Entrepreneurs Optimism And New Venture Performance A Social Cognitive Perspective

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ENTREPRENEURS’ OPTIMISM AND NEW VENTURE
PERFORMANCE: A SOCIAL COGNITIVE PERSPECTIVE
KEITH M. HMIELESKI
Texas Christian University
ROBERT A. BARON
Rensselaer Polytechnic Institute
Previous research indicates that entrepreneurs are generally high in dispositional
optimism—the tendency to expect positive outcomes even when such expectations are
not rationally justified. Findings of the current study demonstrate a negative relation-
ship between entrepreneurs’ optimismand the performance (revenue and employment
growth) of their new ventures. Past experience creating ventures and industry dyna-
mism moderated these effects, strengthening the negative relationship between entre-
preneurs’ optimism and venture performance. These findings illustrate the benefits of
applying a social cognitive perspective toward efforts to understand key aspects of the
new venture creation and development process.
Considering the substantial impact that new ven-
tures have on economic growth within most indus-
trialized nations (Sternberg & Wennekers, 2005), it
is fortunate that entrepreneurs pursue their dreams
of developing successful new ventures despite the
great odds against them (Dosi & Lovallo, 1997). The
fact that entrepreneurs decide to forge ahead in
the face of daunting obstacles suggests that they are
high in dispositional optimism and indeed, re-
search findings indicate that entrepreneurs score
particularly high on measures of this personal char-
acteristic (e.g., Abdelsamad & Kindling, 1978;
Fraser & Greene, 2006; Lowe & Ziedonis, 2006). For
example, Cooper, Woo, and Dunkelberg (1988)
found that entrepreneurs express high levels of op-
timism, regardless how prepared they are to lead
their firms. In addition, research by Busenitz and
Barney (1997) demonstrated that entrepreneurs
tend to overestimate the probability of being right
and overgeneralize from a few characteristics or
observations significantly more so than managers
of large, established organizations. Further sup-
porting the claim that entrepreneurs tend to view
the world through “rose-colored glasses,” Simon,
Houghton, and Aquino (2000) found that entrepre-
neurs commonly overemphasize the extent to
which their skills can increase performance in sit-
uations where chance plays a large role and skill is
not necessarily a deciding factor; further, they tend
to use a small number of information inputs as the
basis for drawing conclusions.
De Meza and Southey (1996) accounted for the
phenomenon of entrepreneurs being high in opti-
mism by arguing that, because individuals starting
new businesses have little evidence upon which to
base beliefs about likely success, those with unre-
alistic expectations are disproportionately attracted
into entrepreneurship. This line of reasoning is
consistent with research demonstrating that highly
optimistic individuals are confident of achieving
successful outcomes independently of being able to
visualize the path that will get them there—simply
believing that everything will work out favorably in
the end (Scheier, Carver, & Bridges, 2001).
A key question arising from the finding that en-
trepreneurs are generally high in optimism is this:
How does optimism relate to the performance of
their new ventures? Although it has been argued
that excessive optimism is a primary reason for the
high incidence of failure among start-ups (Gartner,
2005), few studies have investigated the relationship
between entrepreneurs’ optimism and the actual per-
formance of their new ventures. Further, existing ev-
idence suggests that high levels of optimism can
negatively affect judgment and decision making
(Aspinwall, Sechrist, & Jones, 2005; Åstebro, Jef-
frey, & Adomdza, 2007). Thus, optimism seems
likely to have important negative effects on the
strategic decisions made by lead entrepreneurs and
the performance of their new ventures.
Social cognitive theory (Bandura, 1986) provides
a useful theoretical framework for understanding
such effects. Specifically, social cognitive theory
suggests that the effects of personal dispositions
We would like to express our thanks to R. Duane
Ireland and three anonymous reviewers for their helpful
comments. In addition, we would like to thank Michael
S. Cole for his methodological suggestions.
? Academy of Management Journal
2009, Vol. 52, No. 3, 473–488.
473
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(including optimism) are often determined by their
interaction with important behavioral and environ-
mental factors (Wood & Bandura, 1989). As such,
the theory blends dispositional, behavioral, and en-
vironmental perspectives, thus providing a more
comprehensive framework for examining human
action and its outcomes than could be gained by
focusing on any of these levels and classes of vari-
ables independently. In this regard, social cognitive
theory provides a useful framework for undertaking
the task of identifying the mechanisms through
which individual dispositions ultimately influence
firm-level performance—a task that has been iden-
tified as crucial in recent years by many researchers
(e.g., Baron, 2007; Wright, Hmieleski, Siegel, & En-
sley, 2007).
