How do entrepreneurs and their ventures benefit from prior setbacks: The mediating role of attitude towards failure

Abstract

By integrating an experiential learning view into an attitude model, we propose that an entrepreneur’s attitude towards failure resulting from a prior setback experience can positively affect a new venture’s commitment to learning. Moreover, the entrepreneur may be exposed to indirect experiential information by gaining access to managerial ties in the venture industry, moderating the influence of prior setback experience on attitudes towards failure. We developed a conceptual model to account for the conditional and indirect effects of an entrepreneur’s setback experience on organisational commitment to learning through the entrepreneur’s attitude towards failure. Using structural equation modelling, we analysed a sample of 143 entrepreneurs located in Western China’s high-technology industrial development zones and found full support for our model. This study provides theoretical and empirical insights into the intertwined relationships between context-specific experiences, individual attitude development and venture outcomes in entrepreneurship.