Cogent Business & Management

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Fueling recognition of opportunities through

innovative behavior: Mediating role of team
entrepreneurial passion and team innovation
capacity

Rocio Romani-Torres & Diego Norena-Chavez

To cite this article: Rocio Romani-Torres & Diego Norena-Chavez (2023) Fueling recognition
of opportunities through innovative behavior: Mediating role of team entrepreneurial
passion and team innovation capacity, Cogent Business & Management, 10:3, 2259580, DOI:
10.1080/23311975.2023.2259580

To link to this article: https://doi.org/10.1080/23311975.2023.2259580

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Romani-Torres & Norena-Chavez, Cogent Business & Management (2023), 10: 2259580
https://doi.org/10.1080/23311975.2023.2259580

MANAGEMENT | RESEARCH ARTICLE

Fueling recognition of opportunities through
innovative behavior: Mediating role of team
entrepreneurial passion and team innovation
Received: 26 June 2023 capacity
Accepted: 10 September 2023
Rocio Romani-Torres1,2* and Diego Norena-Chavez1,2,3
*Corresponding author: Rocio
Romani-Torres, CENTRUM Catolica
Graduate Business School – Pontificia
Abstract: Opportunities recognition is a crucial predictor to assess the viability of
Universidad Catolica del Peru, Chimu any business in a competitive, changing, and uncertain market. In this context,
264, Pueblo Libre, Lima 15084, Peru
E-mail: rromani@pucp.pe researchers have emphasized innovative behavior should be examined as a driver to
recognize opportunities. Despite the growing interest in research on the impact of
Reviewing editor:
Ansar Abbas, Management, innovative behavior on the recognition of opportunities, studies are surprisingly
Universitas Airlangga - Kampus B,
Indonesia scarce. This study seeks to determine how innovative behavior impacts on the
recognition of opportunities through team entrepreneurial passion and team inno­
Additional information is available at
the end of the article vation capacity in a post-pandemic framework, supporting the mediating effects by
resource-based vision theory and opportunity recognition theory. Data were col­
lected in face-to-face surveys to 601 decision-makers of small and medium-sized
enterprises (SMEs) in a textile cluster in Lima, Peru using a cross-sectional research
design by partial least squares structural equation modeling (PLS-SEM). The findings
show that (1) innovative behavior has a positive and significant effect on the
recognition of opportunities, and (2) team entrepreneurial passion and team inno­
vation capacity mediate this relationship. These finding enrich the theories and the
result can serve as the highlights for management, policies designed for innovative
behavior, team entrepreneurial passion, and team innovation capacity in business
that generates a competitive advantage especially in developing countries.

ABOUT THE AUTHORS

Romani-Torres R., is a professor at the Centre for Innovation and Entrepreneurial Development at the
Pontificia Universidad Catolica del Peru. PhD(c) Candidate at CENTRUM Catolica Graduate Business
School, Lima, Peru – PUCP. Master in Business Administration and Health Services Administration.
Specialization in Management at Georgetown University, USA. Lean Black Belt Six Sigma, SCRUM Master.
Norena-Chavez, D., PhD at CENTRUM Catolica Graduate Business School and PhD in Business
Administration in France. MBA from Esade Business School and Master in Business Administration
from Universidad Adolfo Ibáñez. Reserve Officer of the Peruvian Army. Director of the Doctorate in
Administration at the University of Lima, Peru. Coach and Mentor of sustainable entrepreneurship.

Rocio Romani-Torres

© 2023 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
This is an Open Access article distributed under the terms of the Creative Commons Attribution
License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribu­
tion, and reproduction in any medium, provided the original work is properly cited. The terms on
which this article has been published allow the posting of the Accepted Manuscript in
a repository by the author(s) or with their consent.

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Subjects: Latin American & Hispanic Studies; Work & Organizational Psychology;
Entrepreneurship and Small Business Management; Strategic Management; Management
Education; Industry & Industrial Studies

Keywords: innovative behavior; recognition of opportunities; team entrepreneurial

passion; team innovation capacity; SMEs

1. Introduction
In the current business environment, firms are confronted with complex and dynamic market
conditions, characterized by intense competition encompassing technological presence (Iqbal
et al., 2022). In this context, organizations demand innovative solutions that facilitate the recogni­
tion of opportunities (Anwar et al., 2022). Innovative behavior (IB) is an essential element of
sustainable growth, value creation, and even survival of businesses in highly competitive and
changing environments (Suhandiah et al., 2023; Wang et al., 2022). Nevertheless, despite the
existence of a growing interest in the research on the impact of innovative behavior on opportunity
recognition, studies are still scarce and even more lacking in small and medium-sized SMEs
(Bagheri et al., 2022). Along the same lines, it was proposed that opportunity recognition considers
a critical and systematic analysis of relevant market information to acquire knowledge that helps
to recognize opportunities (Khanin et al., 2022).