The basic proposals of social cognitive theory are
also consistent with the multilevel perspective
highlighted by Hitt, Beamish, Jackson, and Mathieu
(2007). This perspective suggests that in order to
fully understand complex organizational processes
(including new venture development), it is essential
to examine variables operating at different levels of
analysis (e.g., individual, group, subunit, organiza-
tional, interorganizational, and environmental). In
the current study we adopt this perspective by
examining the joint effects of two individual vari-
ables—entrepreneurs’ optimism and their previous
experience in starting new ventures—and a key en-
vironmental variable: dynamism. Resting firmly
both on social cognitive theory and a multilevel
perspective, the current research was designed to
make several contributions. First, most empirical
research examining the effects of optimism is based
on the results of investigations conducted with var-
ious types of samples (e.g., college students, factory
workers). Although such samples offer important
advantages, they do not provide information per-
taining to effects that may occur at extreme levels of
this dimension. Thus, they do not relate directly to
entrepreneurs, who have been found to score very
high on measures of optimism (e.g., Fraser &
Greene, 2006; Lowe & Ziedonis, 2006). As we de-
scribe in more detail in the following section, very
high levels of optimism are likely to produce dif-
ferent effects than moderate levels and—more im-
portantly—there are strong theoretical grounds for
predicting that these effects will vary considerably
in different environments (for example, environ-
ments that are low or high in dynamism). Thus, the
present research provides new evidence concern-
ing the role of optimism in new venture develop-
ment and growth, processes that occur in a very
wide range of environments.
Second, in examining the effects of optimism, we
adopt a perspective suggested both by social cogni-
tive theory and the emerging multilevel perspective
in management research (Barden & Mitchell, 2007;
Hitt et al., 2007). Specifically, we recognize that the
effects of individual-level variables occur primarily
through interactions with key environmental fac-
tors. Prior research in both the fields of entrepre-
neurship (Shaver & Scott, 1991) and organizational
behavior (House, Shane, & Herold, 1996) has long
been criticized for failing to adopt such an ap-
proach. In response to such critiques, in the current
study we employed social cognitive theory, which
emphasizes the reciprocal relationships between
dispositional, behavioral, and environmental vari-
ables, as the basis for deriving predictions concern-
ing the mechanisms through which dispositional
optimism influences the performance of key organ-
izational decision makers (in this case, lead founders
of new ventures).
Third, following the spirit of Hambrick’s (2007)
assertion that organizational researchers must
balance theoretical with practical implications,
this study also addresses an issue we consider to
be of great importance: How best to coach or train
entrepreneurs so that they both recognize their
own tendencies to have high levels of optimism,
and are maximally able to convert these tenden-
cies into personal strengths that help them to
found, lead, and grow their new businesses. Such
findings are likely to contribute to the literature
linking the characteristics of top management to
firm performance. For example, much has been
written within this literature about the negative
effects of hubris (Hayward & Hambrick, 1997;
Hayward, Shepherd, & Griffin, 2006; Hiller &
Hambrick, 2005), which is a form of overconfi-
dence and a potential manifestation of extreme
optimism. However, to date, little empirical re-
search has been conducted to examine theoretical
arguments on this topic. Our results contribute to
this body of work by evaluating when such neg-
ative effects are most likely to occur (that is, at
varying levels of experience and dynamism).
THEORY AND HYPOTHESES
We begin this section by examining the potential
benefits and costs of entrepreneurial optimism.
Then, following suggestions derived from the so-
cial cognitive theory framework, we explore the
potentially moderating effects of key behavioral
(i.e., entrepreneurial experience) and environmen-
tal (i.e., environmental dynamism) variables with
respect to dispositional optimism.
474 June Academy of Management Journal
Entrepreneurs’ Optimism
Given the pervasiveness of optimism among en-
trepreneurs, we focus on dispositional optimism,
defined as generalized expectancies for experienc-
ing positive outcomes (Scheier et al., 2001). Re-
search has demonstrated that optimism tends to
remain relatively stable for individuals over time,
situation, and context (Schulman, Keith, & Seligman,
1993). Individuals high in optimism exhibit confi-
dence in a way that is both broad and diffuse, and it
encourages them to approach challenges with enthu-
siasm and persistence (Carver & Scheier, 2003). Re-
search findings indicate that as a result, individuals
high in optimism tend to experience better physical
and psychological well-being than individuals lowin
optimism (Peterson & Bossio, 2001).
