Effect of the different forms of overconfidence on venture creation: Overestimation, overplacement and overprecision

2020 ◽  
pp. 1-14
Author(s):  
Zsófia Vörös
Keyword(s):  
New Venture ◽  
New Venture Creation ◽  
Venture Creation ◽  
Nascent Entrepreneurs ◽  
Global Entrepreneurship Monitor ◽  
Entrepreneurial Skills ◽  
Self Focusing ◽  
Single Construct ◽  
New Evidence ◽  
Monitor Data

Abstract This paper focuses on the effects of entrepreneurial overconfidence at new venture creation. By analyzing Global Entrepreneurship Monitor data and using the theory of planned behavior as a framework, the study provides new evidence on the relative or absolute nature of overconfidence in entrepreneurial skills and the effect of overprecision on new venture creation. Overprecision of supporting beliefs is newly linked to venture creation and it is shown that nascent entrepreneurs’ overconfidence is based on a self-focusing attitude. The results confirm that overconfidence is not a single construct and highlights the differences between the forms of overconfidence habitually confused in the entrepreneurship literature.

scholarly journals A ten-year cross-national examination of the dance between intuition and rationality in entrepreneurial processes

2021 ◽  
Author(s):  
C. Troise ◽  
D. Matricano ◽  
E. Candelo ◽  
L. Schjoedt
Keyword(s):  
Regression Analysis ◽  
New Venture ◽  
New Venture Creation ◽  
Venture Creation ◽  
Global Entrepreneurship Monitor ◽  
National Examination ◽  
Global Entrepreneurship ◽  
Monitor Data ◽  
Over Time ◽  
Cross National

AbstractEntrepreneurs rely, to a degree, on intuition while they also rely on rationality. Both are associated with formation of expectations for new venture creation as well as perseverance of efforts in managing the new venture and its creation. Global Entrepreneurship Monitor data from three distinct countries over a ten-year period are used in logistic regression analysis to find, not unexpectedly, that intuition and rationality vary in impact across countries and over time. While the findings confirm past findings, they also provide intriguing new insights into the dance between intuition and rationality in entrepreneurial processes.

scholarly journals An exploration of the Business Plan Competition as a methodology for effective nascent entrepreneurial learning

2018 ◽  
Vol 24 (1) ◽  
pp. 121-146 ◽  
Author(s):  
Kayleigh Watson ◽  
Pauric McGowan ◽  
James A. Cunningham
Keyword(s):  
Learning Outcomes ◽  
Business Plan ◽  
New Venture ◽  
Critical Examination ◽  
New Venture Creation ◽  
Venture Creation ◽  
Nascent Entrepreneurs ◽  
Entrepreneurial Learning ◽  
Content Type ◽  
Nascent Entrepreneur

Purpose Business Plan Competitions (BPCs) are readily prescribed and promoted as a valuable entrepreneurial learning activity on university campuses worldwide. There is an acceptance of their value despite the clear lack of empirical attention on the learning experience of nascent entrepreneurs during and post-participation in university-based BPCs. To address this deficit, the purpose of this paper is to explore how participation in a university-based BPC affords entrepreneurial learning outcomes, through the development of competencies, amongst nascent entrepreneurs. Design/methodology/approach Underpinned by a constructivist paradigm, a longitudinal qualitative methodological approach was adopted. In-depth interviews with nascent entrepreneur participants of a UK university-based BPC were undertaken at the start and end of the competition but also six months after participation. This method enabled access to the participant’s experiences of the competition and appreciation of the meanings they attached to this experience as a source of entrepreneurial learning. Data were analysed according to the wave of data collection and a thematic analytical approach was taken to identify patterns across participant accounts. Findings At the start of the competition, participation was viewed as a valuable experiential learning opportunity in pursuit of the competencies needed, but not yet held, to progress implementation of the nascent venture. At the end of the competition, participants considered their participation experience had afforded the development of pitching, public speaking, networking and business plan production competencies and also self-confidence. Six months post-competition, participants still recognised that competencies had been developed; however, application of these were deemed as being confined to participation in other competitions rather than the routine day-to-day aspects of venture implementation. Developed competencies and learning remained useful given a prevailing view that further competition participation represented an important activity which would enable value to be leveraged in terms of finance, marketing and networking opportunities for new venture creation. Research limitations/implications The findings challenge the common understanding that the BPC represents an effective methodology for highly authentic, relevant and broadly applicable entrepreneurial learning. Moreover the idea that the competencies needed for routine venture implementation and competencies developed through competition are synonymous is challenged. By extension the study suggests competition activities may not be as closely tied to the realities of new venture creation as commonly portrayed or understood and that the learning afforded is situated within a competition context. Competitions could therefore be preventing the opportunities for entrepreneurial learning that they purport they offer. Given the practical importance of competition participation as a resource acquisition activity for nascent entrepreneurs, further critical examination of the competition agenda is necessary as too is additional consideration about the design of such competitions and how such competitions should feature within university policy to support new venture creation. Originality/value This study contributes to the limited literature and studies on BPCs by focussing on its effectiveness as a means of providing entrepreneurial learning for participants. The key contribution taking it from an individual nascent entrepreneur participant perspective is that the competencies afforded through competition participation are more limited in scope and application than traditionally promoted and largely orientated towards future BPC participation. Learning is mainly situated for competition sake only and about participants securing further resources and higher levels of visibility. As the nascent entrepreneurs intended learning outcomes from competition participation are subsequently not realised, the study highlights a gap between the intended and actual outcomes of competition participation.

