Scandinavian Working Papers in Economics

Ratio Working Papers,
The Ratio Institute

No 223: How Culture Molds the Effects of Self Efficacy and Fear of Failure on Entrepreneurship

Karl Wennberg (), Saurav Pathak () and Erkko Autio ()
Additional contact information
Karl Wennberg: The Ratio Institute & Stockholm School of Economics, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden
Saurav Pathak: Michigan Tech University, Postal: Michigan Tech University, , School of Business and Economics Academic Office Building, G006, ,
Erkko Autio: Imperial College London Business School, Postal: Imperial College London Business School,, South Kensington Campus, London SW7 2AZ, United Kingdom

Abstract: We use data from the Global Entrepreneurship Monitor (GEM) and the Global Leadership and Organizational Behavior Effectiveness study (GLOBE) for 42 countries to investigate how the effects of individual’s self-efficacy and fear of failure on entrepreneurial entry are contingent on national cultural practices. Using multi-level methodology, we observe that the positive effect of self-efficacy on entry is moderated by the cultural practices of institutional collectivism and performance orientation. Conversely, the negative effect of fear of failure on entry is moderated by the cultural practices of institutional collectivism and uncertainty avoidance. We discuss the implications for theory and methodological development in culture and entrepreneurship.

Keywords: Culture; Entrepreneurship; Institutions; Multi-level

JEL-codes: D24; L25; L26

39 pages, November 4, 2013

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