On the Directional of Causality between Affect and Effort in Entrepreneurship

Abstract

Whether affect precedes or follows entrepreneurial effort is a contested research question with mixed empirical findings and significant implications for theory and practice. Using a longitudinal, 4 time period, cross-lagged study in a startup accelerator program with 29 entrepreneurs, we empirically examine the causal relationship between affect and effort. For empirical precision, effort is operationalized to differentiate between effort directed at routine (not-entrepreneurial), and effort on novel tasks (entrepreneurial). Our results show that, after controlling for contemporaneous and cross-lagged effects, affect significantly predicts effort on novel, but not routine, tasks in subsequent time period. Moreover, effort on new tasks in current time period is negatively, not positively, related to affect in subsequent time period. These findings provide new and counter-intuitive evidence of causal relationships between entrepreneurial affect and effort.