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Does it pay to be an ethical leader in entrepreneurship? An investigation of the relationships between entrepreneurs’ regulatory focus, ethical leadership, and small firm growth

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  • Alenka Slavec Gomezel

    (Ljubljana University)

  • Rok Stritar

    (Ljubljana University)

Abstract

In this research, we use regulatory focus theory and ethical leadership theory to explore the dispositional and behavioral mechanisms of individual entrepreneurs that contribute to small firm growth. While previous research has mainly investigated the outcomes of regulatory focus and ethical leadership in a managerial and subordinate setting, little attention has been paid to such relationships in an entrepreneurial setting in which entrepreneurs and their personalities impact small firms’ growth. The purpose of the study is to uncover whether promotion or prevention focus is related to entrepreneurs’ ethical leadership, and whether entrepreneurs’ self-evaluation of their ethical leadership style is associated with small firm growth. Drawing from a dataset of 166 entrepreneurs and applying SEM analysis, we found that promotion focus, rather than prevention focus, is positively related to ethical leadership and that ethical leadership is positively and significantly related to small firm growth. The study emphasizes that entrepreneurs’ ethical leadership can enhance small firm growth, and therefore it pays off for entrepreneurs to be ethical leaders.

Suggested Citation

  • Alenka Slavec Gomezel & Rok Stritar, 2023. "Does it pay to be an ethical leader in entrepreneurship? An investigation of the relationships between entrepreneurs’ regulatory focus, ethical leadership, and small firm growth," Review of Managerial Science, Springer, vol. 17(1), pages 155-173, January.
    • Handle: RePEc:spr:rvmgts:v:17:y:2023:i:1:d:10.1007_s11846-021-00512-6
    DOI: 10.1007/s11846-021-00512-6
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    References listed on IDEAS

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    Cited by:

    1. Mohammad Daradkeh, 2023. "Navigating the Complexity of Entrepreneurial Ethics: A Systematic Review and Future Research Agenda," Sustainability, MDPI, vol. 15(14), pages 1-30, July.
    2. Arménio Rego & Marcel Meyer & Dálcio Reis Júnior & Miguel Pina e Cunha, 2025. "Wise leaders fostering employees’ speaking up behaviors: developing and validating a measure of leader-expressed practical wisdom," Review of Managerial Science, Springer, vol. 19(1), pages 157-195, January.

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    More about this item

    Keywords

    Entrepreneur; Regulatory focus; Ethical leadership; Small firm growth;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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