Does past failure inhibit future entrepreneurial intent? Evidence from Ghana

Abstract

PurposeThe purpose of this paper is to examine the relationship between past entrepreneurial failure and future entrepreneurial intentions. It also considers the moderating role of past entrepreneurial failure on the relationship between attitude, subjective norms and perceived behavioural control (PBC) and entrepreneurial intentions.Design/methodology/approachData from the Ghana Global Entrepreneurship Monitor Adult Population Survey (2013) are used to test the hypotheses developed after an extensive literature review. The empirical specification was estimated with a probit of standard form and marginal derivatives estimated for the purposes of interpretation.FindingsThe mean future entrepreneurial intent is 63.2 per cent of the sample with 75 per cent having failed in the past and 60 per cent never failed before. Also, only 20.9 per cent of the interviewed entrepreneurs have failed at a past entrepreneurial activity. Past entrepreneurial failure has a positive effect on future entrepreneurial intentions. The interaction between attitude and failure yields a positive effect on future entrepreneurial intentions. The same effects can be reported for the interactions between subjective norms and failure as well as PBC and failure.Originality/valueIn this study, the authors are able to show that the mean moderational effects are important but they can be deceptive. Rather, a decomposition helps the authors to disaggregate these effects to better understand the underlying mechanisms.