WHAT THEORIES EXPLAIN ENTREPRENEURSHIP AS COMPARED TO INNOVATIVE LEADERSHIP?

: Business creation theories were rarely explored with stages that precede the final intention to start a business. Therefore, this paper aimed to examine what factors impact the final decision to start a business and what factors just lead to a more favourable perception of a business opportunity. Several theories recognized by literature like the theory of planned behaviour, traits, cognitive biases, and risk attitudes were tested. Moreover, the explanatory power of these theories to entrepreneurship compared to innovative (leadership) practices was tested. When examining multiple regression models, it was shown that above mentioned theories predict entrepreneurship as well as innovative practices. Model that involved business creation theories predicting opportunity evaluation was significant. Among predictors of opportunity evaluation, it was shown that unrealistic optimism, risk attitudes as well as traits or theory of planned behaviour did contribute to the prediction of opportunity evaluation. When testing multiple regression model of the final decision to invest in the business opportunity, it was shown that it solely depends on risk perception. No theories other than risk perception predicted the decision to start a business. From the multiple regression model explaining innovative practices, it was shown that traits and positive illusions significantly added to the prediction of innovative practices. Overall findings contribute to the debate of entrepreneurship predictors and suggest that the final decision to start a business is rather determined by risk perception. The results suggest that risk perception is the factor, which may distinguish entrepreneurs from others that incline to entrepreneurship but may not found their own business and rather be innovative on the job. This study emphasizes that cognitive phenomena are applicable in explaining entrepreneurial intention and those qualities may be addressed by entrepreneurial education.