Additional findings, however, have underscored
the fact that high levels of optimism can be linked
to negative outcomes. Highly optimistic individu-
als often hold unrealistic expectations, discount
negative information, and mentally reconstruct ex-
periences so as to avoid contradictions (Geers &
Lassiter, 2002). In contrast, individuals who are
moderate in optimism tend to possess a more bal-
anced view (Spencer & Norem, 1996). They are
more sensitive to negative information and less
likely to gloss over discrepancies (Spirrison &
Gordy, 1993), less easily persuaded by positive in-
formation (Geers, Handley, & McLarney, 2003), and
less likely to have an attentional bias in favor of
positive stimuli (Segerstrom, 2001), and they hold
more realistic expectations when engaging in high-
risk situations than those higher in optimism (Gib-
son & Sanbonmatsu, 2004). For these reasons, re-
search findings have suggested, overall, that high
levels of optimism often have significant detrimen-
tal effects on the judgment and decision making of
individuals. Considering the consistency of such
findings in the extant literature, it seems likely that
highly optimistic entrepreneurs may be prone to
make less than optimal strategic decisions.
Also of particular relevance to entrepreneurs,
positive expectations often lead to goal conflict, in
that optimists tend to see new opportunities every-
where they look (Segerstrom & Solberg Nes, 2006).
This tendency can generate significant problems
for individuals who cannot easily decide which
goals to pursue and therefore may become seriously
overextended as they seek to exploit more oppor-
tunities than is realistically feasible. In contrast,
moderate optimists tend to be more realistic in
their choice and pursuit of opportunities. This
moderation is important because entrepreneurs
must be able to decide which goals they can real-
istically accomplish early in the development of
their new ventures in order to maximize the poten-
tial for survival and long-term success (McMullen
& Shepherd, 2006).
In general, research findings indicate that on a
wide range of activities and tasks, optimism has a
curvilinear relationship with performance (Brown
& Marshall, 2001). Individuals who are very low in
optimism tend to lack motivation because they as-
sume that no matter how hard they try, failure is
likely to result. In addition, they have a propensity
to focus on negative information, which reinforces
their view that disaster awaits them. For these rea-
sons, they often attain relatively low levels of per-
formance. Moderate optimists tend to set moder-
ately high, yet realistic, goals and put forth the
necessary effort to reach their goals. These individ-
uals recognize a balance of positive and negative
cues within their environment, noting both the po-
tential benefits and risks associated with each de-
cision alternative. This more balanced approach
tends to make them above-average performers. Ex-
tremely optimistic individuals, in contrast, tend to
set unrealistically high goals and are overconfident
that their goals will be attained. Further, they focus
primarily on positive information, which supports
their belief that success is likely. These tendencies
often interfere with effective performance. As a re-
sult, they tend to attain only average levels of per-
formance in many contexts (Judge & Ilies, 2004).
Taken together, existing evidence suggests that
across many different tasks, performance increases
with task performers’ optimism, but only up to a
point; beyond this point, further increments in op-
timism actually generate reductions in perfor-
mance (Brown & Marshall, 2001). When this curvi-
linear relationship between optimism and per-
formance observed in the general population is
extended to entrepreneurs, an intriguing—and
counterintuitive—prediction emerges. Although
performance is positively related to optimism in
the general population, this relationship might well
tend to be negative for entrepreneurs, since they
range from moderately high to extremely high on
the optimism dimension (Abdelsamad & Kindling,
1978; Busenitz & Barney, 1997; Cooper at al., 1988;
Dosi & Lovallo, 1997; Fraser & Greene, 2006;
Lovallo & Kahneman, 2003; Lowe & Ziedonis, 2006;
Simon et al., 2000). Thus, they fall into the portion
of the optimism-performance function beyond the
inflection point (i.e., the downward-trending por-
tion). Following this logic and also reflecting pre-
viously discussed research regarding the negative
effects of optimism on judgment and decision mak-
ing (e.g., Geers et al., 2003; Gibson & Sanbonmatsu;
2004; Judge & Ilies, 2004; Segerstrom, 2001; Seger-
2009 475 Hmieleski and Baron
strom & Solberg Nes, 2006; Spirrison & Gordy,
1993), we propose the following hypothesis:
Hypothesis 1. Entrepreneurs’ level of disposi-
tional optimism is negatively related to the per-
formance of their new ventures.