According to this perspective, innovative behavior becomes a determining factor in the genera­
tion and implementation of new and valuable ideas, which are conducive to opportunity recogni­
tion in businesses (Afsar & Masood, 2018). Kiani et al. (2020) have argued that the entrepreneurial
passion of teams is part of the factors that can convey a positive effect on organizations and their
innovations. Moreover, it is also plausible that the entrepreneurial passion of teams is positively
related to innovative behaviors (Liu & Chen, 2018). Researchers have emphasized that, to better
understand the drivers of entrepreneurial performance, shared entrepreneurial passion and inno­
vative behaviors should be examined to recognize entrepreneurial opportunities (Uddin et al.,
2022). Despite this, the literature has shown that not all businesses can recognize ideas that
need to be transformed into profitable opportunities or discard them (Filser et al., 2020). While
there are some studies linking the two variables (Liao et al., 2022), there are still gaps in terms of
the effect of entrepreneurial passion considered collectively versus individually and its relationship
with innovative behavior (Kiani et al., 2020).

In addition, there may be other variables that mediate the relationship between innovative
behavior and opportunity recognition. According to Kumar et al. (2022), innovativeness mediates
the performance of solution-focused businesses and innovative behavior. Wang and Ahmed (2004)
consider innovative capability as the ability of an organization through its employees to introduce
new products to the market or open new markets and include elements of strategic management
of organizations linked to innovative behaviors and processes. However, despite the growing
evidence of the competitive advantages generated by team capability, researchers agree that
studies are still limited and diffuse in understanding its impact on other variables (Mendoza-Silva,
2021).

Our article makes the following contributions to the literature. (1) we extend the empirical
knowledge concerning how to impact innovative behavior on the recognition of opportunities
through team entrepreneurial passion and team innovation capacity that it is still diffuse in
small and medium-sized enterprises SMEs (Bagueri et al., 2022); (2) this study supports the
relationship between innovative behavior and opportunity recognition through opportunity recog­
nition theory and the resource-based view theory as drivers for improving positive outcomes of the
transcendental team in business management (Baron & Ensley, 2006; Zhu et al., 2022); (3) this
article will provide a comprehensive approach to understanding the influence of innovative beha­
vior concerning the recognition of opportunities by enhancing team outcomes as team innovation
capacity and team entrepreneurial passion in this context post-pandemic world (Ahsan et al.,

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2022; Sari et al., 2023); and (4) it will contribute to the generation of a model of the variables
studied that is useful for both academia and the entrepreneurial ecosystem (Boone et al., 2020).

2. Literature review

2.1. Innovative behavior

An important role in organizations that strive for continuous innovation that goes beyond the
employee´s job responsibilities is represented by innovative behavior (Norena-Chavez & Guevara,
2020). IB is defined as the cognitive and motivational process (Afsar & Masood, 2018) which
focuses on introducing, developing, and implementing new ideas to seek novel solutions to
complex and uncertain problems (Scott & Bruce, 1994). It can also be defined as a multistage
process in which an individual recognizes a problem, then generates new ideas and solutions, and
produces an applicable model useful to the organization (Wang et al., 2022). Hence, innovative
behavior is considered a process that enables employees to generate, create, develop, apply,
promote, and modify organizational performance (Ali et al., 2020).

2.2. Innovative behavior and recognition of opportunities

Recognition of opportunities (RO) is the capacity to identify new goods, services, commodities,
markets, and methods through new approaches that can potentially change the conditions of
economic exchange (Khanin et al., 2022; Rahman et al., 2022). Baron and Ensley (2006) selected
dimensions for this opportunity recognition by mentioning: problem recognition, willingness to
work capital, risk management, above average product or service, and ability to change the
industry or sector. This relationship is supported by opportunity recognition theory (Baron &
Ensley, 2006), which suggests that experience, interpretation or perception of change, and knowl­
edge influence the cognitive framework of patterns that enable a search and alertness to con­
tribute to the RO contribution of firms. In addition, entrepreneurs are innovative because they see
opportunities in the marketplace and act on them (Anwar, 2023; Chang et al., 2022). This ability to
see opportunities encompasses a range of personal traits and external factors, such as the state of
the market, technological changes, and social trends (Singh et al., 2022). Innovative firms that
support and inspire the generation of new ideas are aligned with the first link of opportunity
recognition (Qader et al., 2022; Rahman et al., 2022). Likewise, the literature points to a positive
association between innovative start-ups and opportunity recognition in emerging market firms
(Caniëls & Motylska-Kuźma, 2023). Based on the above discussion, the following hypothesis is
proposed.

