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Why are Optimistic Entrepreneurs Successful? An Application of the Regulatory Focus Theory

Author

Listed:
  • Ruta Aidis

    (UCL School of Slavonic and East European Studies)

  • Tomasz Marek Mickiewicz

    (UCL School of Slavonic and East European Studies)

  • Arnis Sauka

    (Stockholm School of Economics in Riga)

Abstract

Does entrepreneurial optimism affect business performance? Using a unique data set based on repeated survey design, we investigate this relationship empirically. Our measures of ‘optimism’ and ‘realism’ are derived from comparing the turnover growth expectations of 133 owners-managers with the actual outcomes one year later. Our results indicate that entrepreneurial optimists perform significantly better in terms of profits than pessimists. Moreover, it is the optimist-realist combination that performs best. We interpret our results using the regulatory focus theory.

Suggested Citation

  • Ruta Aidis & Tomasz Marek Mickiewicz & Arnis Sauka, 2008. "Why are Optimistic Entrepreneurs Successful? An Application of the Regulatory Focus Theory," UCL SSEES Economics and Business working paper series 85, UCL School of Slavonic and East European Studies (SSEES).
    • Handle: RePEc:see:wpaper:85
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    References listed on IDEAS

    as
    1. Stefano DellaVigna, 2009. "Psychology and Economics: Evidence from the Field," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 315-372, June.
    2. Delmar, Frederic & Davidsson, Per & Gartner, William B., 2003. "Arriving at the high-growth firm," Journal of Business Venturing, Elsevier, vol. 18(2), pages 189-216, March.
    3. Brockner, Joel & Higgins, E. Tory & Low, Murray B., 2004. "Regulatory focus theory and the entrepreneurial process," Journal of Business Venturing, Elsevier, vol. 19(2), pages 203-220, March.
    4. Brian Wu & Anne Marie Knott, 2006. "Entrepreneurial Risk and Market Entry," Management Science, INFORMS, vol. 52(9), pages 1315-1330, September.
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    Cited by:

    1. Lindblom, Arto & Lindblom, Taru & Wechtler, Heidi, 2020. "Dispositional optimism, entrepreneurial success and exit intentions: The mediating effects of life satisfaction," Journal of Business Research, Elsevier, vol. 120(C), pages 230-240.
    2. Estrin, Saul & Korosteleva, Julia & Mickiewicz, Tomasz, 2009. "Better Means More: Property Rights and High-Growth Aspiration Entrepreneurship," IZA Discussion Papers 4396, Institute of Labor Economics (IZA).
    3. Ravindra Singh & Ajay Dwivedi & Shikha Gupta & Sumanjeet Singh & Seema Singh, 2022. "Elucidating the moderating role of personality traits in probing the linkage between digital entrepreneurship characteristics and perceived opportunities," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 12(1), pages 175-188, December.
    4. Gian Fazio & Tomasz Marek Mickiewicz, 2009. "Institutional environment, innovative entrepreneurial entry and venture capital financing," UCL SSEES Economics and Business working paper series 102, UCL School of Slavonic and East European Studies (SSEES).

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    More about this item

    Keywords

    Entrepreneurship; Optimism; Venture Growth; Regulatory Focus Theory; Latvia;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • 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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