Entrepreneurial Risk-taking Research Articles

Exploring Entrepreneurial Risk-Taking Among University Students: A Thematic Analysis

Exploring Entrepreneurial Risk-Taking Among University Students: A Thematic Analysis

When Do Second-Generation Returnees Affect Family Firms’ Entrepreneurial Risk-Taking? The Moderating Role of Managerial Discretion

ABSTRACT We posit that the dual identities of second-generation returnees present a complex situation regarding their influence on family firms’ entrepreneurial risk-taking (ERT). On one hand, their status as returnees may have a positive effect on firms’ ERT. On the other hand, their potential successor role may limit their ability to exert influence on ERT due to constraints imposed by the first generation, the firm and the home environment. To unravel the puzzling relationship between second-generation returnees and a family firm’s ERT, we examine conditions under which second-generation returnees promote or inhibit a firm’s ERT. In order to frame these conditions, we draw upon the upper echelon theory and the concept of managerial discretion. Our study of 270 family firms in China reveals that second-generation returnees holding higher managerial positions, operating in high-growing markets, or in institutionally underdeveloped regions are empowered to have a stronger positive impact on a family firm’s ERT. This research contributes to our knowledge of generational involvement, returnee executives, and the upper echelon theory.

Exploring the Impact of School Factors, Innovativeness, and Creativity on Entrepreneurial Risk-Taking: A Causal Model

Exploring the Impact of School Factors, Innovativeness, and Creativity on Entrepreneurial Risk-Taking: A Causal Model

How political connections affect entrepreneurial risk-taking in SMEs: A symmetric assessment and a configurational approach

Drawing on resource dependency theory and the resource-absorbing perspective of risk-taking, this article examines how political connections provide firms with opportunities to gain government funding support to enhance financial slack, which can in turn benefit their entrepreneurial risk-taking. We employ both symmetrical (partial least squares structural equation modelling (PLS-SEM)) and configurational approaches (fuzzy-set qualitative comparative analysis (fsQCA)) using a sample of 202 small and medium-sized enterprises (SMEs) in China. Our results from PLS-SEM suggest government financial funding support and financial slack play sequential mediating roles in the relationship between political connections and entrepreneurial risk-taking. The results of fsQCA further highlight the importance of political connections and financial slack as core conditions for entrepreneurial risk-taking and uncover the multiple pathways through which political connections influence entrepreneurial risk-taking. These findings advance our understanding of how entrepreneurial risk-taking in SMEs may require configurations of different resources.

Does Entrepreneurial Risk-Taking Affect the Business Performance of Micro-Enterprises? Evidence from Skikda in Algeria

Abstract According to several previous studies, entrepreneurial risk-taking is an important aspect that can lead to prospective business opportunities, hence improving entrepreneurial outcomes such as enterprise performance. The main purpose of this paper is to examine the extent and degree of impact of entrepreneurial risk-taking (ERT) as one of the dimensions of entrepreneurial mindset on the performance of micro enterprises in Skikda, Algeria. Based on a self-administered survey questionnaire, data were collected from a random sample of 142 micro-enterprises in Skikda. The study adopted descriptive, correlation, and regression analyses to estimate the impact of entrepreneurial risk-taking. collected data were analyzed using the Statistical Package for Social Sciences (SPSS 22) programme. The findings demonstrate that entrepreneurial risk-taking significantly affects the performance of micro enterprises in Skikda. Of the total variance of the performance of micro enterprise’s, 9.2% can be explained by the variability of entrepreneurial risk-taking. A small percentage is expected and can partly be explained by the presence of other factors that affect the performance of these enterprises as well as the negative effects of the COVID-19 pandemic on the process of economic activity and available business opportunities worldwide, especially these very small enterprises. However, the presence of this positive impact calls for a focus on raising the risk-taking spirit of existing and potential Algerian entrepreneurs, by holding conferences, forums and entrepreneurial programmes that enhance and support this characteristic of the entrepreneurial mindset.