H1: Innovative behavior has a positive and significant impact on opportunity recognition.

2.3. Innovative behavior and team entrepreneurial passion

Entrepreneurial passion is defined as positive feelings consciously experienced through participa­
tion in entrepreneurial activities related to meaningful and meaningful roles for the entrepreneur’s
own identity (Cardon et al., 2009). According to Newman et al. (2021), entrepreneurial passion can
be presented individually and in team. This article will focus on team entrepreneurial passion with
the thematic focus of its activities, as most new ventures are started by entrepreneurial teams that
present challenges to form their ventures with limited resources and uncertain success (De Mol
et al., 2020).

This relationship is explained through the resource-based vision theory postulates that a team’s
entrepreneurial passion is interdependent and can facilitate the identification of opportunities
(Alfoqahaa, 2018)). Furthermore, it adopts an inside-out perspective, arguing that its internal
resources and internal capabilities are limited, inimitable, non-substitutable, and nonreplaceable
resources are better equipped to recognize and act on opportunities for innovation (Ciampi et al.,
2020). Kiani et al. (2020) argue that team entrepreneurial passion is one of the factors that can

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enhance or convey a positive effect on organizations and their innovations. Furthermore, it is also
plausible that team entrepreneurial passion for different activities is positively related to innova­
tive behaviors that impacted organizational innovation (Kiani et al., 2020). Researchers have
emphasized that to better understand the drivers of start-up performance, shared entrepreneurial
passion and innovative behavior should be examined for start-up opportunity recognition (Uddin
et al., 2022). On the other hand, while entrepreneurial passion is conceptualized as an intense and
positive emotion, aligned with productive and innovative outcomes, in some cases it can have
negative effects (Murnieks et al., 2020). Given this discussion, the following hypothesis was
proposed:

H2: Team entrepreneurial passion has a positive and significant impact on innovative behavior.

2.4. Team entrepreneurial passion and recognition of opportunities

There are still contradictions about how team entrepreneurial passion can impact opportunity
recognition in organizations, given the limited number of publications on the effect of team
entrepreneurial passion and opportunity recognition (Luu & Nguyen, 2021). On the one hand,
De Mol et al. (2020) and Mueller et al. (2017) found that while team entrepreneurial passion
was not related to a time horizon, occurring both in the short term and in the long term in
a work team, they also observed that greater diversity in a team negatively influenced team
entrepreneurial passion (TEP) and opportunity recognition. On the other hand, some research
found that TEP played an important role in the learning process for opportunity recognition
(Cardon et al., 2009).

This article proposes that the relationship between team entrepreneurial passion and opportu­
nity recognition was supported by the resource-based view theory RBV, in which positive feelings
and identity that are shared in a group are indicative of team performance (Ahsan et al., 2022).
Furthermore, Costa et al. (2018) found that the relationship between team entrepreneurial passion
and opportunity recognition plays a crucial role in entrepreneurship. In this regard, Cardon et al.
(2009) proposed that entrepreneurial passion has a mediating and also moderating effect on some
organizational performance variables, such as entrepreneurial cognitive formation and business
opportunity recognition (Ngah et al., 2020). Moreover, the higher the entrepreneurial passion, the
better the ability to recognize business opportunities (Su et al., 2022). Consequently, the following
was formulated:

H3: Team entrepreneurial passion has a positive and significant impact on the recognition of
opportunities.

2.5. The mediating role of team entrepreneurial passion in the relation to innovative
behavior and recognition of opportunities
Based on the literature review, a gap in research linking the three variables of team entrepreneur­
ial passion, innovative behavior, and opportunity recognition is identified (Newman et al., 2021;
Wang et al., 2022). This article is supported by resource-based vision theory because it posits that
a team’s entrepreneurial passion is interdependent and can facilitate opportunity identification
(Alfoqahaa, 2018). Entrepreneurial opportunities are more likely to be identified and successfully
exploited by passionate and innovative teams with specialized skills, networks, and expertise and
consequently, RO could be positively influenced by the entrepreneurial passion of the team (Zhu
et al., 2022). This would mean that teams with entrepreneurial passion may be more motivated
and interested in recognizing new opportunities (Qader et al., 2022). Hence, the following hypoth­
esis was proposed:

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H4: Team entrepreneurial passion mediates the relationship between innovative behavior and
recognition of opportunities.

2.6. Innovative behavior and team innovation capacity

Team innovative capacity (TIC) is defined as the skills and knowledge required to appropriately
incorporate and improve existing technologies and create new ones (Romijn & Albaladejo, 2002).
Wang and Ahmed (2004) conceptualized TIC as an organization’s innovation related capability to
introduce new products to the market or open new markets, including elements of the organiza­
tion’s strategic management with innovative behaviors and processes (Wang & Ahmed, 2004).

