How Past Failure Predicts Subsequent Entrepreneurial Intention: A Comparative Study of Mainland China and Taiwan

Xia Xiao,Yan Bai,Hui He

doi:10.3390/su12062331

Abstract

Entrepreneurship is the center of economic growth process, and it is context-sensitive. We compare Mainland China and Taiwan by investigating the impact of past failure on individual entrepreneurs. Using a large amount of data from GEM (Global Entrepreneurship Monitor), a logistic regression approach was adopted and most of the major variables in models are correlated positively. We demonstrate that past failure does affect entrepreneurs’ perceived capability and next enterprising activity positively in the two regions. Unlike the moderating role of culture, entrepreneurial motivation exerts a quite different impact on the relationship between past failure and entrepreneurs’ future intention in the two regions. Our results provide not only theoretical implications for context-related entrepreneurial motivation, but practical suggestions for entrepreneurs and policy makers.

Highlights

As highlighted by Schumpeter, entrepreneurship is the center of economic growth process [1]
We propose the following hypothesis: Hypothesis 1 (H1): Past failure has a positive effect on entrepreneurial intention in both Mainland China and Taiwan
We make a comparative study on the associations of past failure on individual entrepreneurs in Mainland China and Taiwan

Summary

Introduction

As highlighted by Schumpeter, entrepreneurship is the center of economic growth process [1]. Study demonstrates that entrepreneurs have no motives to re-enter into a new business after firm failure, according to the logic of firm dynamics [5]. Those who ever failed would exit out of entrepreneurship, because they have learned about their actual inferior capabilities. Recent studies have challenged this logic of firm dynamics theoretically and empirically Scholars believe that both past failure and success reflect useful learning effects and enhance entrepreneurs’ experience and skills, so they are more likely to start again [6]. It is consistent with empirical evidence that habitual entrepreneurs are a widespread phenomenon

Methods

Results

Conclusion