Moderating Effects of Entrepreneurial Experience
The form of experience the entrepreneurship lit-
erature most commonly refers to is experience ac-
quired through having started multiple new ven-
tures (Wright, Westhead, & Sohl, 1998). Individuals
possessing such experience are often described as
habitual or repeat entrepreneurs. This type of ex-
perience typically offers benefits in terms of devel-
oping contacts (Danson, 1999), gaining knowledge
about obtaining the most appropriate sources of fi-
nancing (Starr & Bygrave, 1991), learning the mana-
gerial and technical skills necessary for leading new
ventures (Wright et al., 1998), and identifying how to
serve new and emerging market segments (Wright,
Robbie, & Ennew, 1997). Entrepreneurial experience
is also a primary mode for increasing one’s entrepre-
neurial self-efficacy, because it provides opportuni-
ties for “enactive mastery” and role modeling (Zhao,
Seibert, & Hills, 2005).
At first glance, one might assume that experience
would help to temper or counterbalance entrepre-
neurs’ high levels of optimism (Hayward, Shep-
herd, & Griffin, 2006). However, the fact that
entrepreneurs are, on average, relatively high in
optimism calls attention to two relevant points.
First, highly optimistic individuals tend to suffer
from a “confirmation bias” (Klayman & Ha, 1987),
focusing on information that supports or validates
their current beliefs while largely ignoring informa-
tion that is not consistent with these beliefs (Gibson
& Sanbonmatsu, 2004). Thus, even though experi-
enced entrepreneurs have more highly developed
frameworks for processing a wide range of informa-
tion than less experienced entrepreneurs (e.g.,
Baron & Ensley, 2006), those who are high in opti-
mism are likely to focus most on confirming infor-
mation. This, in turn, may result in overconfidence
on the part of experienced, highly optimistic entre-
preneurs—a tendency that, as Hayward and col-
leagues (2006) noted, may negatively affect the per-
formance and survival of new ventures. Second,
experienced entrepreneurs tend to have more op-
portunities available to themvia their more extensive
entrepreneurial networks and also possess richer cog-
nitive frameworks for processing such opportunities
than do novices (Ozgen & Baron, 2007). One result of
such an abundance of opportunities, especially for
highly optimistic entrepreneurs, may be competing
demands on their information-processing capacity—
a kind of “opportunity overload.” Since highly opti-
mistic entrepreneurs tend to expect positive out-
comes in many situations, such opportunity overload
may encourage experienced, highly optimistic entre-
preneurs to pursue more opportunities than they can
realistically manage. This tendency, in turn, has been
shown in previous research to be a major problem for
entrepreneurs, one that interferes with their ability to
build sustainable growth for their new ventures
(Baker & Nelson, 2005). On the basis of these consid-
erations and in the context of social cognitive theory,
we propose the following hypothesis:
Hypothesis 2. Entrepreneurial experience in
starting new ventures moderates the relation-
ship between the level of entrepreneurs’ dispo-
sitional optimism and the performance of their
new ventures: the relationship is more negative
for those with high, as opposed to low, entre-
preneurial experience.