The relationship between team innovativeness and innovative behavior is supported by the
resource-based vision theory (Alfoqahaa, 2018), as by fostering innovative capabilities, teams
can be better complemented with innovative behavior to recognize and seize entrepreneurial
opportunities (Battistella et al., 2017), and firms need to invest in their collaborative innovativeness
by engaging in participatory innovation activities (Rampa & Agogué, 2021). Based on the above-
mentioned literature, the hypothesis was proposed:

H5: Team innovation capacity has a positive and significant impact on innovative behavior.

2.7. Team innovation capacity and recognition of opportunities

Although the opportunity recognition is present in all firms, there is a difference in that, in small
firms, it is perceived more intuitively and improvisationally, whereas, in large firms, it is more
structured (Alim et al., 2022; Costa et al., 2018). It is a cognitive process, identifies an opportunity
and can significantly generate profits, growth, or competitive positioning; consequently, leading to
innovation (Kim et al., 2018). In the addition to opportunity recognition, the literature mentions
team innovation capability as a strategic issue, as a team characteristic is the ability of an
organization to introduce and implement new products, and processes to the market
(Kanchanabha & Badir, 2021). This relationship between ICT and RO is supported by the resource-
based vision theory, as by fostering innovative capabilities, teams can optimize their abilities to
recognize and leverage entrepreneurial opportunities (Battistella et al., 2017). Likewise, acquiring
new entrepreneurial competencies to acquire and integrate new knowledge into the organization
(Weber & Heidenreich, 2018). Based on this discussion, the following hypothesis was proposed.

H6: Team innovation capacity has a positive and significant impact on the recognition of
opportunities.

2.8. The mediating role of team innovation capacity in the relation to innovative behavior
and recognition of opportunities
Innovation capacity is of interest to researchers considering its influence on the performance
outcomes and quality improvement of an innovative organization (Kumar et al., 2022). Likewise,
the innovative capability is related to the skills and knowledge required to properly incorporate
existing technologies and create new ones (Romijn & Albaladejo, 2002). Consequently, the
research considers that new products in the market are related to innovative behavior (Wang &
Ahmed, 2004). The mediating effect of team innovativeness on the relationship between innova­
tive behavior and opportunity recognition is supported by the resource-based view RBV theory
which states that firms with valuable, scarce, inimitable, and irreplaceable resources are signifi­
cantly better able to recognize and act on innovation opportunities (Ciampi et al., 2020), generat­
ing a competitive advantage in the textile industry. The success of companies in competitive and
complex environments can be enhanced by investing in team-based innovation resources and
capabilities (Slater et al., 2014). Hence, the following hypothesis was proposed:

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Figure 1. Research framework.

H7: Team innovation capacity mediates the relationship between innovative behavior and recog­
nition of opportunities.

The literature overview allowed us to elaborate the research model as follows (Figure 1):

3. Research methodology
The research design was cross-sectional, and a cluster stratified probability sampling method was
used. Data were collected from November 2022 to February 2023. The research team visited
business owners and conducted all face-to-face sessions for data collection. The study targeted
the main business cluster, It concentrates the largest number of entrepreneurs in the country and
businesses in Latin America. The investigation was specifically in small and medium-sized enter­
prises (SMEs) with more than five years of operations in the textile sector in the Gamarra
Commercial Emporium (GCE) in the district of La Victoria in Metropolitan Lima in Peru. The
respondents were only the decision-makers, i.e., mostly the owners of the sampled companies.
All participants were informed about the objectives and scope of the research. They also signed
a consent form, certifying that participation was voluntary. It was indicated that the data will not
be used for commercial purposes and a special protocol for data collection was followed. The data
collected through the surveys was face-to-face and the data were collected using printed copies of
the survey. During the data collection period, 601 eligible responses were collected.

3.1. Participants
The average age of the participants was 37.62 years (SD = 9.68). Of the total number of partici­
pants, 72.2% were female and 27.8% were male. Regarding the level of education, 51.7% have
a secondary education, followed by technical level with 38.8% and university level with 8%.
Concerning previous experience in other entrepreneurship initiatives, 62.6% had a previous experi­
ence while 37.4% had no experience. as seen in Table 1.

4. Measures
This empirical study were based on the innovative behavior scale (IB), we used the six items
proposed by Scott & Bruce (1994). The recognition of entrepreneurial opportunities (RO) was
measured through three items derived from Ozgen and Baron (2007) which measures the self-
perceived alertness in recognizing opportunities. Team entrepreneurial passion (TEP) was assessed
using 13 items (Cardon et al., 2013). Lastly, the team innovation capacity (TIC) by three items
(Subramaniam & Youndt, 2005) which focuses on team based incremental innovation capabilities.
A Likert scale was used for measuring all items with five points ranging from 1 (strongly disagree)
to 5 (strongly agree) and included 25 questions.

