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Bankruptcy laws, entrepreneurs’ socio-cognitions, and the pursuit of innovative opportunities

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  • Wenping Ye

    (Jinan University)

  • Zhongfeng Su

    (Xi’an Jiaotong University)

  • David Ahlstrom

    (Chinese University of Hong Kong)

Abstract

This study explores the effect of bankruptcy laws on the quality of entrepreneurship and the moderating role of an entrepreneur’s socio-cognitions in it. By adopting the pursuit of innovative opportunities to represent the quality of entrepreneurship, we find that stringent bankruptcy laws inhibit an entrepreneur from pursuing more innovative opportunities, and this effect is mitigated by the entrepreneur’s self-efficacy but does not vary with fear of failure. The findings help draw a more comprehensive picture of the linkage between bankruptcy laws and entrepreneurship and advance our knowledge on factors that influence the choice among different types of opportunity. Moreover, this study is one of the first attempts to combine insights of the institution-based view of entrepreneurship and the social cognitive theory.

Suggested Citation

  • Wenping Ye & Zhongfeng Su & David Ahlstrom, 2022. "Bankruptcy laws, entrepreneurs’ socio-cognitions, and the pursuit of innovative opportunities," Small Business Economics, Springer, vol. 59(3), pages 1005-1022, October.
    • Handle: RePEc:kap:sbusec:v:59:y:2022:i:3:d:10.1007_s11187-021-00563-9
    DOI: 10.1007/s11187-021-00563-9
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