Cognitive origins of entrepreneurial action: How venture-specific knowledge drives financial investments

Entrepreneurial action under uncertainty requires resource commitment, yet the cognitive mechanisms enabling such decisions remain underexplored. This study investigates the role of venture-specific knowledge (VSK) in entrepreneurial action, focusing on two distinct cognitive pathways: refinement, which enhances understanding to address ignorance, and conviction, which strengthens confidence to overcome doubt. Using a causal map representation of VSK, we demonstrate that refinement and conviction independently drive personal financial investment, while also acting as substitutes when one pathway reaches its limits. Our findings extend entrepreneurial action theory by highlighting the distinct cognitive processes underlying VSK. Furthermore, we examine how these pathways interact with individual traits such as entrepreneurial self-efficacy (ESE) and uncertainty avoidance, revealing nuanced moderating effects. These insights advance understanding of entrepreneurial decision making under irreducible uncertainty and provide implications for both theory and practice.