Innovation Embedded in Entrepreneurs' Social Networks and Social Value “Trust”: A Multilevel Analysis for the MENA Countries

Innovation is a social phenomenon.  It is determined as interaction processes and exchanges knowledges between a large diversity of social actors. Social networks around entrepreneurs will enable them to access more resources (knowledges, ideas..) which may foster their innovativeness. Studies show that entrepreneurs oriented on innovation create high-performance firms, which in turn provide economic growth, employment, and significant improvements on the overall well-being of people’s live. Thus, through innovation entrepreneurs can do untold good for society. In this paper, we argue that sociological factors are important for explaining for the differences of innovation’s level among entrepreneurs. We are interested to examine the effect of social networks on innovation among entrepreneurs in MENA countries. In addition, we try to test the effect of national values, trust, as a main factor on innovation, and as a moderating factor between social networks and entrepreneur’s innovative behavior. We use the Global Entrepreneurship Monitor (GEM) individual level data for 14 MENA countries from 2009 to 2014 (13.599 observations), merged with national-level data on trust from World Values Survey (WVS). Our findings show that social networks affect positively entrepreneurs’ innovation. Public sphere networks have a positive impact on innovation, whereas the private sphere networks effect differently the innovation among entrepreneurs in MENA countries. National value “trust” has also a significant impact on innovation, in the way that trust encourages innovativeness among entrepreneurs in MENA countries. Furthermore, Trust moderates the social network effect on innovation.