Entrepreneurial Risk-Taking: Implications From Risk-Sensitivity Theory

Entrepreneurship is a risky endeavor. Why do some people decide to accept entrepreneurial risks in order to obtain possible financial and non-financial returns? The debate over this question has been going on for decades, but it has never ended. In this study, I join the debate and attempt to answer the question based on risk-sensitivity theory. The main idea behind the theory is that need motivates risk-taking behaviors. I review the literature on entrepreneurial risk-taking and focus on four broad approaches: trait, demographic, environmental, and cognitive. I develop an integrative framework based on risk-sensitivity theory. The framework recognizes the value of different approaches to entrepreneurial risk-taking. At the same time, it also addresses the limitations of each approach if used alone. My central argument is that people take entrepreneurial risks because other less risky options cannot meet their needs.

Entrepreneurial Risk-Taking in Sustainable Energy: University Spin-Off Firms and Market Introduction in Northwest Europe

Universities are cradles of innovation, with many start-ups involved in sustainable energy solutions. The extent in which such solutions reach the market and the kind of risk-related factors young firms encounter, are hardly known and understood. We aim to clarify market introduction and focus on the empirics of firms’ risk-taking behavior related to strategic choices, competences, and interactions with (national) ecosystem conditions. We use a unique dataset of almost 110 university spin-off firms and a small selected sample from this set. A total of 60% of spin-offs are able to reach the market, most of them in the first five years of spin-offs’ lives. Wind energy provides the best chances, as compared to such things as solar photovoltaics (PV) and advanced biomass. In-depth results suggest the high probability of quick market introduction in ‘Innovation Leader’ countries, like Sweden and Denmark, if combined with employing rich collaborative networks. A second set of favorable influences includes a practical mindset and accessing substantial investment capital. In contrast, strong risks tend to be connected to activity in fundamental inventions, highly specialized technology, weakly developed (sub) markets, poorly built networks, and short refunding time of substantial investment. This study provides a unique contribution to understanding the market introduction of sustainable energy solutions and risk-taking in this effort by young high-tech firms, among others, connected to differences between countries.

The antecedents of entrepreneurial risk-taking in private family firms: CEO seasons and contingency factors

This article investigates how entrepreneurial risk-taking in family firms is shaped by CEO tenure, generational involvement, and CEO founder status. We used a dynamic panel data model with a large sample of Italian family firms over the period 2003–2012. Consistent with the theoretical framework of Hambrick and Fukutomi. Academy of Management Review, 16:719-742 (1991), we showed that CEO tenure has a concave relationship with entrepreneurial risk-taking. We step forward to understand whether this relationship is shaped by the number of family generations simultaneously involved in the firm and CEO founder status. We provided evidence that the impact of CEO tenure on risk-taking is strengthened if generational involvement in the business is high, and is inverted if the CEO is also the founder of the firm.

Good connections with rivals may weaken a firm’s competitive practices: The negative effect of competitor ties on market orientation practices and innovative performance

Cooperation with competitors has received considerable attention regarding both its positive and negative influences on innovative performance. However, as a possible underlying mechanism for the negative consequences of such cooperation, the role of market orientation has not been explored. Establishing and maintaining strong competitor ties (cooperative relationships with competitors) assumes the avoidance of conflicts with competitors. Thus, there is a possibility that such ties may lead the firm to attend less to market orientation practices as the ties weaken the firm’s competitive actions. With China as the research setting, our analyses show that strong competitor ties weaken the firm’s market orientation practices, causing its innovative performance to decline. Furthermore, the negative relationship between competitor ties and market orientation is contingent: This negative relationship is likely to occur except when the firm engages in high entrepreneurial risk-taking. Based on our theoretical rationales and empirical evidence for the underlying mechanism of the negative indirect effect of competitor ties on innovative performance, the present study raises several issues for both management scholars and practitioners.

