Abstract

PurposeThis paper aims to investigate how cognitive factors affect borrowing discouragement among entrepreneurs. Specifically, the study tests the effects of overconfidence, dispositional optimism and entrepreneurial self-efficacy (ESE) on borrowing discouragement.Design/methodology/approachThe study relies on Fraser's (2014) theoretical model to formulate the hypotheses. The results are based on a small sample of French entrepreneurs drawn from the AMADEUS database. Hierarchical Probit estimations are used to access the effects of the cognitive factors on borrowing discouragement.FindingsThe findings suggest that optimistic entrepreneurs are less likely to feel discouraged, while miscalibrated entrepreneurs are more prone to feel borrowing discouragement. There was no significant result for ESE and discouragement.Originality/valueThe study brings new implications and insights to the literature that investigates factors that cause discouragement in entrepreneurs, as well as implications for policymakers.

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