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Do country level constructs affect the relation between self-efficacy and fear of failure?

Do country level constructs affect the relation between self-efficacy and fear of failure? This paper aims to show how country level constructs (investment protection, registration cost and legal protection) moderate the relationship between self-efficacy and fear of failure (FoF).Design/methodology/approachThe authors use global entrepreneurship monitor (GEM) data and augment it with country level data for 12 counties from different levels of economic development. The entrepreneurship literature has not yet addressed the micro/macro level influences on FoF to the best of the authors’ knowledge. This paper addresses this lacuna by using multilevel analysis by incorporating state influenced environment effects along with individual traits to explain this phenomenon.FindingsIt is shown that higher registration cost, higher degrees of investor protection and less legal protection diminish the effect of self-efficacy on FoF. Furthermore, the effects of the country-level factors outweigh the impact of the individual-level factors on FoF.Research limitations/implicationsOne of the issues discussed earlier was the construct validity of FoF, the wording of the question in GEM data is phrased such that FoF prevents you from starting a business; this means the response is avoidance. Had the question been worded positively, the responses may have varied. A better measure would have been an index with a scale the shows varying degrees of FoF. Another feature of GEM data is that the cohorts change every year, making it impossible to track the effect of closing a business on perceptual variables such as FoF and skill perception. This requires further scrutiny and analysis.Practical implicationsIt is noticed that there are regional differences in FoF country rates across various levels of economic development. The authors provide and explain by looking at how these constructs moderate the relation between skill perception and FoF. Thus, countries that have good investment protection may end up with better entrepreneurial activity rates due to mitigating the fear factor.Social implicationsEntrepreneurial activity rates can be increased by lowering the negative effect of FoF. This construct is known to be higher among females, which was typically thought to be an individual trait. This research also shows that legal and institutional constructs are actually more important in explaining FoF.Originality/valueThe contribution of this paper is that it addresses an acknowledged gap in the literature, in that it explains empirical findings that have not been explained before (at the level this paper does). http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Entrepreneurship in Emerging Economies Emerald Publishing

Do country level constructs affect the relation between self-efficacy and fear of failure?

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References (54)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
2053-4604
DOI
10.1108/jeee-06-2019-0076
Publisher site
See Article on Publisher Site

Abstract

This paper aims to show how country level constructs (investment protection, registration cost and legal protection) moderate the relationship between self-efficacy and fear of failure (FoF).Design/methodology/approachThe authors use global entrepreneurship monitor (GEM) data and augment it with country level data for 12 counties from different levels of economic development. The entrepreneurship literature has not yet addressed the micro/macro level influences on FoF to the best of the authors’ knowledge. This paper addresses this lacuna by using multilevel analysis by incorporating state influenced environment effects along with individual traits to explain this phenomenon.FindingsIt is shown that higher registration cost, higher degrees of investor protection and less legal protection diminish the effect of self-efficacy on FoF. Furthermore, the effects of the country-level factors outweigh the impact of the individual-level factors on FoF.Research limitations/implicationsOne of the issues discussed earlier was the construct validity of FoF, the wording of the question in GEM data is phrased such that FoF prevents you from starting a business; this means the response is avoidance. Had the question been worded positively, the responses may have varied. A better measure would have been an index with a scale the shows varying degrees of FoF. Another feature of GEM data is that the cohorts change every year, making it impossible to track the effect of closing a business on perceptual variables such as FoF and skill perception. This requires further scrutiny and analysis.Practical implicationsIt is noticed that there are regional differences in FoF country rates across various levels of economic development. The authors provide and explain by looking at how these constructs moderate the relation between skill perception and FoF. Thus, countries that have good investment protection may end up with better entrepreneurial activity rates due to mitigating the fear factor.Social implicationsEntrepreneurial activity rates can be increased by lowering the negative effect of FoF. This construct is known to be higher among females, which was typically thought to be an individual trait. This research also shows that legal and institutional constructs are actually more important in explaining FoF.Originality/valueThe contribution of this paper is that it addresses an acknowledged gap in the literature, in that it explains empirical findings that have not been explained before (at the level this paper does).

Journal

Journal of Entrepreneurship in Emerging Economies – Emerald Publishing

Published: Jul 31, 2020

Keywords: Entrepreneurship; Government policy and regulation; Risk and uncertainty; Behavioral psychology

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