Feel dragged out: a recovery perspective in the relationship between emotional exhaustion and entrepreneurial exit

Purpose This study investigates the relationship between emotional exhaustion and entrepreneurial exit, particularly how this relationship might be invigorated by two critical psychological factors, namely cognitive well-being (CWB) and affective well-being (AWB). Design/methodology/approach Binary logistic regression analysis was employed on a longitudinal data set of 997 self-employed individuals taken from the German Socio-Economic Panel (GSOEP) during years 2012-2013. Findings Greater level of emotional exhaustion increases the likelihood of entrepreneurial exit. However, individuals with higher levels of affective or/and cognitive well-being are less likely to engage in the actual entrepreneurial exit behaviors. Practical implications Entrepreneurial exit is one of the crucial managerial decisions made by entrepreneurs. The decision to quit is not only triggered by poor firm performance but also by various psychological factors. The authors found subjective well-being as an essential mechanism promoting entrepreneurs' overall well-being, thus recommending that entrepreneurs psychologically distance themselves from work during off times. Originality/value First, the study discovered emotional exhaustion as a crucial psychological precursor of entrepreneurial exit by focusing on actual exit instances rather than intentions and strategies to exit. That contributes to understanding the psychological mechanism involved in resource gain and loss while making exit decisions. Second, affective and cognitive well-being are found to be two crucial enablers that work as a recovery process to deal with emotional exhaustion.