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Table 1. Sample characteristics

Sociodemographic Characteristic Frequency (f) Percentage (%)
Data
Gender Female 434 72.21
Male 167 27.79
Total 601 100.00
Age 21 to 30 years 170 28.28
31 to 40 years 241 40.10
41 to 50 years 136 22.63
51 to 60 years 39 6.49
More than 61 years 15 2.50
Total 601 100.00
Educational level Elementary level 9 1.50
Secondary level 311 51.74
Technical level 233 38.76
University level 48 8.00
Total 601 100.00
Previous experience with Si 376 62.56
other entrepreneurial
no 225 37.44
ventures
Total 601 100.00
Years of business 5 to 10 years 423 70.38
operation
11 to 15 years 91 15.14
15 to 20 years 61 10.15
More than 20 years 26 4.33
Total 601 100.00
Number of employees 1 to 10 employees 499 83.03
under your responsibility
11 to 20 employees 61 10.15
21 to 50 employees 30 4.99
More than 50 employees 11 1.83
Total 601 100.00

5. Data analysis
Smart-PLS 4 was utilized for the analysis of data. PLS-SEM requires two steps: measurement and
structural model assessment (Ringle et al., 2019). The specifications measurement model selects
constructs that have a high indicator load, convergence, compound reliability (CR), and discrimi­
nant validity. The path coefficient magnitude and amplitude are examined by the bootstrap
evaluation of the structural model. Preacher and Hayes (2008) propose the most comprehensive
method for evaluating mediation, which is best suited to PLS-SEM (Hair et al., 2014).

In addition to the investigation of outer loadings, Cronbach’s alpha and composite reliability
were used to assess the dependability of the construct. All of the study’s constructs demonstrated
acceptable reliability above the 0.70 thresholds, according to the investigation’s findings. In
addition to measuring concept reliability, AVE is used to assess convergent validity. The results
demonstrate acceptable convergent validity because the AVE was greater than 0.500. Table 3
displays the dependability and validity of the model.

The discriminant validity was determined by comparing the correlations among the latent
variables to the square root of AVE (Fornell & Larcker, 1981)

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6. Results

6.1. Measurement model assessment

PLS-SEM analysis begins with the evaluation of the measurement model, which ensures construct
reliability, convergent validity, and discriminant validity. Initially, the factor loadings were eval­
uated. Although factor loadings greater than 0.70 are preferred, social science researchers
typically obtain peripheral loadings of less than 0.70. Despite eliminating indicators immediately,
it is necessary to analyze the effects of the item’s removal on the composite reliability, content,
and convergent validity. Items with outer loadings between 0.40 and 0.70 shall only be removed
if deletion increases composite reliability or extracted average variance (AVE) above the desig­
nated range (Hair et al., 2019). The factor loading of the measurement model is shown in
Figure 2.

In addition to the investigation of outer loadings, Cronbach’s alpha and composite reliability
were used to assess the dependability of the construct. All of the study’s constructs demonstrated
acceptable reliability above the 0.70 thresholds, according to the investigation’s findings. In
addition to measuring concept reliability, AVE is used to assess convergent validity. The results
demonstrate acceptable convergent validity because the AVE was greater than 0.500. Table 2
displays the dependability and validity of the model.

The discriminant validity was determined by comparing the correlations among the latent
variables to the square root of AVE (Fornell & Larcker, 1981) The discriminant validity is therefore
demonstrated. The discriminant validity results are shown in Table 3.

7. Significance in the prediction of the constructs

7.1. Structural model

Next, the structural model is assessed to substantiate the proposed relationships, The structural
model reflects the paths hypothesized in the research framework.

Figure 2. Measurement model

analysis.

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Table 2. Assessment of the measurement model through reliability and validity

Construct Item Outer Cronbach’s Composite Average
loadings alpha reliability variance
(rho_c) extracted
(AVE)
Team TIC1 0.864 0.807 0.886 0.721
Innovation
TIC2 0.845
Capacity
TIC3 0.838
Innovative IB1 0.735 0.888 0.915 0.641
Behavior
IB2 0.801
IB3 0.822
IB4 0.831
IB5 0.814
IB6 0.799
Team TEP10 0.766 0.848 0.888 0.569
Entrepreneurial
TEP11 0.777
Passion
TEP12 0.755
TEP13 0.762
TEP8 0.713
TEP9 0.751
Recognition of RO1 0.793 0.760 0.862 0.676
Opportunities
RO2 0.833
RO3 0.839

