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Negative life events and entrepreneurship

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  • Awaworyi Churchill, Sefa
  • Smyth, Russell
  • Trinh, Trong-Anh

Abstract

We examine the impact of negative life events on the proclivity for entrepreneurship and whether a person’s locus of control (LoC) can help leverage opportunities arising from negative shocks to become entrepreneurial. We employ 19 waves of data from the Household Income Labour Dynamics Australia (HILDA) survey and focus on 10 different negative life events that occurred in the preceding 12 months. We find that each additional negative shock is associated with a 0.4 percentage point increase in the probability of being self-employed. However, when we separate out the 10 negative life events, there is only consistent evidence that two – major worsening in finances and being fired or made redundant – increase the propensity for entrepreneurship. We find weak evidence that being more internal in LoC provides a buffer against negative shocks. Our findings have important implications for developing policies that seek to address the impact of negative shocks.

Suggested Citation

  • Awaworyi Churchill, Sefa & Smyth, Russell & Trinh, Trong-Anh, 2023. "Negative life events and entrepreneurship," Journal of Business Research, Elsevier, vol. 155(PB).
    • Handle: RePEc:eee:jbrese:v:155:y:2023:i:pb:s0148296322009080
    DOI: 10.1016/j.jbusres.2022.113443
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    16. Awaworyi Churchill, Sefa & Smyth, Russell, 2022. "Locus of control and the mental health effects of local area crime," Social Science & Medicine, Elsevier, vol. 301(C).
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    Cited by:

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    3. Jiang, Yiqi, 2024. "Childhood financial difficulty and entrepreneurial intention: The roles of work-family conflict and openness to experience," Journal of Business Research, Elsevier, vol. 175(C).
    4. Awaworyi Churchill, Sefa & Munyanyi, Musharavati Ephraim & Trinh, Trong-Anh & Wiklund, Johan, 2024. "From disastrous heat waves to extreme rains: Effects of weather shocks on entrepreneurship," Journal of Business Venturing Insights, Elsevier, vol. 21(C).
    5. Hangyu Shi & Hongtao Yang, 2024. "Career Booster or Dead End? The Double-Edged Sword Effects of Entrepreneurial Fear of Failure on Entrepreneurial Exit Intentions in the Process of Sustainable Entrepreneurship," Sustainability, MDPI, vol. 16(20), pages 1-16, October.
    6. Arslan, Ahmad & Kamara, Samppa & Tian, Anna Yumiao & Rodgers, Peter & Kontkanen, Minnie, 2024. "Marketing agility in underdog entrepreneurship: A qualitative assessment in post-conflict Sub-Saharan African context," Journal of Business Research, Elsevier, vol. 173(C).
    7. Abd Hamid, Hamizah & Pidduck, Robert J. & Newman, Alexander & Ayob, Abu Hanifah & Sidek, Farhana, 2023. "Intercultural resource arbitrageurs: A review and extension of the literature on transnational entrepreneurs," Journal of Business Research, Elsevier, vol. 165(C).

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