Overview of Entrepreneurial Failure: From an Attributional Perspective

Jiangyu Huang,Jianhong Li,Jing Li

doi:10.11648/j.jim.20211001.11

Abstract

Entrepreneurial failure is a hot topic in entrepreneurship research. Existing literature on entrepreneurial failure mainly focuses on the definition of entrepreneurial failure, the analysis of the causes of entrepreneurial failure, the different attributions of failure caused by different stakeholders due to cognitive biases, and the different reentrepreneurial actions caused by these differences in attributions. Based on the above literature and attribution theory, this paper proposes that future research should explore whether differences in gender, experience background (such as educational experience, etc.) and task type affect the attribution of entrepreneurial failure, as well as the mechanism by which they influence the attribution. The failure of enterprise entrepreneurship affects the healthy and sustainable development of the economy. Based on attribution reasons, the influencing factors of entrepreneurship failure are discussed, which provides useful evidence for government policy formulation. This Attribution theory points out that the diversity of individual attributions in different situations is not only due to the complexity of individual perception and motivation, but also due to the diversity of tasks. By comparing the causes of entrepreneurial failure and the attribution theory in previous entrepreneurial failure literatures, we propose three possible research directions in the future. Studies should make an in-depth study of entrepreneurs' perceptions of failure and the impact of these perceptions on learning.

Highlights

Introduction of Entrepreneurial FailureGenerally, failure refers to a condition in which the desired goal is not achieved [1]
By comparing the causes of entrepreneurial failure and the attribution theory in previous entrepreneurial failure literatures, we propose the following possible research directions in the future: First of all, previous literature suggests that female entrepreneurs have a higher failure rate than male entrepreneurs [47]
Few of these studies have continued to explore whether female entrepreneurs differ from male entrepreneurs in their attribution of failure, and whether attributions have different effects on their subsequent entrepreneurship and learning from failure

Summary

Introduction of Entrepreneurial Failure

Failure refers to a condition in which the desired goal is not achieved [1]. The business failure or entrepreneurial failure of a new venture refers to the termination of the company due to its actual performance failing to achieve its goals [7, 8]. From the perspective of financial, a company fails when its earnings decline or/and costs rise to the extent that the company is insolvent, unable to attract new borrowing or equity financing, and subsequently unable to continue operating under its current ownership and management [9] Liao and his colleagues (2008) 's research only focuses on nascent entrepreneurs and defines the failure of the nascent entrepreneurial activity as the termination of its entrepreneurial activity [10]. Entrepreneurial failure should include both the individual failure of entrepreneurs and the failure of their founding enterprises [20]

Reasons for Entrepreneurial Failure

Consequences of Entrepreneurial Failure Attribution

Conclusion and Future Outlook