WHY ARE OPTIMISTIC ENTREPRENEURS SUCCESSFUL? AN APPLICATION OF THE REGULATORY FOCUS THEORY

Ruta Aidis (), Tomasz Marek Mickiewicz () and Arnis Sauka ()

No wp914, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan Stephen M. Ross Business School

Abstract: Does entrepreneurial optimism affect business performance? Using a unique data set based on repeated survey design, we investigate this relationship empirically. Our measures of ‘optimism’ and ‘realism’ are derived from comparing the turnover growth expectations of 133 owners-managers with the actual outcomes one year later. Our results indicate that entrepreneurial optimists perform significantly better in terms of profits than pessimists. Moreover, it is the optimist-realist combination that performs best. We interpret our results using regulatory focus theory.

Keywords: Entrepreneurship; Optimism; Venture Growth; Regulatory Focus Theory; Latvia (search for similar items in EconPapers)
JEL-codes: D21 L21 L26 M13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-edu and nep-ent
Date: 2008-02-01
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Persistent link: http://EconPapers.repec.org/RePEc:wdi:papers:2008-914

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