Moderating Effects of Environmental Dynamism
Dynamic environments are characterized by un-
predictable and rapid change, which increases un-
certainty for individuals and firms operating
within them (Dess & Beard, 1984). It has been sug-
gested that environmental dynamism forms a fertile
context in which entrepreneurial opportunities
arise (Hayek, 1945; Kirzner, 1997; Shane & Venkat-
araman, 2000). Such environments, however, also
present major challenges. Because of high levels of
uncertainty and the large amount of financial cap-
ital (and associated risk) needed to compete (Al-
drich, 2000), entrepreneurs leading their firms in
dynamic environments often face unusually heavy
information processing burdens (Chandler, Honig,
& Wiklund, 2005). As a result, they may also expe-
rience high levels of distress and anxiety (Mark-
man, Baron, & Balkin, 2005). Optimism can help to
reduce such effects (Luthans & Youssef, 2004) but
can also lead to overconfidence or other cognitive
errors (Hayward et al., 2006) and hence, can nega-
tively affect judgment and decision making (Mc-
Kenzie, 1997), especially within dynamic environ-
ments (Klayman, Soll, Gonzalez-Vallejo, & Barlas,
1999). Therefore, we suggest that highly optimistic
entrepreneurs will be particularly poor at leading
their new ventures in dynamic, as opposed to sta-
ble, industry environments, because their attention
will lack the focus needed to respond quickly and
effectively to emerging opportunities. Further, their
discounting of negative information could be par-
ticularly damaging if it prevents them from making
the strategic changes necessary to respond effec-
476 June Academy of Management Journal
tively to competitors. For example, according to
uncertainty reduction theory, highly optimistic in-
dividuals will attune to the aspects of the environ-
ment that align most closely with their past expe-
rience to make sense of the uncertainty present
in dynamic environments (Berger & Gudykunst,
1991). Considering that optimistic individuals tend
to view both their past and future through rose-
colored glasses, they are likely to selectively map
an unbalanced mix of mostly positive information
from their past into a present situation and thus
make less than optimal decisions. In further sup-
port of this line of reasoning, optimism has been
found to be negatively related to situational aware-
ness, in such a way that highly optimistic persons
tend to be fairly ineffective at perceiving elements of
their environment, comprehending their meaning,
and projecting their status into the near-term future
(Eid, Matthews, Meland, & Johnsen, 2005). Consider-
ing the importance of rapidly identifying and inte-
grating key information when making strategic deci-
sions in fast-changing environments (Eisenhardt,
1989), highly optimistic entrepreneurs would appear
to be at a particular disadvantage in leading new
ventures in dynamic, as opposed to stable, industry
environments. On the basis of this reasoning and
again, in keeping with a general social cognitive per-
spective, we offer the following hypothesis:
Hypothesis 3. Environmental dynamism mod-
erates the relationship between the level of en-
trepreneurs’ dispositional optimism and the
performance of their new ventures: the rela-
tionship is more negative for those leading
their firms within dynamic, as opposed to sta-
ble, industry environments.
METHODS
Sample and Procedure
A national random sample of 1,000 new ventures
was drawn from Dun & Bradstreet for use in the
current study. Dun & Bradstreet compiles what is
considered to be the most exhaustive database of
young firms founded in the United States (Kalle-
berg, Marsden, Aldrich, & Cassell, 1990). The vast
majority of new ventures within the United States
must file for a DUNS number with Dun and Brad-
street to create a business credit record, which is a
primary way that companies evaluate whether to
do business with each other (for instance, whether
to sell, lend money, partner, or lease equipment).
Dun & Bradstreet provided the names and address
of the firms and their top management team leaders
(i.e., chief executive officers), who in each case was
also a firm founder.
A packet containing our survey, along with a
cover letter and prepaid business reply envelope,
was sent to the participants. In total, 185 of the
mailings were returned as nondeliverable, and 207
completed surveys were returned. The number of
nondeliverable survey mailings was not surprising
considering that Dun & Bradstreet reports that 20
percents of the firms that they track change their
address each year. Removal of six cases because of
incomplete performance data resulted in a total us-
able response rate of 24.8 percent, which is in align-
ment with those produced by other studies using
similar samples of top management (e.g., Hmieleski &
Ensley, 2007; Waldman, Ramirez, House, & Puranam,
2001). We examined nonresponse bias using t-tests
on top management team leader’s gender and firm
age, revenue, number of employees, and growth. In
each case the results were nonsignificant.
Demographic questions at the end of the admin-
istered survey confirmed that each respondent was
a founder and the top management team leader of
his/her firm. These participants included 163
males and 38 females, with an average age of 52
years. The highest educational degrees earned by
participants included high school (n ? 37), associ-
ate’s (n ? 18), bachelor’s (n ? 80), master’s (n ?
47), and doctoral (n ? 19). The mean age of the
firms studied was 5.74 years, which is in alignment
with research arguing that start-ups are in a critical
developmental stage during their first 6 years of
existence and may be considered new ventures
during this period (Shrader, Oviatt, & McDougall,
2000). Further, the first 6 years is a particularly
relevant time period in the development of a firm
within which to consider objective performance
outcomes such as revenue and employment
growth, whereas earlier on in the firm’s develop-
ment such factors may be less relevant.
Finally, the sample was broad in scope; partici-
pants’ current businesses were located in 40 different
states and had primary operations in 114 different
industries (as classified by four-digit Standard Indus-
trial Classification codes). Further, no more than four
firms were from the same state, and no more than
three firms were from the same industry. Thus, our
national sample is not biased by industry or geo-
graphic location.
