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The effects of perceptions of risk, environmental uncertainty, and growth aspirations on new venture creation success

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  • William Gartner
  • Jianwen Liao

Abstract

This study extends Xu and Reuf (Strateg Organ 2:331–355, 2004) by exploring the strategic and non-strategic risk-taking propensity perceptions of nascent entrepreneurs as it relates to the subsequent likelihood of venture formation success. In addition, the moderating influences of perceptions of environmental uncertainty and venture growth aspirations are also examined. Findings from an analysis of data from the Panel Study of Entrepreneurial Dynamics (PSED) I indicate that an entrepreneur’s risk-taking propensity has no relationship to the likelihood of successfully starting a business. Perceptions of environmental uncertainty and venture growth aspirations were positively related to non-strategic risk-taking propensity, yet none of these variables (strategic and non-strategic risk-taking propensity, environmental uncertainty and growth aspirations) had a significant effect on venture creation success. We suggest that risk-taking propensity, as measured in this study, does not play a significant role in differentiating between nascent entrepreneurs or others, or between those that are successful or unsuccessful at starting businesses. Copyright Springer Science+Business Media, LLC. 2012

Suggested Citation

  • William Gartner & Jianwen Liao, 2012. "The effects of perceptions of risk, environmental uncertainty, and growth aspirations on new venture creation success," Small Business Economics, Springer, vol. 39(3), pages 703-712, October.
    • Handle: RePEc:kap:sbusec:v:39:y:2012:i:3:p:703-712
    DOI: 10.1007/s11187-011-9356-1
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    References listed on IDEAS

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    1. Johan Wiklund & Dean Shepherd, 2003. "Aspiring for, and Achieving Growth: The Moderating Role of Resources and Opportunities," Journal of Management Studies, Wiley Blackwell, vol. 40(8), pages 1919-1941, December.
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    5. Gatewood, Elizabeth J. & Shaver, Kelly G. & Gartner, William B., 1995. "A longitudinal study of cognitive factors influencing start-up behaviors and success at venture creation," Journal of Business Venturing, Elsevier, vol. 10(5), pages 371-391, September.
    6. Acs, Zoltan J., 2008. "Foundations of High Impact Entrepreneurship," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 4(6), pages 535-620, June.
    7. Brian Wu & Anne Marie Knott, 2006. "Entrepreneurial Risk and Market Entry," Management Science, INFORMS, vol. 52(9), pages 1315-1330, September.
    8. Jianwen Liao & William Gartner, 2006. "The Effects of Pre-venture Plan Timing and Perceived Environmental Uncertainty on the Persistence of Emerging Firms," Small Business Economics, Springer, vol. 27(1), pages 23-40, August.
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    Cited by:

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    2. Saul Estrin & Tomasz Mickiewicz & Anna Rebmann, 2017. "Prospect theory and the effects of bankruptcy laws on entrepreneurial aspirations," Small Business Economics, Springer, vol. 48(4), pages 977-997, April.
    3. Laurent Vilanova & Ivana Vitanova, 2020. "Unwrapping opportunity confidence: how do different types of feasibility beliefs affect venture emergence?," Small Business Economics, Springer, vol. 55(1), pages 215-236, June.
    4. Clarysse, Bart & Andries, Petra & Boone, Sarah & Roelandt, Jolien, 2023. "Institutional logics and founders' identity orientation: Why academic entrepreneurs aspire lower venture growth," Research Policy, Elsevier, vol. 52(3).
    5. Hong Yang & Brian Paul Cozzarin & Can Peng & Chun Xu, 2022. "Start‐ups and entrepreneurial teams," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(5), pages 1167-1184, July.
    6. Nadeem Khalid & Munwar Hussain Pahi & Sallam Bin Abdullah, 2016. "Investigating the Moderation of Organizational Culture on the Relationship between Innovativeness, Reactiveness, and Risk-Taking Propensity with Business Performance: A Case of Pakistan," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(10), pages 326-338, October.
    7. Mariano Puglisi & Vincenzo Fasone & Giulio Pedrini & Deborah Gervasi & Guglielmo Faldetta, 2022. "Using a dual system of reasoning in small businesses: Entrepreneurial decisions and subjective risk intelligence," International Entrepreneurship and Management Journal, Springer, vol. 18(2), pages 529-553, June.
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    9. Sufia Mohand-Amar & María del Mar Fuentes-Fuentes & Matilde Ruiz-Arroyo, 2024. "The relationship between high growth expectations and new venture creation in nascent entrepreneurs: The key role of competitive innovation," International Entrepreneurship and Management Journal, Springer, vol. 20(3), pages 2323-2345, September.
    10. McSweeney, Jordan J. & McSweeney, Kevin T. & Webb, Justin W. & Sandoval, Rosalyn G., 2022. "Passion drove me here: Exploring how types of entrepreneurial passion influence different entrepreneurial intentions," Journal of Business Venturing Insights, Elsevier, vol. 18(C).
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    More about this item

    Keywords

    Risk-taking propensity; Nascent entrepreneur; PSED; Start-up; D81; J24; L26; M13;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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