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

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  • Wyrwich, Michael
  • Stuetzer, Michael
  • Sternberg, Rolf
Abstract
Studies on the influence of entrepreneurial role models (peers) on the decision to start a firm ar-gue 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 ex-tended sender-receiver model, we hypothesize that observing entrepreneurs reduces fear of fail-ure in others in environments where approval of entrepreneurship is high while this effect is signif-icantly weaker in low approval environments. Taking advantage of the natural experiment from recent German history and using data from the Global Entrepreneurship Monitor Project (GEM), we find considerable support for our hypotheses.

Suggested Citation

  • Wyrwich, Michael & Stuetzer, Michael & Sternberg, Rolf, 2016. "Entrepreneurial role models, fear of failure, and institutional approval of entrepreneurship: A tale of two regions," MPRA Paper 74241, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:74241
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    More about this item

    Keywords

    Fear of failure; role models; peer effect; entrepreneurial intentions; Global Entrepreneurship Mon-itor; East Germany;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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