Table 3. Fornell-Larcker criterion

TIC IB EP RO
TIC 0.849
IB 0.618 0.801
EP 0.576 0.727 0.754
RO 0.759 0.647 0.619 0.822

Assessing R2, the results reveal that a 52.9% change in team entrepreneurial passion can be
accounted for by innovative behavior. 38.2% change in team innovation capacity can be accounted
for innovative behavior. 63.9 % change in recognition of opportunities can be accounted to team
entrepreneurial passion and team innovation capacity. Further, Q2 establishes the predictive
relevance of the endogenous constructs. A Q2 above 0 shows that the model has predictive
relevance. The results show that there is significance in the prediction of the constructs, as
shown in Table 4.

H1 evaluates whether innovative behavior has a positive and significant impact on the recogni­
tion of opportunities. The results revealed that innovative behavior has a positive and significant
impact on the recognition of opportunities (β = 0.187, t = 4.050, p = 0.000). Hence, H1 was sup­
ported. H2 evaluates whether innovative behavior has a positive and significant impact on team
entrepreneurial passion. The results revealed that innovative behavior has a positive and signifi­
cant impact on team entrepreneurial passion (β = 0.727, t = 25.539, p = 0.000). Hence, H2 was
supported. H3 evaluates whether team entrepreneurial passion has a positive and significant
impact on the recognition of opportunities. The results revealed that team entrepreneurial passion
has a positive and significant impact on the recognition of opportunities (β = 0.168, t = 4.110, p =

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Table 4. Path coefficients and bootstrapping results

β ST T statistics P values
IB -> RO (H1) 0.187 0.046 4.050 0.000
IB-> TEP (H2) 0.727 0.028 25.539 0.000
TEP -> RO (H3) 0.168 0.041 4.110 0.000
IB -> TIC (H5) 0.618 0.036 17.084 0.000
TIC -> RO (H6) 0.546 0.034 16.027 0.000
Q2 predict
TIC 0.379
EP 0.526
RO 0.416

0.000). Hence, H3 was supported. H5 evaluates whether innovative behavior has a positive and
significant impact on team innovation capacity The results revealed that innovative behavior has
a positive and significant impact on team innovation capacity (β = 0.618, t = 17.084, p = 0.000).
Hence, H5 was supported. H6 evaluates whether team innovation capacity has a positive and
significant impact on the recognition of opportunities. The results revealed that team innovation
capacity has a positive and significant impact on the recognition of opportunities (β = 0.546, t =
16.027, p = 0.000). Hence, H6 was supported.

7.2. Mediation analysis

Mediation analysis was performed to assess the mediating role of TEP and TIC in the relationship
between innovative behavior and recognition of opportunities. H4 evaluates if team entrepreneur­
ial passion mediates the relationship between innovative behavior and recognition of opportu­
nities. TEP was found to have a significant and complementary mediating role in the relationship
between IB and RO (β = 0.122, t = 3.975, p = 0.000). Hence H4 was supported. H7 evaluates if TIC
mediates the relationship between innovative behavior and recognition of opportunities. TEP was
found to have a significant and complementary mediating role in the relationship between
innovative behavior and recognition of opportunities (β = 0.338, t = 12.499, p = 0.000). Hence H7
was supported. See Table 5. Mediation analysis. See Table 5.

8. Discussion
The findings demonstrated a positive and significant direct impact of innovative behavior on
opportunity recognition (H1). These results align with previous research by Friedman and
Ormiston (2022) and Flamini et al. (2022), which also observed a similar positive and significant
relationship between innovative behavior and opportunity recognition. The outcomes further
support the opportunity recognition theory, emphasizing that entrepreneurs’ innovativeness arises
from their ability to identify and act on market opportunities (Anwar et al., 2022). This capacity to
perceive opportunities often results from a combination of personal attributes and external
factors, such as market conditions, technological advancements, and societal trends (Singh
et al., 2022).

The study found that innovative behavior has a positive and significant impact on team entre­
preneurial passion (H2). The results complemented the existing research that has found a positive
and significant impact of innovative behavior on team entrepreneurial passion (Adomako & Ahsan,
2022). The results support the resource-based view theory, according to the resource-based view
theory, innovative behavior is an essential resource that can boost team entrepreneurial passion
(Li et al., 2022). By cultivating innovative capabilities, teams can become better equipped to
recognize and capitalize on entrepreneurial opportunities, which can in turn fuel their passion for
entrepreneurship (Battistella et al., 2017). Innovative behavior can help a team find and take
advantage of entrepreneurial opportunities, which can make the innovative capacity