Much More Than Meets the Eye

2021 ◽  
pp. 61-91
Author(s):  
Alexandra França ◽  
Silja Frankenbach ◽  
Vanda Vereb ◽  
Alexandra Vilares ◽  
António Carrizo Moreira
Keyword(s):  
Personal Characteristics ◽  
Individual Characteristics ◽  
New Venture ◽  
New Venture Creation ◽  
Venture Creation ◽  
Nascent Entrepreneurs ◽  
Sociological Perspective ◽  
Nascent Entrepreneurship ◽  
Creation Process ◽  
The Way

Nascent entrepreneurship plays an important role in the study of entrepreneurship. It has been studied from different angles, especially from the psychological and sociological perspective as nascent entrepreneurs have distinctive traits and competencies. Other important foci of research are the investigation of the environment in which nascent entrepreneurs operate, as well as the way both the identification and exploitation of entrepreneurial opportunities have emerged. The main objective of this chapter is to address (1) the main individual characteristics that entrepreneurs have in common; (2) the environmental factors contributing to new venture creation; and (3) the steps in the creation process. The chapter departs from the fundamental process of nascent entrepreneurship, which is centered on opportunity recognition, evaluation, and exploitation, and is complemented by the way how contextual factors and personal characteristics and competencies influence the new venture creation process.

scholarly journals Contesting effectuation theory: Why it does not explain new venture creation

2020 ◽  
Vol 38 (6) ◽  
pp. 515-535 ◽  
Author(s):  
John Kitching ◽  
Julia Rouse
Keyword(s):  
Decision Making ◽  
Cognitive Science ◽  
Causal Explanation ◽  
New Venture ◽  
New Venture Creation ◽  
Causal Powers ◽  
Venture Creation ◽  
Nascent Entrepreneurs ◽  
Cultural Contexts ◽  
Social Structural

We evaluate whether the theory of effectuation provides – or could provide – a powerful causal explanation of the process of new venture creation. We do this by conducting an analysis of the principal concepts introduced by effectuation theory. Effectuation theory has become a highly influential cognitive science-based approach to understanding how nascent entrepreneurs start businesses under conditions of uncertainty. But by reducing the process of venture creation to a decision-making logic, effectuation theory pays insufficient regard to the substantial, pervasive and enduring influence of social-structural and cultural contexts on venture creation. Powerful explanations should conceive of venture creation as a sociohistorical process emergent from the interaction of structural, cultural and agential causal powers and must be able to theorise, fallibly, how nascent entrepreneurs form particular firms in particular times and places. We conclude that effectuation’s contribution to entrepreneurship scholarship is more limited than its advocates claim because it can offer only an under-socialised, ahistorical account of venture creation. Failure to theorise adequately the influence of structural and cultural contexts on venture creation implicitly grants nascent entrepreneurs excessive powers of agency.

