Does it pay to be an ethical leader in entrepreneurship? An investigation of the relationships between entrepreneurs’ regulatory focus, ethical leadership, and small firm growth

Alenka Slavec Gomezel () and Rok Stritar
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Alenka Slavec Gomezel: Ljubljana University
Rok Stritar: Ljubljana University

Review of Managerial Science, 2023, vol. 17, issue 1, No 6, 155-173

Abstract: Abstract In this research, we use regulatory focus theory and ethical leadership theory to explore the dispositional and behavioral mechanisms of individual entrepreneurs that contribute to small firm growth. While previous research has mainly investigated the outcomes of regulatory focus and ethical leadership in a managerial and subordinate setting, little attention has been paid to such relationships in an entrepreneurial setting in which entrepreneurs and their personalities impact small firms’ growth. The purpose of the study is to uncover whether promotion or prevention focus is related to entrepreneurs’ ethical leadership, and whether entrepreneurs’ self-evaluation of their ethical leadership style is associated with small firm growth. Drawing from a dataset of 166 entrepreneurs and applying SEM analysis, we found that promotion focus, rather than prevention focus, is positively related to ethical leadership and that ethical leadership is positively and significantly related to small firm growth. The study emphasizes that entrepreneurs’ ethical leadership can enhance small firm growth, and therefore it pays off for entrepreneurs to be ethical leaders.

Keywords: Entrepreneur; Regulatory focus; Ethical leadership; Small firm growth (search for similar items in EconPapers)
JEL-codes: L26 M14 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11846-021-00512-6

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