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 Table 5. Mediation analysis
Total Effect β T statistics P values Direct β T statistics P values Hypotheses β SD T statistics P values
https://doi.org/10.1080/23311975.2023.2259580

Effect
IB-> RO 0.647 17.698 0.000 IB-> RO 0.187 4.050 0.000 IB -> TEP -> 0.122 0.031 3.975 0.000
RO (H4)
IB -> TIC -> 0.338 0.027 12.499 0.000
RO (H7)
Romani-Torres & Norena-Chavez, Cogent Business & Management (2023), 10: 2259580

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a differentiating element (Gundry et al., 2014). When teams do things that are new and different,
they may be more likely to find new opportunities that they are excited about. Also, being able to
successfully innovate can boost the confidence and motivation of a team, which can lead to
a greater passion for entrepreneurship (González-González & García-Almeida, 2021).

The study revealed a positive and significant impact of team entrepreneurial passion on oppor­
tunity recognition (H3). These findings align with prior research by Costa et al. (2018), which also
observed a similar positive and significant relationship between team entrepreneurial passion and
opportunity recognition. The results lend support to the resource-based view theory, suggesting
that a team’s entrepreneurial passion is interdependent and can facilitate the identification of
opportunities (Alfoqahaa, 2018). Successful identification and exploitation of entrepreneurial
opportunities are more likely to occur when passionate and innovative teams possess specialized
knowledge, skills, and networks (Liao et al., 2022). Team entrepreneurial passion strongly influ­
ences the recognition of opportunities, as passionate teams tend to be more motivated and
proactive in seeking new opportunities (Fu et al., 2022). Furthermore, such passion-driven teams
exhibit increased self-assurance and originality, enhancing their ability to recognize and pursue
entrepreneurial opportunities (Norena-Chavez & Guevara, 2020).

It is also found that innovative behavior has a positive and significant impact on team innova­
tion capacity (H5). The results complemented the existing research that has found a positive and
significant impact of innovative behavior on the recognition of team innovation capacity
(Mehmood et al., 2022). The results support the resource-based view theory, the capabilities and
resources of a team can also enhance its innovative capacity (Lopez-Vega & Lakemond, 2022).
Innovative solutions to complex problems are more likely to be developed by teams with specia­
lized knowledge, skills, and experience (Mitchell & Boyle, 2021). Similarly, teams with robust net­
works and relationships may have access to external resources and information that can boost
their innovation capacity (Lin et al., 2022).

Besides, team innovation capacity has a positive and significant impact on the recognition of
opportunities (H6). The results complemented the existing research that has found a positive and
significant impact of team innovation capacity on the recognition of opportunities (Montreuil et al.,
2020). The results support the resource-based view theory, the team innovation capacity is
a significant factor in the identification of opportunities (Kleinschmidt et al., 2007). When teams
have a high capacity for innovation, they are better equipped to identify and develop new ideas
and solutions that can be used to address market needs and consumer preferences (Lüthje &
Herstatt, 2004). This can improve the team’s capacity to identify entrepreneurial opportunities and
create new business models and strategies.

Next, the mediating analysis results are discussed. The results show a positive and significant
indirect effect of innovative behavior on the recognition of opportunities through team entrepre­
neurial passion (H4). This shows that innovative behavior can be a significant influence on how
team entrepreneurial passion can improve recognition of opportunities in the textile industry
(Magenda et al., 2021). The results are in line with the resource-based view, RBV theory asserts
that firms with valuable, uncommon, inimitable, and non-replaceable resources are better
equipped to recognize and act on opportunities for innovation (Ciampi et al., 2020). Team innova­
tion capacity was found to have a significant mediating role in the relationship between innovative
behavior and recognition of opportunities in textile companies (H7). This shows that innovative
behavior can be a significant influence on how team innovation capacity can improve the recogni­
tion of opportunities (Kim et al., 2018). The results are in line with the resource-based view, the RBV
theory suggests that firms with a strong team innovation capacity are better equipped to identify
and act on opportunities for innovation (Bojica et al., 2017), which can result in a competitive
advantage in the textile industry. Firms can position themselves for success in an increasingly
competitive market by investing in resources and capabilities that enhance innovative behavior
and team innovation capacity (Slater et al., 2014).

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9. Limitations and strengths

Some limitations that are worth addressing. First, this study utilizes a cross-sectional design, the
data collected can only represent a single instant in time and cannot accurately document
dynamic changes. In this approach, longitudinal data collection research could be considered
further to demonstrate cause and dynamic impact mechanisms. Second, this study has evaluated
Peru. Future research should incorporate different countries and sectors. Third, future studies can
investigate additional mediating variables, such as intellectual capital, knowledge management
systems, and innovative team behavior. Finally, future research may evaluate additional moderat­
ing variables, such as entrepreneurial leadership and project success.

