Entrepreneurial Fear of Failure: A Literature Review and Prospects

Abstract

Fear of failure can not only explain entrepreneurial entry and exit, but also provide a new research perspective for complicated entrepreneurial behavior. Fear of failure could prevent entrepreneurs from profitable opportunities, and even accelerate withdrawing from entrepreneurial activities. It could also encourage entrepreneurs to achieve long-term development of startups by self-motivation. It has a dark side of discouraging entrepreneurs from carrying out entrepreneurial activities, and a bright side of motivating them to move forward. Therefore, despite mounting research on entrepreneurs’ fear of failure, a systematic summary of entrepreneurial fear of failure is still needed for bringing in the latest achievements in this field. Firstly, this paper discusses the concept of entrepreneurial fear of failure, which could be described as an individual’s stable trait or temporary emotional state in existing studies. Based on the achievement motivation theory, the former regards it as a tendency to motivate and guide individuals away from the negative effect of failure, while the latter describes it as a negative emotional state caused by perceived potential or actual threats based on the cognitive appraisal theory of emotion. Secondly, it reviews the measurement methods of entrepreneurial fear of failure, which could be summarized as second-hand data method, questionnaire measurement method and comprehensive experimental method. The advantages and disadvantages of different measurement tools are also discussed. Thirdly, the influencing factors of entrepreneurial fear of failure are presented from both the individual and environmental levels. While demographic characteristics, personal abilities and personal traits are analyzed from the individual level, micro-environment and macro-environment are summarized from the environmental level, which demonstrates the obstacles, government policies and cultural atmosphere that impact on entrepreneurial fear of failure. Fourthly, it summarizes the mechanism of entrepreneurial fear of failure from psychological response and behavioral response. Entrepreneurial fear of failure could either result in a negative impact on individual cognition and emotion, or further result in a negative effect of entrepreneurial behavior.Finally, the prospects of entrepreneurial fear of failure could be summarized from the following five aspects: (1) enrichment of the connotation and development of suitable measurement tools; (2) analysis of the dynamic evolution of entrepreneurial fear of failure; (3) exploration of the formation pattern of entrepreneurial fear of failure; (4) analysis of the dual mechanism on entrepreneurial behavior; (5) the uniqueness of entrepreneurial fear of failure in the context of China. The contributions of this paper are as follows: Firstly, the connotation of entrepreneurial fear of failure as well as its theoretical origin and formation mechanism are combed systematically, so as to lay a foundation for a comprehensive understanding of the nature of entrepreneurial fear of failure. Secondly, the two-sided effect of entrepreneurial fear of failure are presented, so as to enrich the relevant research results in the field of entrepreneurship by exploring the psychological and behavioral results of entrepreneurial fear of failure. Thirdly, this paper also tries to shed light on practice by accumulating knowledge on entrepreneurial education and offer suggestions for policy-makers on managing entrepreneurial failure.