A Study on Product Innovation Portfolio and Customer Value Creation: Bridging Entrepreneurial Risk-Taking Orientation and Marketing Performance

The aims of this study is to investigate the role of product innovation portfolio and customer value creation in bridging the gap of research entrepreneurial risk-taking orientation and marketing. Wood crafts firms that are in the city of Bandung, Yogyakarta and Solo which has been regarded as a creative city in Indonesia used as a sample. Sampling was done by using a combination of purposive sampling and convenience sampling . Data were collected using a questionnaire given directly to the respondent. The total data used for analysis about 172 respondents. Data analysis used in this research is Structural Equation Modeling ( SEM) with the AMOS program. The results show that product innovation portfolio serves as mediating on the relationship between entrepreneurial risk-taking orientation and marketing performance. Futhermore, the results also find that customer value creation has a positive effect on marketing performance. Normal 0 false false false IN X-NONE X-NONE

Buddhist entrepreneurs and new venture performance: the mediating role of entrepreneurial risk-taking

This study examines how Buddhism as an Eastern religion influences new venture performance. We propose that Buddhist values and associations can bring unique benefits to new ventures founded by Buddhist entrepreneurs and help improve new venture performance. We further advance that at least part of these religious benefits will be realized through an entrepreneurial risk-taking strategy, as reflected in research and development investment and debt financing. Analysis of a sample of 1032 entrepreneurs in China provides supportive evidence for our arguments. The study has implications for research on the relationships among religion, risk-taking, and performance, and on the differences between Eastern and Western religions.

Entrepreneurial risk taking: themes from the literature and pointers for future research

PurposeGiven the critical mass of literature on entrepreneurial risk-taking, the purpose of this paper is to assess the contribution to the knowledge so far by exploring important themes in the literature on entrepreneurial risk-taking.Design/methodology/approachThe review is organized around four themes: nature of entrepreneurial risk-taking; antecedents of entrepreneurial risk-taking; context of entrepreneurial risk-taking; and outcomes of entrepreneurial risk-taking. The author critically evaluates the literature on each theme and presents the pointers for future research.FindingsLiterature does provide a holistic view encapsulating different dimensions of entrepreneurial risk-taking, but it has produced largely inconsistent findings in terms of risk and gender, risk propensity of entrepreneurs in comparison to non-entrepreneurs and the outcomes of entrepreneurial risk-taking. Organizational antecedents, non-financial measures and ethical- and health-related consequences of entrepreneurial risk are underexplored. Inconclusive literature also implies that the risk may not be a distinguishing or important factor for undertaking an entrepreneurial endeavor. Therefore, it is pertinent to explore the critical factors entrepreneurs consider (or not consider) while marshalling their resources to embark on an entrepreneurial journey. This posits the need to explore an entrepreneur’s informal approach toward risk-taking.Originality/valueSuggested pointers of future research will potentially enhance the theoretical understanding of entrepreneurial risk-taking.

A realist philosophical understanding of entrepreneurial risk-taking

Purpose – The purpose of this paper is to utilise Vilfredo Pareto ' s Machiavellian-realist social theory to provide a distinctive realist philosophical understanding of entrepreneurial risk-taking. By doing so, this paper seeks to stimulate debate and encourage future empirical testing that has the potential to present a richer understanding of entrepreneurial risk-taking. Design/methodology/approach – To establish that a realist perspective can help theorise entrepreneurship, the authors look through a modern day risk and uncertainty optic at the hidden mechanisms within the social world where enterprises operate. Looking from this unique standpoint, where the long established social theory is reinvigorated by contemporary risk philosophy within a shared realist paradigm, human nature equips entrepreneurs with certain “animal spirits” to muddle blindly and instinctually through their risk environments. Findings – The paper argues that this combined perspective unlocks a much richer understanding of entrepreneurial risk-taking, in particular, by capturing more of its behavioural reality and despite our strong emphasis on the inaccessibility and hiddenness of the risk environment to the entrepreneur, by exploring the entrepreneur-risk environment fit in ecological terms. Originality/value – The paper’s unique blend of the classical Italian social theory with the contemporary risk theory offers a novel ecological view of the entrepreneur’s blind (mal) adaptation to their risk environment.

