IDEAS home Printed from https://ideas.repec.org/a/inm/ororsc/v32y2021i4p940-964.html
   My bibliography  Save this article

Failing to Learn from Failure: How Optimism Impedes Entrepreneurial Innovation

Author

Listed:
  • Mario Daniele Amore

    (Department of Management and Technology, Bocconi University and CEPR, 20100 Milan, Italy)

  • Orsola Garofalo

    (Department of Strategy and Innovation, Copenhagen Business School, 2000 Frederiksberg, Denmark)

  • Victor Martin-Sanchez

    (King’s Business School, King’s College London, London WC2B 4BG, United Kingdom)

Abstract

Extant research shows that entrepreneurs are typically overly optimistic about their ventures’ prospects and that such optimism hampers performance. We analyze how dispositional optimism affects the adjustments to entrepreneurs’ expectations after they receive negative feedback on their task performance. We then explore the relationship between optimism and the effectiveness of innovation. Exploiting unique firm-level data and a laboratory experiment involving 205 entrepreneurs, we find that dispositional optimism is negatively associated with both the likelihood and extent of belief updating in response to negative feedback. Furthermore, dispositional optimism triggers a discrepancy—between innovation inputs and outputs—that reduces a firm’s innovation effectiveness.

Suggested Citation

  • Mario Daniele Amore & Orsola Garofalo & Victor Martin-Sanchez, 2021. "Failing to Learn from Failure: How Optimism Impedes Entrepreneurial Innovation," Organization Science, INFORMS, vol. 32(4), pages 940-964, July.
    • Handle: RePEc:inm:ororsc:v:32:y:2021:i:4:p:940-964
    DOI: 10.1287/orsc.2020.1359
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/orsc.2020.1359
    Download Restriction: no
    File URL: https://libkey.io/10.1287/orsc.2020.1359?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ororsc:v:32:y:2021:i:4:p:940-964. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.