Endings and Visions of New Beginnings: The Effects of Source of Unemployment and Duration of Unemployment on Entrepreneurial Intent

Abstract

This study adopts the push-entrepreneurship perspective and develops a conceptual framework grounded in prospect theory, in order to investigate whether source of sunemployment, layoff in particular, and duration of unemployment stimulate entrepreneurial intent. We also propose that fear of failure and risk propensity moderate the source/duration-entrepreneurial intent relationships. We test our hypotheses using survey data from a sample of unemployed individuals. Results show that both layoff and duration of unemployment are stimuli for higher entrepreneurial intent, and the source of unemploymentintent relationship is moderated by fear of failure and risk propensity. We discuss the implications of these results. Abstract: This study adopts the push-entrepreneurship perspective and develops a conceptual framework grounded in prospect theory, in order to investigate whether source of sunemployment, layoff in particular, and duration of unemployment stimulate entrepreneurial intent. We also propose that fear of failure and risk propensity moderate the source/duration-entrepreneurial intent relationships. We test our hypotheses using survey data from a sample of unemployed individuals. Results show that both layoff and duration of unemployment are stimuli for higher entrepreneurial intent, and the source of unemployment-intent relationship is moderated by fear of failure and risk propensity. We discuss the implications of these results.

Fear and Entrepreneurship: A Review and Research Agenda

“…Wood et al . () report that fear of failure moderates the effects of situational cues such as layoff and duration of unemployment on entrepreneurial intentions. Mitchell and Shepherd () provide evidence that individuals' self‐esteem and their fear of failure exert distinct influences on the evaluation of opportunities.…”

A reconceptualization of fear of failure in entrepreneurship

“…Third, the purely psychological view of fear of failure in entrepreneurship is that fear of failure is a negative feeling that results from the anticipation of the possibility of failure and is associated with psychological and behavioral outcomes (e.g., Chua & Bedford, 2015;Li, 2011;Mitchell & Shepherd, 2010;2011;Welpe, et al, 2012;Wood & Pearson, 2009;Wood & Rowe, 2011;Wood et al, 2013Wood et al, , 2014. Interestingly, these studies differ in the measurement of fear of failure.…”

“…It is not clear, however, whether negative affect is an antecedent or outcome of a particular decision. Other scholars who adopt a purely psychological view of fear of failure (Mitchell & Shepherd, 2010;2011;Wood & Pearson, 2009;Wood & Rowe, 2011;Wood et al 2013Wood et al , 2014 employed the Performance Failure Appraisal Inventory (PFAI) by Conroy and colleagues (2002;2003). In the case of the PFAI, it is not clear whether the scale assesses the actual emotional experience or a predisposition to experience fear of failure.…”

“…Mitchell & Shepherd, 2010;2011;Wood & Pearson, 2009;Wood & Rowe, 2011;Wood et al, 2013;2014), even it is not a perfect fit for research in entrepreneurship. Indeed, a fundamental element of the experience of fear of failure in entrepreneurship is the notion that cognitive beliefs about the aversive consequences of failure are strongly influenced by the socially situated context.…”

Blessing in Disguise? Social and Institutional Determinants of Entrepreneurial Intentions following Involuntary Job Loss

“…Despite our improved understanding of self‐employment predictors, current research on the drivers of self‐employment as a career choice following involuntary job loss is under‐developed. Involuntary job loss, as a highly stressful, emotional and adverse life event, represents a unique context to study self‐employment intentions (Wood, McKinley, and Engstrom ; Wooten, Timmerman, and Folger ). Specifically, research on specific factors that predict self‐employment intentions following involuntary job loss is evolving (e.g., Laguna ; Wood, McKinley, and Engstrom ).…”