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The good, the bad and the uncertain: Employers' perceptions of former entrepreneurs

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  • Küsshauer, Alexander
  • Baum, Matthias

Abstract

Do employers perceive former entrepreneurs as suitable candidates for paid employment? We argue that (positive and negative) stereotypes and uncertainty drive employability perceptions regarding former entrepreneurs; these perceptions are contingent upon job type and the background of both the applicant and the person evaluating them. Two empirical studies yield broad support for our predictions. In Study 1 (a vignette study), we find lower employability perceptions regarding former entrepreneurs compared to other applicants, which are significantly mediated by positive and negative stereotypes as well as uncertainty perceptions. In Study 2 (conjoint experiments with two separate samples: recruiters and executives), we substantiate the results of Study 1, revealing that when former entrepreneurs apply for a job involving personnel responsibility or when there is evidence of a failure in their vita, they are less likely to face devaluations. Further, we find evidence for similarity effects; more specifically, entrepreneurs do not suffer from employability devaluation when the recruiter is a part-time entrepreneur or the executive is the business owner. We discuss the implications as part of the employability debate about former entrepreneurs.

Suggested Citation

  • Küsshauer, Alexander & Baum, Matthias, 2023. "The good, the bad and the uncertain: Employers' perceptions of former entrepreneurs," Journal of Business Venturing, Elsevier, vol. 38(2).
    • Handle: RePEc:eee:jbvent:v:38:y:2023:i:2:s0883902622000829
    DOI: 10.1016/j.jbusvent.2022.106270
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