Measures
Optimism. Optimism was measured using
Scheier et al.’s (1994) six-item Life Orientation
Test–Revised (LOT-R). Example items include, “In
uncertain times, I usually expect the best” and
“Overall, I expect more good things to happen to
me than bad” (1, “strongly disagree,” to 7, “strongly
2009 477 Hmieleski and Baron
agree”). We summed responses into an overall
score; high scores indicated a generalized feeling of
optimism about the future, and low scores indi-
cated a more pessimistic outlook. To investigate the
test-retest reliability of the LOT-R, Scheier and col-
leagues (1994) examined scores for four different
groups of individuals who completed the scale at
various time intervals. The test-retest intervals
were 4, 12, 24, and 28 months. The test-retest cor-
relations were .68, .60, .56, and .79, respectively.
Therefore, as expected for a dispositional measure,
the LOT-R appears to be fairly stable over time.
Finally, the measure produced a Cronbach’s coeffi-
cient alpha of .80 in the current study.
Entrepreneurial experience. Following prior re-
search, we measured entrepreneurial experience as
the number of previous ventures founded (Stuart &
Abetti, 1990). Specifically, a single survey item
asked respondents to report “the number of new
ventures started prior to the founding of your cur-
rent business.” Responses ranged from 0 to 6, with
nearly half of the respondents (n ? 91) having
previously founded a business. Whereas other
studies have dummy-coded the previous founding
of new ventures dichotomously as 0 or 1 (e.g., Coo-
per, Folta, & Woo, 1995; Forbes, 2005), we used the
actual number of new ventures started as our study
variable. This approach was taken because some
additional learning should take place each time an
entrepreneur starts another new venture (Zhao et
al., 2005). In other words, knowledge of the entre-
preneurial process should increase each time that
an individual proceeds through founding an addi-
tional new venture (Wright et al., 1998).
Environmental dynamism. We measured indus-
try-level rate of unpredicted change as the standard
errors of four regression slopes, following the work
of Dess and Beard (1984), Keats and Hitt (1988),
Sharfman and Dean (1991), and Castrogiovanni
(2002). In each case the independent variable was
time. The dependent variables were industry reve-
nues, number of industry establishments, number
of industry employees, and research and develop-
ment intensity. Industry revenue has been used as a
measure of uncertainty in prior studies (e.g., Keats
& Hitt, 1988; Sharfman & Dean, 1991), and number
of employees is a common measure of change for
use in research involving new businesses. The
number of establishments has been used by Aldrich
(1979) as the basis for understanding industry size
and the extent of industry change. Finally, indus-
trywide research and development intensity is a
variable that captures the speed of the technologi-
cal evolution of an industry (Castrogiovanni, 2002;
Dess & Beard, 1984).
Data on industry revenues, industry establish-
ment, and industry employment totals were ac-
quired through the U.S. Bureau of the Census. Re-
search and development intensity data were
acquired from the U.S. Patent Office. Following
Sharfman and Dean (1991), we regressed time
against these variables for the most recent ten-year
period. An index of the standard errors of the re-
gression slopes divided by their respective means
was used the indicator of unpredicted change for
each of the four variables. These figures were then
standardized and summed into an overall index of
environmental dynamism. To evaluate the extent to
which the four variables loaded onto a single di-
mension, we conducted a single-factor confirma-
tory analysis using AMOS 6.0. The chi-square for
the model was nonsignificant (?
2
? 2.35, p ? .13)
and results from absolute fit (GFI ? .99; SRMR ?
.04) and relative fit (CFI ? .98) indexes each dem-
onstrated good fit. The standardized factor loadings
ranged from .68 to .86. Further supporting the reli-
ability of the measure, the overall index produced a
Cronbach’s coefficient alpha of .69.
New venture performance. Growth is often
cited as the most important performance indicator
of new venture success (Brush & Vanderwerf, 1992;
Danson, 1999). In keeping with this literature, we
used two different objective measures of growth:
revenue growth and employment growth. The per-
formance data were obtained from Dun & Brad-
street. Recent studies have validated the accuracy
of Dun & Bradstreet revenue and employment data
for new ventures (e.g., Baum & Locke, 2004; Baum,
Locke, & Smith, 2001). The performance measures
were calculated as the average annual revenue and
employment growth over the two years immedi-
ately following the collection of the survey data.
