Switch or persevere? The effects of experience and metacognition on persistence decisions

Abstract

This paper extends the scholarly understanding of entrepreneurial persistence decisions by identifying individual-level constructs that moderate which decision criteria have the most influence on entrepreneurs' persistence decisions. Prior research demonstrates that contextual factors, such as feedback through adversity and the attractiveness of opportunities in an entrepreneur's environment, determine whether or not an entrepreneur will persist with their current venture. We contribute to this literature by theoretically proposing and empirically testing how individual differences in entrepreneurial experience, metacognitive experience, and metacognitive knowledge moderate which aspects of environmental information entrepreneurs pay the most attention to when deciding whether or not to persist. We test our proposed model using a conjoint experiment that allows for monitoring actual persistence decisions of 124 entrepreneurs. Results suggest that metacognitive knowledge influences persistence decisions primarily through altering the impact that probability of expected outcomes associated with potential alternatives has on entrepreneurs' persistence decisions. Int Entrep Manag J Furthermore, the results provide evidence that more experienced entrepreneurs weigh financial returns and switching costs more heavily when making persistence decisions.

Influence of the entrepreneur's capacity in business performance

“…When the experience becomes a routine, because its repetitive nature, it is a denoted capacity that results from the knowledge acquired over time and can have a positive moderating effect on the performance of new companies (Gompers et al, 2008;Kaplan & Schoar, 2005;Mattingly et al, 2016;Sørensen, 2007). Duchek (2018) points out that the impact of experience on business management must have positive effects on entrepreneurs in order to recognize new business opportunities.…”

Entrepreneurial cognition and socially situated approach: a systematic and bibliometric analysis

“…Prior business ownership experience, in terms of failure and success, influences subsequent behavior and decisions (Ucbasaran et al 2009) and this is true even in the team-level cognitive process (Zheng 2012). Moreover, metacognitive processes are useful for recognizing knowledge structure and heuristics, as they enable novel, uncertain (Haynie et al 2010), and persistent (Mattingly et al 2016) entrepreneurial decisions to be made.…”

Impact of relatedness, uncertainty and slack on corporate entrepreneurship decisions

“…12–13). Consistently, some recent conjoint analyses utilize 9-point Likert scales to measure similar dependent variables to the present study, namely the decision to continue to invest in a current business versus reallocating resources to new opportunities (Mattingly et al , 2016) and the decision to continue investing in a current business versus allocating resources elsewhere despite predictions about adverse environmental conditions (Holland and Shepherd, 2013).…”