Despite its limitations, this study has strengths that must be emphasized. First, this article extended
the existing literature by analyzing the relationship between team innovation capacity, innovative
behavior, team entrepreneurial passion, and recognition of opportunities. Second, the study high­
lights the importance of team outcomes, such as team entrepreneurial passion and team innovation
capacity to improve the recognition of opportunities. Finally, it used an extensive entrepreneur’s
textile sample; and fourth, the scales used to collect the data underwent psychometric validation.

10. Theoretical implications

The paper is effective in providing a relevant paper on innovative behavior and entrepreneurial
passion to address concerns in recognizing opportunities. Furthermore, this paper supports the
resource-based vision theory that innovative behavior is a main element that can promote
entrepreneurial passion in teams (Li et al., 2022). Also, it supports the opportunity recognition
theory, as through a mix of innovative behaviors combining personal traits, external factors,
entrepreneurs identify opportunities in the market and focus on acting on these opportunities
and trends (Anwar et al., 2022; Singh et al., 2022).

11. Implications for practice

This research can serve as a basis for policies, plans for public and private organizations on
engaging innovative behavior at work, entrepreneurial passion in teams, generating competitive
advantage. Likewise, SME´s owners who often depend on low prices to survive and grow, should
explore innovative behavior to foster entrepreneurial team passion for opportunity recognition. To
foster entrepreneurial development governments should offer entrepreneurial training classes that
team results and innovation results, as well as classes that encourage employees to recognize and
pursue an environment of innovation to enhance opportunity recognition.

12. Conclusions
This article this article contributes to the existing literature on innovative behavior and its impact on
opportunity recognition. By drawing on opportunity recognition theory and resource-based view
theory, this study employs a serial mediation model to investigate the mechanisms through which
innovative behavior leads to the recognition of opportunities. This research is significant for several
reasons. Firstly, it fills a gap in the literature by examining the mediating effects of team entrepre­
neurial passion and team innovation capacity in the relationship between innovative behavior and
opportunity recognition, which has not been explored in previous studies. Secondly, the analysis of
team entrepreneurial passion and team innovation capacity as mechanisms to enhance positive
team outcomes is highly relevant in the context of the work environment (Zhu et al., 2022). This
research contributes to a better understanding of how innovative behavior can positively influence
the recognition of opportunities by fostering team outcomes such as team entrepreneurial passion
and team innovation capacity. By shedding light on these mechanisms, this study provides valuable
insights for organizations and practitioners seeking to promote innovation and seize opportunities for
growth and success. Future research can build upon these findings by exploring additional factors and
contexts that may influence the relationship between innovative behavior and opportunity recogni­
tion, further enriching our understanding of this important phenomenon.

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Author details creativity self-efficacy. European Journal of

Rocio Romani-Torres1,2 Innovation Management, 25(1), 1–18. https://doi.org/
E-mail: rromani@pucp.pe 10.1108/EJIM-07-2020-0281
ORCID ID: http://orcid.org/0000-0001-6562-2343 Bagheri, A., Newman, A., & Eva, N. (2022). Entrepreneurial
Diego Norena-Chavez1,2,3 leadership of CEOs and employees’ innovative beha­
ORCID ID: http://orcid.org/0000-0001-5292-2152 vior in high-technology new ventures. Journal of
1
CENTRUM Catolica Graduate Business School, Lima, Peru. Small Business Management, 60(4), 805–827. https://
2
Pontificia Universidad Catolica del Peru, Lima, Peru. doi.org/10.1080/00472778.2020.1737094
3
Escuela de posgrado Universidad de Lima, Lima 70001, Baron, R. A., & Ensley, M. D. (2006). Opportunity recogni­
Peru. tion as the detection of meaningful patterns:
Evidence from comparisons of novice and experi­
Disclosure statement enced entrepreneurs. Management Science, 52(9),
No potential conflict of interest was reported by the 1331–1344. https://doi.org/10.1287/mnsc.1060.0538
author(s). Battistella, C., De Toni, A. F., De Zan, G., & Pessot, E.
(2017). Cultivating business model agility through
Citation information focused capabilities: A multiple case study. Journal of
Cite this article as: Fueling recognition of opportunities Business Research, 73, 65–82. https://doi.org/10.
through innovative behavior: Mediating role of team 1016/j.jbusres.2016.12.007
entrepreneurial passion and team innovation capacity, Bojica, A. M., Fuentes-Fuentes, M. D. M., & Pérez, V. F.
Rocio Romani-Torres & Diego Norena-Chavez, Cogent (2017). Corporate entrepreneurship and codification
Business & Management (2023), 10: 2259580. of the knowledge acquired from strategic partners in
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