scholarly journals Entrepreneurial Self–Efficacy: Refining the Measure

2009 ◽  
Vol 33 (4) ◽  
pp. 965-988 ◽  
Author(s):  
Jeffrey E. McGee ◽  
Mark Peterson ◽  
Stephen L. Mueller ◽  
Jennifer M. Sequeira
Keyword(s):  
Self Efficacy ◽  
Explanatory Variable ◽  
New Venture ◽  
New Venture Creation ◽  
Venture Creation ◽  
Nascent Entrepreneurs ◽  
Process Framework ◽  
Entrepreneurship Theory ◽  
And Behavior ◽  
Broad Consensus

A growing number of studies on entrepreneurial motivation, intentions, and behavior include entrepreneurial self–efficacy (ESE) as an explanatory variable. While there is broad consensus among researchers on the importance of including ESE in an intentionality model, there remain inconsistencies in the definition, dimensionality, and measurement of ESE. This study takes an important step toward refinement and standardization of ESE measurement. Within a new venture creation process framework, a multi–dimensional ESE instrument is developed and tested on a diverse sample that includes nascent entrepreneurs. Implications for entrepreneurship theory and entrepreneurship education are discussed.

The Challenging Dynamics of Nascent Entrepreneurship

2018 ◽  
pp. 1-28 ◽  
Author(s):  
Alexandra França ◽  
Alexandra Vilares ◽  
Silja Frankenbach ◽  
Vanda Vereb ◽  
António C. Moreira
Keyword(s):  
Personal Characteristics ◽  
Individual Characteristics ◽  
New Venture ◽  
New Venture Creation ◽  
Venture Creation ◽  
Nascent Entrepreneurs ◽  
Central Process ◽  
Nascent Entrepreneurship ◽  
Creation Process ◽  
The Individual

Nascent entrepreneurship has long been studied from a variety of perspectives. A major stream of work by psychologists and sociologists suggests that nascent entrepreneurs have distinctive traits and competences. A second focus for research has been studying the environment in which nascent entrepreneurs operates. Recently, the identification and exploitation of entrepreneurial opportunities has emerged as a third focus. In this paper we will address the following questions: (1) what are the individual characteristics of those individuals who are attracted to becoming an entrepreneur? (2) What are the environmental factors contributing to new venture creation? (3) What are the steps in the creation process? We will attempt to answer these three questions by arguing that the central process of nascent entrepreneurship is centred on opportunity recognition, evaluation and exploitation, and influenced by contextual factors (e.g. external knowledge) and personal characteristics and competences (e.g. internal knowledge).

Community Social Capital and the Venture Gestation Process

2019 ◽  
pp. 175-200
Author(s):  
Siddharth Vedula ◽  
Casey J. Frid
Keyword(s):  
Social Capital ◽  
Research Agenda ◽  
New Venture ◽  
Entrepreneurial Activity ◽  
New Venture Creation ◽  
Venture Creation ◽  
Nascent Entrepreneurs ◽  
Nascent Entrepreneurship ◽  
Growing Body ◽  
Future Work

Community social capital is increasingly recognized as an important regional resource for spurring entrepreneurial activity. A nascent but growing body of work has begun to link community social capital to entrepreneurship, focusing largely on outcomes such as rates of new venture creation. This chapter emphasizes ways in which community social capital can impact nascent entrepreneurship—namely, the activities founders undertake during the gestation phase before a new venture is created. It examines whether the types of activities undertaken by nascent entrepreneurs vary according to the prevalence (or absence) of community social capital within a region, and concludes with a research agenda for future work in this domain.

Going on or going home? The impact of new venture creation progress on work-to-family conflict

2019 ◽  
Vol 58 (6) ◽  
pp. 1210-1236
Author(s):  
Yu Zhou ◽  
Wenwen Zhao ◽  
Xueqing Fan
Keyword(s):  
Family Involvement ◽  
Family Conflict ◽  
Prior Experience ◽  
New Venture ◽  
New Venture Creation ◽  
Venture Creation ◽  
Nascent Entrepreneurs ◽  
Content Type ◽  
Role Behavior ◽  
Behavior Strategy

