Does dispositional optimism affect entrepreneurial success? Evidence from Saudi Arabia

Abstract

This study explores the effect of dispositional optimism bias on entrepreneurial success. By reviewing a mixture of previous studies from different disciplines: psychology, business and economics, we predict that this bias can positively affect entrepreneurial success. Based on a sample of 255 entrepreneurs in the Kingdom of Saudi Arabia and using the LOT-R psychometric test to measure the level of dispositional optimism among entrepreneurs, the effect of this variable on entrepreneurial success was tested, and the results show that this bias positively affects entrepreneurial success. Entrepreneurial success was also measured through three different proxies: the level of entrepreneurs’ satisfaction with what has been achieved from their entrepreneurial projects, the variation in the number of employees, and sales growth and the results were stable. We also find that entrepreneurs’ experience, age, and gender can influence entrepreneurial success. Finally, we should view entrepreneurial success not only as a function of traditional variables but also as a function of psychological biases.