Should I stay or should I go? Investigating entrepreneurial persistence

Entrepreneurial persistence is crucial for successful entrepreneurs as entrepreneurs encounter uncertain environments, frequent challenges, and setbacks (DeTienne et al., 2008c; Holland & Shepherd, 2013; Kier et al., 2022; Yamakawa & Cardon, 2017). Consequently, extensive research has been conducted to comprehend entrepreneurial persistence. Entrepreneurial persistence is defined as the “continuation of effortful action despite failures, impediments, or threats” (Holland, 2011a, p. 338) and has been traditionally regarded as a positive trait and a defining characteristic of successful entrepreneurs by most scholars in the field of entrepreneurship (Hodgetts & Kuratko, 2007; Markman & Baron, 2003; Wu et al., 2007). This study focuses on entrepreneurial persistence and aims to explore this critical element, as entrepreneurial persistence is important not only for entrepreneurs but also for firms, industry and the economy. This study seeks to identify the gaps in the existing literature and address these gaps by investigating the nature of entrepreneurial persistence.

The first paper (Chapter 2) presents a literature review to provide a holistic overview of the nature of entrepreneurial persistence and exit. This study applies a text-mining approach to limit potential subjective bias, which often occurs when data are coded manually. When comparing the existing literatures on entrepreneurial exit and persistence, the findings reveal multiple definitions of both exit and persistence at different levels, such as the firm and individual levels. These definitions vary in their understanding and application of the concepts of exit and persistence. Additionally, our analysis reveals that most studies have considered adversity as an intrinsic factor influencing entrepreneurial persistence and exit. Consequently, persistence as a trait has often been used interchangeably with persistence as a decision outcome. This observation highlights the need for further research in the realms of social cognitive theory and multi-level theory within entrepreneurial persistence and exit literatures.

The second paper (Chapter 3) introduces the concepts of cognitive style and the need for cognitive closure in the entrepreneurial persistence literature, with a particular focus on underperforming firms. This paper examines how the level of need for cognitive closure and cognitive style affect entrepreneurs’ persistence in decision-making while taking into account both retrospective and prospective factors that affect entrepreneurial persistence at both the individual and firm levels. The need for cognitive closure refers to the desire for a definite answer to a question to avoid uncertainty and ambiguity (Kruglanski & Webster, 1996). We employed a discrete choice experiment methodology involving a cohort of 177 entrepreneurs. The findings reveal that entrepreneurs with a high level of need for cognitive closure tend to place greater importance on retrospective firm-level factors, such as period and degree of underperformance, as well as retrospective and prospective individual-level factors, such as personal investment and options. In contrast, prospective performance factors, such as the risk of going into default and the potential for growth, were found to be relatively less significant for entrepreneurs with a high need for cognitive closure.

The third paper investigates the role of cognitive factors and motivational factors in entrepreneurial persistence. Previous studies in the field of entrepreneurial persistence have paid limited attention to cognitive factors, such as cognitive style. However, in these few studies, cognitive factors have typically been examined as moderators or mediators. Therefore, we still do not know how cognitive factors can affect entrepreneurial persistence. Drawing on the mindset theory of action phases, this study sheds light on how an entrepreneurial mindset plays a role in entrepreneurial persistence. According to the mindset theory of action phases, individuals’ intentions to persist are shaped by the volitional mental state and the motivational mental state. Volition refers to the strength of will (Gollwitzer, 2012) and is critical in understanding the pathway of entrepreneurial action (Gollwitzer & Heckhausen, 1987). A volitional mental state includes over-optimism and the illusion of control while engaging in actively open-minded thinking, which is a reasoning style that is commonly utilized to assess individuals’ rational thinking (Stanovich & West, 1997; Stanovich & West, 2007) and is a component of the motivational mental state (Keller & Gollwitzer, 2017). Moreover, the self-regulatory mode theory is applied in this study. Self-regulatory mode theory posits that individuals hold two distinct orientations: assessment and locomotion. The findings identify that locomotion orientation moderates the relationship between over-optimism and entrepreneurial persistence, whereas assessment orientation moderates the relationship between the illusion of control and entrepreneurial persistence. Actively open-minded thinking directly affects entrepreneurial persistence.

Overall, the three papers presented in this thesis contribute to the entrepreneurial persistence literature by providing novel theoretical explanations to better understand the nature of entrepreneurial persistence, its definition, and the determinants of this phenomenon. The findings have practical implications for entrepreneurs and policymakers seeking to develop and maintain their ventures.