Purpose The purpose of this paper is to examine whether, how and when new venture creation progress (NVCP) affects work-to-family conflict (WFC) by introducing coping behavior strategies as mediators, entrepreneurs’ prior experience and family involvement in business as moderators. Design/methodology/approach This study performs multivariate regression analysis based on a sample of 260 nascent entrepreneurs from the Chinese Panel Study of Entrepreneurial Dynamics. Findings This study reveals that an entrepreneur’s WFC tends to increase along with the growth of the new venture. Specifically, NVCP impels entrepreneurs to adopt reactive role behavior strategy and meet both entrepreneurial and family demands; meanwhile, NVCP propels entrepreneurs to adopt prioritizing entrepreneurship behavior strategy for the increasing work demands, thus leading to more WFC; the mediation effect of prioritizing entrepreneurship behaviors is stronger than that of reactive role behaviors, which leads to an overall positive main effect. Moreover, the preceding mediating paths are moderated by entrepreneurs’ prior experience and family involvement. Research limitations/implications First, the authors have investigated how NVCP influenced WFC. However, the authors did not extend the research to the possible effect of WFC on entrepreneurial performance. Second, in the work-family-conflict literature, unmarried and those without children are often excluded since their private life demands differ significantly from parents’ demands. Although the authors control for marital status in the model, the number of children is still left uncontrolled. Furthermore, the authors only used the first two waves of data, leading to a potential selection bias. In addition, the Chinese context may have influenced the generalizability of the results in a complex manner. Practical implications This paper indicates that reactive role behavior strategy will decrease WFC, while prioritizing entrepreneurship behavior strategy will increase WFC. Therefore, the authors suggest entrepreneurs adopt more reactive strategy to reduce WFC. Besides, both prior experience and family involvement strengthen the relationship between NVCP and prioritizing entrepreneurship behavior strategy, thereby leading to more WFC. Therefore, entrepreneurs with prior experience and family involvement should pay more attention to their roles in family. Furthermore, entrepreneurs with family involvement can try to segment the entrepreneurship-family boundary psychologically. For example, entrepreneurs can avoid business talking with families but show concerns for them at rest time. Social implications WFC has been found negatively related to individual health and well-being. And entrepreneurs experienced even more WFC than employees in established organizations. Therefore, it is of great importance to focus on the topic of reducing entrepreneurs’ WFC. This research indicates that entrepreneurs can experience less WFC by choosing reactive role behavior strategy. Prior experience and family involvement can induce them to be more attached to new venture creation. This research provides practical suggestions and reminders for entrepreneurs. Originality/value This mediated moderation model elaborates whether, how and when NVCP affects WFC, thereby contributing to the knowledge of entrepreneurship-family interface and enlightening nascent entrepreneurs about balancing their start-up responsibilities with their family life.

scholarly journals Invigorating Entrepreneurial Spirit among Workforce

2013 ◽  
Vol 2 (5) ◽  
pp. 107-112
Author(s):  
Al Mutairi Aned O ◽  
Al Mutairi Alya O
Keyword(s):  
Organizational Climate ◽  
New Venture ◽  
New Venture Creation ◽  
Venture Creation ◽  
Management Support ◽  
Entrepreneurial Opportunities ◽  
Entrepreneurial Skills ◽  
Entrepreneurial Spirit ◽  
Personal Skills ◽  
Climate Management

With the key intent of stimulating entrepreneurial spirit among the workforce, this paper identifies the diverse entrepreneurial qualities required to propel the entrepreneurial spirit unremittingly. These relevant personal skills and strategies of New Venture Creation further aid in the successful creation and subsequent maintenance of an entrepreneur business. Prior to application of the identified skills, this paper vividly demonstrates the importance of such skills to any entrepreneurial business entity. This helps in New Venture Creation whilst aiding the businesses’ sustainability. Therefore, the through proper application of the knowledge attained as well as skills identified, the entrepreneur manages to depict dynamism by consistently exploring different entrepreneurial opportunities. Although these skills tremendously boost the entrepreneur’s spirit, they also create opportunities for the business to explore new and diverse opportunities thus circling back to enhancing entrepreneurial spirit. Furthermore, the paper seeks to make out the possible ways of constantly improving these entrepreneurial skills and in turn encouraging their adoption and consequent utilization among workforce. Further incorporation of knowledge attained from research projects on organizational climate, management support and reward and resource availability similarly focuses the paper to invigorating entrepreneurial spirit among workforce.

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