Entrepreneurial Risk-Taking in Crowdfunding Campaigns

This paper investigates sources of risk-taking in "reward-based" ("pre-purchase") crowdfunding campaigns. While crowdfunding helps entrepreneurs to obtain feedback on market demand (next to raising money), it may lead to project discontinuation if not enough money is raised during the campaign. This often leads entrepreneurs to raise more money to minimize project discontinuation. This effect is exacerbated when there is a risk that the idea is quickly replicated by others, leading to even higher fundraising goals but also to fewer projects offered on platforms. Conversely, the presence of professional investors (business angels, venture capitalists) reduces the entrepreneurs' incentives in their crowdfunding campaign, in part "crowding out the crowd" from the platforms, and thus affecting risk of failure. The optimal funding structure turns out to be a co-investment model that combines the crowdfunding and professional investors, supporting the notion that crowdfunding can complement rather than substitute existing investors.

Religious Orthodoxy and Entrepreneurial Risk-Taking

The relationship between entrepreneurship and religion is complex (Dana 2010), and religion can help or hamper the entrepreneurial process, depending on the context and culture (Dana 2009; Dodd and Gotsis 2007). This article examines religious orthodoxy and its connection to one aspect of the entrepreneurial process—risk-taking within existing organizations. Using multinomial logistic regression to analyze data from the 2010 Baylor Religion Survey, the researchers find that religious orthodoxy is negatively associated with entrepreneurial risk-taking, even after controlling for traditional variables associated with entrepreneurism. It supports the idea that beliefs—and not just adherence or behaviors—are important to understanding the connection between entrepreneurial processes and religion.

The Ambivalent Role of Risk-Taking Orientation in Uncertain Environments

Literature predominantly states that SMEs that embrace entrepreneurial risk-taking are likely to exhibit better export performance than those who don’t. However, such a view may be overly simplisti...

Imperfect Competition and Growth with Entrepreneurial Risk

Abstract This paper analyzes an overlapping generations endogenous growth model of occupational choice under risk in a two-sector economy with intermediate and final goods. Agents choose between business ownership in the monopolistically competitive intermediate goods industry or employment as a worker in this sector. Firm-specific profits are stochastic. Occupational choice under risk endogenizes the number of firms and products in the intermediate goods industry. The analysis shows that economic performance and growth both depend on the entrepreneurship rate and are inefficiently low compared with an economy with perfect markets for pooling risks. Monopolistic competition partly offsets the negative income effects from a too low level of entrepreneurial risk-taking.

Monopolistic competition and entrepreneurial risk-taking

Imperfect competition biases occupational choice towards firm ownership, thereby partly offsetting inefficiencies from absent risk-pooling markets. For increasing risk aversion, too many firms remain in the market, thus mutually deteriorating profits and possibly explaining the empirically observed low risk premiums on entrepreneurial income.

On the Effects of Redistribution on Growth and Entrepreneurial Risk-taking

This paper investigates the effects of redistributive taxation on occupational choice and growth. We discuss a two-sector economy in the spirit of Romer (1990). Agents engage in one of two alternative occupations: either self-employment in an intermediate goods sector characterized by monopolistic competition, or employment as an ordinary worker in this sector. Entrepreneurial profits are stochastic. The occupational choice under risk endogenizes the number of firms in the intermediate goods industry. While the presence of entrepreneurial risk results in a suboptimally low number of firms and depresses growth, nonlinear tax schemes can sometimes compensate negative effects by ex post providing social insurance.

Evaluation of Entrepreneurial Risk-Taking using Magnitude of Loss Scale

The importance of risk-taking in business ventures has been emphasised by many. Attempts to distinguish entrepreneurs on their risk-taking propensity have produced conflicting results. Data on two measures of risk-taking propensity were collected from entrepreneurs, prospective entrepreneurs and non-entrepreneur others. While the groups did not differ significantly on risk-taking propensity as measured by the Choice Dilemma Questionnaire, entrepreneurs and prospective entrepreneurs differed significantly from others on the Magnitude of Loss Questionnaire. Similarly, entrepreneurial aspirants differed significantly from the nonentrepreneur group. These results highlight the significance of loss, an important aspect in risk-taking, which is often ignored in entrepreneurial and managerial studies. The riskiness in business ventures which has been the main stumbling block for many is not the low probability of success but the high stakes involved in entrepreneurship.