The fallacy of “only the strong survive”: The effects of extrinsic motivation on the persistence decisions for under-performing firms

DeTienne, Dawn R.; Shepherd, Dean A.; Castro, Julio O. De

doi:10.1016/j.jbusvent.2007.09.004

Cited by 262 publications

(117 citation statements)

References 97 publications

(112 reference statements)

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“…In fact, the unexpected negative relationship between family employment and ROA can be interpreted in line with Meyer and Zucker's (1989: 68) assertion that MSEs live in a state of "permanent failure," which they define as "a condition characterized by sustained low performance and high persistence" (see also DeTienne et al, 2008;Gimeno et al, 1997).…”

Section: Discussionsupporting

confidence: 67%

Does family employment enhance MSEs performance?

Cruz¹,

Justo

Castro

2012

Journal of Business Venturing

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264

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Section: Discussionsupporting

confidence: 67%

Does family employment enhance MSEs performance?

Cruz¹,

Justo

Castro

2012

Journal of Business Venturing

Self Cite

264

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“…For example, human capital can only result in high growth if the entrepreneur has the aspirations to expand the business (Wiklund and Shepherd, 2003). Moreover, people have different performance thresholds (Gimeno et al, 1997) that are in turn dependent on motivation (DeTienne et al, 2008). In general, the heterogeneity of effect sizes reported in our study suggests the necessity to specify the boundaries of the human capital-success relationship.…”

Section: Implications For Future Researchmentioning

confidence: 72%

Human capital and entrepreneurial success: A meta-analytical review

Unger

Rauch

Fresé

et al. 2011

Journal of Business Venturing

1,458

1,235

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The study meta-analytically integrates results from three decades of human capital research in entrepreneurship. Based on 70 independent samples (N = 24,733), we found a significant but small relationship between human capital and success (r c = .098). We examined theoretically derived moderators of this relationship referring to conceptualizations of human capital, to context, and to measurement of success. The relationship was higher for outcomes of human capital investments (knowledge/skills) than for human capital investments (education/ experience), for human capital with high task-relatedness compared to low task-relatedness, for young businesses compared to old businesses, and for the dependent variable size compared to growth or profitability. Findings are relevant for practitioners (lenders, policy makers, educators) and for future research. Our findings show that future research should pursue moderator approaches to study the effects of human capital on success. Further, human capital is most important if it is task-related and if it consists of outcomes of human capital investments rather than human capital investments; this suggests that research should overcome a static view of human capital and should rather investigate the processes of learning, knowledge acquisition, and the transfer of knowledge to entrepreneurial tasks.

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“…The paper thus represents bridge research in entrepreneurship linking traditional concerns in psychology and management with those in economics. In this regard it is a continuation of recent work aimed at bringing the mainstreams of economics and entrepreneurial studies closer together (Campbell, 2009;DeTienne et al, 2008;Douglas and Shepherd, 1999;Levesque et al, 2002;Minniti and Levesque, 2008;Parker, 2004).…”

Section: Introductionmentioning

confidence: 81%

Do entrepreneurial goals matter? Resource allocation in new owner-managed firms

Dunkelberg

Moore

Scott

et al. 2013

Journal of Business Venturing

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This paper focuses on how entrepreneurial goals affect the resource allocation of new firm owners. It connects research in psychology and management that examines the core motivations of entrepreneurs with research in economics that models the behavior of owner-managers as utility-maximizing rather than profit-maximizing. We hypothesize that new owners with nonmonetary goals allocate their resources differently than do owners with monetary goals and that the differences are meaningful in size. To test these hypotheses, we estimate firm level equations based on economic theories of input demand that show how input quantities depend on owner goals. Data come from a national survey of new U.S. business owners. We find owner goals have both a statistically and substantively significant effect on resource allocation for new firms. Owners with nonmonetary goals put in more of their own and family hours rather than hiring outside employees. Implications for research and policy are discussed.The entrepreneurship literature has long recognized that entrepreneurs have different goals when starting a business, many of which are nonmonetary such as the desire to be one's own boss. The literature has been less definitive with regard to the behavioral significance of these goals. The research reported here focuses on the influence entrepreneurial goals have on new firm resource allocation. Once businesses are launched, entrepreneurs must decide on the appropriate input mix-for example, how much labor should be provided by themselves or family members and how much by hired employees. If goals are behaviorally important, they should affect the outcomes of these decisions. While it would seem likely that entrepreneurs with nonmonetary goals operate their firms differently than do those with monetary goals, scant evidence exists to support this assertion.Drawing on previous work in management, psychology, and economics, we construct a conceptual framework in which the input decisions of utility-maximizing entrepreneurs are partly determined by their goals. We then specify an econometric model based on this framework consisting of equations showing firm inputs as functions of the entrepreneur's goals and a set of standard economic control variables (industry, region, and human capital measures). The model is estimated using a unique dataset obtained from

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The fallacy of “only the strong survive”: The effects of extrinsic motivation on the persistence decisions for under-performing firms

Cited by 262 publications

References 97 publications

Does family employment enhance MSEs performance?

Does family employment enhance MSEs performance?

Human capital and entrepreneurial success: A meta-analytical review

Do entrepreneurial goals matter? Resource allocation in new owner-managed firms

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