The Dunning-Kruger effect and entrepreneurial self-efficacy: How tenure and search distance jointly direct entrepreneurial self-efficacy

Abstract

Are people with more experience running an entrepreneurial venture also more confident? How does that confidence look for those who gathered those experiences outside of their comfort zone? This paper advances the entrepreneurial self-efficacy (ESE) literature by integrating the Dunning-Kruger perspective into the experience-ESE relationship, and by conceptualizing experience as a combination of tenure and search distance (a venture searches distantly if its new products are dissimilar to its existing ones). In a unique sample of small businesses, between-entrepreneur analyses reveal a U-shaped association between venture tenure and ESE for entrepreneurs who engage in distant search with their venture, and a relatively stable ESE over venture tenure if distant search is low.