When Does Community Support Spur or Suppress Nascent Venture Innovativeness?

Community support has been gaining traction in entrepreneurship research as nascent ventures, i..e, new and emerging businesses in the early stages of development, are increasingly viewed as embedded in local social environments. Yet we lack a clear understanding of how community support influences nascent ventures’ innovativeness and why it can both enable and constrain novelty. In this paper, drawing on Self-Categorization Theory, we hypothesize that community support functions as a categorization cue that shifts entrepreneurs’ identity salience between personal and collective identities, generating nonlinear effects on innovativeness. We further argue that government support moderates these processes by reducing reliance on community-based identity cues. To test these hypotheses, we construct a unique longitudinal, and multi-level data on nascent ventures by integrating multiple datasets. Our findings suggest a U-shaped relationship between community support and innovativeness—higher innovativeness at low and high levels of support and lower innovativeness at moderate levels. They also show that government support dampens this curvilinear effect. This study advances research on community by showing that its influence on nascent venture innovativeness is non-linear and identity-based rather than uniform and resource-based. Our findings also advance research on new venture innovativeness, extends Self-Categorization Theory to entrepreneurial ecosystems, and offers practical implications for designing community and policy support that fosters innovation without suppressing experimentation.