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Making the Most of Failure Experiences: Exploring the Relationship between Business Failure and the Identification of Business Opportunities

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  • Brandon A. Mueller
  • Dean A. Shepherd

Abstract

Although previous research has extolled the importance of business failure as a precursor to transformational learning, few studies have explored the conditions under which such learning occurs or the content of the resulting knowledge. We explore several cognitive moderators of the relationship between failure experiences and a specific type of opportunity identification knowledge—the use of structural alignment processes. Results indicate that learning from failure is facilitated for entrepreneurs who possess a cognitive toolset that consists of opportunity prototypes and an intuitive cognitive style. Moreover, we found that prior professional knowledge negatively moderates this relationship.

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  • Brandon A. Mueller & Dean A. Shepherd, 2016. "Making the Most of Failure Experiences: Exploring the Relationship between Business Failure and the Identification of Business Opportunities," Entrepreneurship Theory and Practice, , vol. 40(3), pages 457-487, May.
    • Handle: RePEc:sae:entthe:v:40:y:2016:i:3:p:457-487
    DOI: 10.1111/etap.12116
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    2. Warnick, Benjamin J. & Kier, Alexander S. & LaFrance, Emily M. & Cuttler, Carrie, 2021. "Head in the clouds? Cannabis users' creativity in new venture ideation depends on their entrepreneurial passion and experience," Journal of Business Venturing, Elsevier, vol. 36(2).
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    4. Nadeera Ranabahu & Mary Barrett, 2020. "Does practice make micro-entrepreneurs perfect? An investigation of expertise acquisition using effectuation and causation," Small Business Economics, Springer, vol. 54(3), pages 883-905, March.
    5. Zhuang Xiong & Pengju Wang & Yu Zhao, 2020. "Re-Innovation from Failure, Institutional Environmental Differences, and Firm Performance: Evidence from China," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 22(53), pages 197-197, February.
    6. Eduardo Terán-Yépez & David Jiménez-Castillo & Manuel Sánchez-Pérez, 2022. "The effect of international opportunity recognition processes on problem-solving competence: how does past negative entrepreneurial experience matter?," Oeconomia Copernicana, Institute of Economic Research, vol. 13(2), pages 541-579, June.
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    8. Faroque, Anisur R. & Morrish, Sussie C. & Kuivalainen, Olli & Sundqvist, Sanna & Torkkeli, Lasse, 2021. "Microfoundations of network exploration and exploitation capabilities in international opportunity recognition," International Business Review, Elsevier, vol. 30(1).
    9. Kumju Hwang & Jinsook Choi, 2021. "How Do Failed Entrepreneurs Cope with Their Prior Failure When They Seek Subsequent Re-Entry into Serial Entrepreneurship? Failed Entrepreneurs’ Optimism and Defensive Pessimism and Coping Humor as a ," IJERPH, MDPI, vol. 18(13), pages 1-24, June.
    10. Richard Bednar & Natalia Tariskova & Branislav Zagorsek, 2018. "Startup Revenue Model Failures," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 14(4), pages 141-157.
    11. Shai Harel & Eliran Solodoha & Stav Rosenzweig, 2022. "Can Entrepreneurs Who Experienced Business Closure Bring Their New Start-Up to a Successful M&A?," JRFM, MDPI, vol. 15(9), pages 1-17, August.
    12. Kaoxun Chi & Senqiang Wang & Mahmood Ahmad, 2023. "Entrepreneurs’ Cognitive Schemas and New Venture Business Model Innovativeness: The Mediating Effect of Environmental Scanning," Sustainability, MDPI, vol. 15(4), pages 1-23, February.
    13. Chatterjee, Sheshadri & Chaudhuri, Ranjan & Mariani, Marcello & Fosso Wamba, Samuel, 2023. "The consequences of innovation failure: An innovation capabilities and dynamic capabilities perspective," Technovation, Elsevier, vol. 128(C).
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