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How do managerial ties influence the effectuation and causation of entrepreneurship in China? The role of entrepreneurs’ cognitive bias

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  • Wenwei Zhang
  • Wenhong Zhao
  • Yu Gao
  • Zhenxin Xiao

Abstract

Drawing on social cognitive theory and social network theory, this study investigates the relationships between managerial ties, entrepreneurs’ cognitive bias, and the effectuation and causation of behavioural modes of entrepreneurship. It uses structural equation modelling to analyse a sample of 214 entrepreneurs in China. The empirical results indicate that business ties lead entrepreneurs to use effectual approaches by prompting the entrepreneurs’ overconfidence, whereas institutional ties enable entrepreneurs to use both causation and effectuation by prompting the entrepreneurs’ illusion of control. This study delineates how different types of managerial ties affect causation and effectuation through different cognitive mechanisms.

Suggested Citation

  • Wenwei Zhang & Wenhong Zhao & Yu Gao & Zhenxin Xiao, 2020. "How do managerial ties influence the effectuation and causation of entrepreneurship in China? The role of entrepreneurs’ cognitive bias," Asia Pacific Business Review, Taylor & Francis Journals, vol. 26(5), pages 613-641, October.
    • Handle: RePEc:taf:apbizr:v:26:y:2020:i:5:p:613-641
    DOI: 10.1080/13602381.2020.1765537
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    Cited by:

    1. Kraft, Priscilla S. & Günther, Christina & Kammerlander, Nadine H. & Lampe, Jan, 2022. "Overconfidence and entrepreneurship: A meta-analysis of different types of overconfidence in the entrepreneurial process," Journal of Business Venturing, Elsevier, vol. 37(4).
    2. Sylvia Hubner & Fabian Most & Jochen Wirtz & Christine Auer, 2022. "Narratives in entrepreneurial ecosystems: drivers of effectuation versus causation," Small Business Economics, Springer, vol. 59(1), pages 211-242, June.

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