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Why Are Optimistic Entrepreneurs Successful? An Application Of The Regulatory Focus Theory

Author

Listed:
  • RUTA AIDIS

    ()

  • TOMASZ MICKIEWICZ*

    ()

  • ARNIS SAUKA

    ()

Abstract

Does entrepreneurial optimism affect business performance? Using a unique data set based on repeated survey design, we investigate this relationship empirically. Our measures of ???optimism??? and ???realism??? are derived from comparing the turnover growth expectations of 133 owners-managers with the actual outcomes one year later. Our results indicate that entrepreneurial optimists perform significantly better in terms of profits than pessimists. Moreover, it is the optimist-realist combination that performs best. We interpret our results using regulatory focus theory.

Suggested Citation

  • Ruta Aidis & Tomasz Mickiewicz* & Arnis Sauka, 2008. "Why Are Optimistic Entrepreneurs Successful? An Application Of The Regulatory Focus Theory," William Davidson Institute Working Papers Series wp914, William Davidson Institute at the University of Michigan.
  • Handle: RePEc:wdi:papers:2008-914
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    References listed on IDEAS

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    1. S. Dellavigna., 2011. "Psychology and Economics: Evidence from the Field," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 4.
    2. Brockner, Joel & Higgins, E. Tory & Low, Murray B., 2004. "Regulatory focus theory and the entrepreneurial process," Journal of Business Venturing, Elsevier, vol. 19(2), pages 203-220, March.
    3. Brian Wu & Anne Marie Knott, 2006. "Entrepreneurial Risk and Market Entry," Management Science, INFORMS, vol. 52(9), pages 1315-1330, September.
    4. Delmar, Frederic & Davidsson, Per & Gartner, William B., 2003. "Arriving at the high-growth firm," Journal of Business Venturing, Elsevier, vol. 18(2), pages 189-216, March.
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    Cited by:

    1. Estrin, Saul & Korosteleva, Julia & Mickiewicz, Tomasz, 2009. "Better Means More: Property Rights and High-Growth Aspiration Entrepreneurship," IZA Discussion Papers 4396, Institute for the Study of Labor (IZA).
    2. Gian Fazio & Tomasz Marek Mickiewicz, 2009. "Institutional environment, innovative entrepreneurial entry and venture capital financing," UCL SSEES Economics and Business working paper series 102, UCL School of Slavonic and East European Studies (SSEES).

    More about this item

    Keywords

    Entrepreneurship; Optimism; Venture Growth; Regulatory Focus Theory; Latvia;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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