks [15,76]. Most of the SEED winners in Ghana had completed a universitydegree (e.g., Amadu Ibrahim (Master of Philosophy (MPhil) Development Studies, andNelson Baoteng (Master in Computer Engineering).

Third, our empirical findings show that as entrepreneurs lead their companies acrossa rapidly evolving and globalized environment, the effect of their personal traits, character-istics, and idiosyncrasies is likely to grow and influence overall firm efficiency. Specifically,our study contributes to the existing literature by proposing that waste recycling en-trepreneurs’ self-efficacy, locus of control, and risk attitude contribute to firm innovationperformance. Self-efficacy level, in particular, will predict an entrepreneur’s ability tointroduce new products to the market. While this cognitive aspect has been extensivelyresearched from the perspective of entrepreneurial intent [90,94], few researchers havelinked self-efficacy to innovation. The positive relationship between self-efficacy and inno-vation performance that we found exemplifies one way in which self-efficacy could be auseful influence factor in entrepreneurial functioning. Furthermore, our data suggest thata higher level of self-efficacy is correlated with better performance, contrary to Vancouver,Thompson, and Williams [93] and Yeo and Neal [94], who conclude that low performanceincreases self-efficacy.

We also found that the cognitive characteristic of locus of control is positively re-lated to entrepreneurs’ innovativeness. This result is in line with previous studies inthe risk-propensity literature, which found that locus of control has a positive effect onrisky decisions and innovation in new projects. Locus of control is considered one of themain factors influencing ethical behavioral decision-making toward initiating innovationactivities in the waste recycling sector.

6. Conclusions

The study’s main contribution is a one-of-a-kind attempt to understand the interrela-tionship between entrepreneurs’ traits and characteristics and waste recycling enterpriseinnovation success in Ghana. Our study applied and followed UET to further extract factorsdistinguishing innovative entrepreneurs in waste recycling. By selecting only SEED awardwinners, we have obtained common personality traits and characteristics for successfulentrepreneurs in the waste recycling sector, which has contributed to the entrepreneurshipliterature. Following the regression analysis, four factors were identified as key factorswith high driving power for innovation performance. These factors include entrepreneurs’experience, education, self-efficacy, and locus of control as the four most common charac-teristics and traits of successful entrepreneurs in waste recycling. The results of this studywill assist potential entrepreneurs in waste recycling and government policy-makers toestablish a profile requirement for entrepreneurs in the waste recycling sector.

It is important to note that the model presented in this report, as well as the results,is not without limitations. First, profiling a successful entrepreneur in waste recycling inGhana is a goal; however, not only the identifying personality traits and characteristicscan influence the firm innovation performance. The whole process is complex because ofdifferent reasons. The success of a waste recycling company’s invention can be influenced

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by a broad range of factors, including social factors, cultural impact, group actions, politicaland economic factors, social trade-offs, and social disputes and regulations. All of thesevariables are continually evolving and have a rapid impact on the firm’s climate. As aresult, using a relatively simple model built in this study to describe factors that affectwaste recycling innovation efficiency is very restricted.

Other non-demographic variables that affect firm performance, such as firm size,trading partners, and competitive pressure, were examined in our literature, but theirimpact on innovation performance was not measured. As a result, local academics arebeing challenged to study them. Furthermore, future researchers should differentiatebetween owners, shareholders, and managers, as the data available at the time of thesurvey made it difficult to do so accurately.

Author Contributions: Conceptualization, B.N.C. and K.D.D.; methodology, B.N.C.; software, B.N.C.;validation, K.D.D. and S.Y.; formal analysis, B.N.C.; investigation, K.D.D.; writing—original draftpreparation, K.D.D.; writing—review and editing, B.N.C.; supervision, S.Y.; project administration,K.D.D. All authors have read and agreed to the published version of the manuscript.

Funding: This research received no external funding.

Acknowledgments: We gratefully acknowledge the valuable time and cooperation given by EkotoChristian throughout the proofreading process, and we sincerely acknowledge the cooperation ofselected waste recycling start-ups TMT members who took out time from their busy schedules toprovide data for this work. We acknowledge support by the National Natural Science Fundation ofChina (Grant numbers 71872027, 71572028, and 71971043).

Conflicts of Interest: The authors declare no conflict of interest.

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