Entrepreneur start-up versus persistence decisions: A critical evaluation of expectancy and value

Abstract

Research suggests that entrepreneurs tend to seek to maximize utility when considering whether to pursue a new venture opportunity. However, when choosing whether to persist with their current venture or not, utility maximization may not be of primary importance. Using a conjoint experiment, this article examines the difference between policies in start-up decisions versus persistence decisions. The analysis of the decisions of 135 entrepreneurs indicates that the manner in which entrepreneurs use expectancy and value in persistence decision policies is significantly different to the way that they use expectancy and value in general opportunity pursuit decision policies. The results offer novel insights into the entrepreneurial decision-making process.

Entrepreneurial motivation and self-employment: evidence from expectancy theory

“…Correspondingly, according to Holland and Garrett (2015), businesses are not only created by those who have the ability and aptitude to do so but also by those with the motivation. Both variables are important for self-employed persistence and have interesting practical implications.…”

“…This should be borne in mind when designing programs to promote entrepreneurship since it is harder to remain selfemployed than it is to start being so, as Holland and Garrett (2015) highlighted. *p < 0.05; **p < 0.01; ***p < 0.001 …”

“…Furthermore, as Holland and Garrett (2015) argued, persistence is vital to entrepreneurial success. Millán et al (2012) examined the transition out of self-employment into other situations (paid employment, unemployment and inactivity) and assumed that Ba rational individual will quit self-employment to enter paid-employment if the expected utility from self-employment is smaller than the expected utility from a wage employment offer received^(p. 85).…”

“…Authors such as Baron (2004) or Holland and Garrett (2015) indicate that this decision to continue is connected with the expectations and values that are intrinsic to an entrepreneur's cognitive process. According to Colombo and Grilli (2016), very little has been published about the entrepreneur's decision to continue or not during an industry-specific crisis.…”

¿Qué características tienen las empresas que crean los ingenieros de la Universidad Industrial de Santander?

“…A partir de este modelo Dunkelberg et al [19] plantean la hipótesis de que los emprendedores por diferentes razones al empezar un negocio asignan sus recursos, capital y fuerza de trabajo, de manera diferente y que las diferencias son significativas en el tamaño. Más adelante en el proceso del emprendimiento, Holland & Garrett [20] examinan como la decisión de persistir en el emprendimiento se convierte en un nuevo venture percibido como una gran incertidumbre. El riesgo implica el uso de un dado que tiene seis lados y que es equilibrado, mientras que la incertidumbre implica el uso de dados que pueden no ser equilibrados donde no se conoce ni siquiera el número de lados.…”