Reference point formation and new venture creation

Andreas Hack (), Frauke Bieberstein () and Nils D. Kraiczy ()
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Andreas Hack: University of Bern
Frauke Bieberstein: University of Bern
Nils D. Kraiczy: University of Bern

Small Business Economics, 2016, vol. 46, issue 3, No 6, 447-465

Abstract: Abstract In this study, we introduce reference point formation as an important antecedent of new venture creation. Based on considerations from prospect theory, we hypothesize that individuals who generally and consistently set more aspiring reference points have a higher intention to form a new venture. Testing our hypothesis with entrepreneurs and managers, results show that entrepreneurs indeed set more aspiring reference points. Therefore, they might find themselves more often in a perceived loss situation which in turn increases their risk-taking behavior, following the predictions of prospect theory. In testing entrepreneurial intention of business graduate students, results are shown to be robust. We discuss theoretical and managerial implications of the findings and develop avenues for future research.

Keywords: Entrepreneurial intention; New venture creation; Prospect theory; Reference point; L26; M13; D81 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s11187-015-9694-5

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