We used lagged performance data in order to en-
hance our ability to draw causal inferences from
our results.
Control variables. Firm-level control variables
included the age of a firm, its revenue and employ-
ment totals for the year in which the survey data
were collected, and the average revenue and em-
ployment growth rates for the three years prior to
collection of survey data. Data for each of these
variables were acquired from Dun & Bradstreet. To
reduce the threat of multicollinearity, we standard-
ized and summed revenue and employment totals
for the year in which the survey data were collected
to create a variable labeled “firm size.” For the
same reason, the average revenue and employment
growth rates for the three years before collection of
our survey data were standardized and summed to
create a variable labeled “prior firm growth.” Indi-
vidual control variables included the sex (“male” ?
0, “female” ? 1), age (in years), and educational
478 June Academy of Management Journal
attainment (1 ? “high school,” 2 ? “associate’s
degree,” 3 ? “bachelor’s degree,” 4 ? “master’s
degree,” 5 ? “doctoral degree”) of respondents.
These data were collected as demographic items at
the end of the administered survey.
Statistical Procedures
Moderated hierarchical regression analysis was
utilized as the main statistical procedure for exam-
ining the relationship between entrepreneurs’ opti-
mism and new venture performance, as well as the
proposed moderating effects of entrepreneurial ex-
perience and environmental dynamism. We mean-
centered the variables before creating the interac-
tion terms and graphed each interaction following
procedures set forth by Dawson and Richter (2006).
RESULTS
Table 1 provides the means, standard deviations,
and bivariate correlations for study variables. Table
2 provides the results of the hierarchical regression
models for revenue and employment growth. The
interactions are graphed in Figures 1–3. We describe
results in relation to the individual hypotheses.
Hypothesis 1 proposed that entrepreneurs’ level
of dispositional optimism is negatively related to
the performance of their new ventures. As shown
in models 2 and 6 of Table 2, the relationships
between entrepreneurs’ optimism and the revenue
growth (? ??.17, p ?.05) and employment growth
(? ? ?.20, p ? .01) of their new ventures are both
significant and negative. Therefore, the findings
offer support for Hypothesis 1.
Hypothesis 2 suggested that entrepreneurial ex-
perience in starting new ventures moderates the
relationship between the level of entrepreneurs’
dispositional optimism and the performance of
their new ventures, such that the relationship will
be stronger (i.e., more negative) for those with high,
as opposed to low, entrepreneurial experience. As
shown in models 3 and 7 of Table 2, the interaction
of entrepreneurial experience with optimism is
significant and negative for both revenue growth
(? ? ?.15, p ? .05) and employment growth (? ?
?.22, p ?.01). The graph of this interaction (Figure
1) shows that the relationship between entrepre-
neurs’ optimism and the performance of their new
ventures is more negative for those with high, as
opposed to low, entrepreneurial experience. In fact,
there appears to be no relationship between opti-
mism and new venture performance for those with
low entrepreneurial experience. Therefore, results
support Hypothesis 2.
Hypothesis 3 stated that environmental dyna-
mism moderates the relationship between the level
of entrepreneurs’ dispositional optimism and the
performance of their new ventures, with the rela-
tionship being stronger (i.e., more negative) for
those leading their firms in dynamic rather than in
stable industry environments. As shown in models
3 and 7 of Table 2, the interaction of environmental
dynamism with optimism is significant and nega-
tive for both revenue growth (? ? ?.33, p ? .01)
and employment growth (? ? ?.34, p ? .01). The
graph of this interaction (Figure 2) shows that the
relationship between entrepreneurs’ optimism and
the performance of their new ventures is more neg-
ative for those leading their firms in dynamic, as
opposed to stable, industry environments. There-
fore, Hypothesis 3 too, receives support.
In addition to influencing the relationship be-
tween entrepreneurs’ optimism and new venture
performance individually, the social cognitive per-
spective suggests that environmental dynamism
TABLE 1
Descriptive Statistics and Correlations
a
Variable Mean s.d. 1 2 3 4 5 6 7 8 9 10
1. Firm age 5.74 2.43
2. Firm size 0.00 1.81 ?.08
3. Prior growth 0.00 1.93 ?.09 .35**
4. Age of entrepreneur 51.83 9.12 .07 .14* ?.08
5. Sex 0.19 0.40 .00 ?.12 ?.17* ?.20**
6. Education 2.97 1.17 .03 .11 ?.08 .10 .11
7. Optimism 5.87 0.90 ?.09 ?.10 ?.03 .16* .12 ?.03
8. Entrepreneurial experience 0.95 1.34 ?.08 .00 .05 .22** ?.12 ?.07 .21**
9. Dynamism 16.56 11.19 ?.04 .10 ?.04 .12 ?.04 .13 .02 .05
10. Revenue growth 1.79 1.65 ?.02 .09 .18** ?.05 ?.02 .09 ?.15* .06 .09
11. Employment growth 1.50 1.12 .02 .09 .11 ?.02 ?.04 .04 ?.19** .02 .10 .53**
a
n ? 201. For sex, male ? 0, female ? 1.
