The Influence of Transformational Leadership on Employee Innovation in Tech Startups: A Mixed-Methods Study

Abstract

This mixed-methods study examines how transformational leadership influences employee innovative behaviour within early-stage technology ventures. Drawing on transformational leadership theory and the job-demands-resources model, we surveyed 333 employees nested in 42 U.S. tech-startup teams across three time-points and conducted 18 follow-up semi-structured interviews. Hierarchical linear modelling and bootstrap mediation analyses revealed that transformational leadership positively predicts employee innovative behaviour (β = 0.284, p < 0.001). Psychological capital and thriving at work sequentially mediate this relationship (indirect effect β = 0.0324, 95 % CI [0.0095, 0.0582]). Qualitative findings corroborate that intellectual stimulation and individualized consideration foster psychological safety and experimentation norms. The study extends leadership theory to resource-scarce startup contexts and provides actionable guidance for founders and accelerators seeking to cultivate innovation.