Entrepreneurial role models, fear of failure, and institutional approval of entrepreneurship: a tale of two regions

Michael Wyrwich, Michael Stuetzer () and Rolf Sternberg
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Michael Stuetzer: Baden Württemberg Cooperative State University
Authors registered in the RePEc Author Service: Michael Stützer

Small Business Economics, 2016, vol. 46, issue 3, No 7, 467-492

Abstract: Abstract Studies on the influence of entrepreneurial role models (peers) on the decision to start a firm argue that entrepreneurial role models in the local environment (1) provide opportunities to learn about entrepreneurial tasks and capabilities, and (2) signal that entrepreneurship is a favorable career option thereby reducing uncertainty that potential entrepreneurs face. However, these studies remain silent about the role of institutional context for these mechanisms. Applying an extended sender–receiver model, we hypothesize that observing entrepreneurs reduces fear of failure in others in environments where approval of entrepreneurship is high, while this effect is significantly weaker in low-approval environments. Taking advantage of the natural experiment from recent German history and using data from the Global Entrepreneurship Monitor Project, we find considerable support for our hypotheses.

Keywords: Fear of failure; Role models; Peer effect; Entrepreneurial intentions; Global Entrepreneurship Monitor; Communist legacy; East Germany; D01; L26; M13; P20; R23; Z13 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (77)

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DOI: 10.1007/s11187-015-9695-4

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