* p ? .05
** p ? .01
2009 479 Hmieleski and Baron
and entrepreneurs’ past experience in creating new
ventures may also exert joint effects on this rela-
tionship. In other words, these key behavioral and
environmental factors should act as moderators
concurrently—reciprocally enhancing the effects of
entrepreneurs’ optimism on the performance of
their new ventures. Therefore, in a post hoc analy-
sis, we examined the three-way interaction of opti-
mism, entrepreneurial experience, and dynamism
on new venture performance. As shown in models
4 and 8 of Table 2, the three-way interaction is
found to be significant and negative for both reve-
nue growth (? ?–.32, p ? .01) and employment
growth (? ?–.47, p ? .01). The graph of this inter-
action (Figure 3) indicates that the relationship be-
tween entrepreneurs’ optimism and the perfor-
mance of their new ventures is most negative when
entrepreneurial experience and environmental dy-
namism are both high. Thus, as a social cognitive
perspective suggests, these moderating variables
appear to operate jointly in influencing new ven-
ture performance.
DISCUSSION
The results of the current study suggest that en-
trepreneurs’ level of optimism has, on average, a
negative relationship with the performance of their
new ventures and that, moreover, both entrepre-
neurial experience and environmental dynamism
moderate this relationship. Specifically, the nega-
tive relationship between entrepreneurs’ optimism
and the performance of their new ventures is stron-
ger for experienced than for inexperienced entre-
preneurs, and stronger in dynamic than in stable
environments. In addition, there is some indication
(from our post hoc analysis) that the negative rela-
tionship between entrepreneurs’ optimism and the
performance of their new ventures is strongest
when entrepreneurs are high in previous business-
founding experience and lead their firms in
dynamic environments.
From a theoretical perspective, these findings
support the basic predictions of social cognitive
theory, which suggests that full understanding of
the impact of dispositional variables can only be
TABLE 2
Results of Hierarchical Regression Models of Revenue and Employment Growth
a
Variables
Revenue Growth Employment Growth
Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Model 7 Model 8
Firm control variables
Firm age .00 ?.01 .02 .01 .04 .03 .05 .04
Firm size .03 .00 ?.01 .01 .06 .03 .01 .04
Prior growth .17* .18* .19* .19* .09 .10 .10 .10
Individual control variables
Age ?.05 ?.04 ?.06 ?.07 ?.03 ?.01 ?.03 ?.05
Sex ?.01 .03 .07 .06 ?.03 .01 .05 .04
Education .10 .09 .08 .06 .04 .03 .01 .02
Main effects
Optimism ?.17* ?.20** ?.20** ?.20** ?.25** ?.25**
Entrepreneurial experience .10 .17* .23** .06 .16* .24**
Dynamism .09 .14 .22** .10 .16* .28**
Two-way interactions
Optimism ? experience ?.15* ?.16* ?.22** ?.24**
Optimism ? dynamism ?.33** ?.40** ?.34** ?.45**
Experience ? dynamism .10 .33** .12 .46**
Three-way interaction
Optimism ? experience ? dynamism ?.32** ?.47**
F 1.54 1.86 3.66** 4.25** 0.64 1.48 3.90** 5.66**
R
2
.05 .08 .19 .23 .02 .07 .20 .28
Adjusted R
2
.02 .04 .14 .17 .00 .02 .15 .23
a
Standardized coefficients are shown. n ? 201.
* p ? .05
** p ? .01
480 June Academy of Management Journal
gained through careful consideration of the inter-
action between such variables and key behavioral
and environmental factors (Bandura, 1986). In ad-
dition, results are consistent with the view that a
multilevel perspective is essential in all branches
of management science for continued refinement of
researchers’ knowledge base and theoretical mod-
els and for fuller understanding of complex organ-
izational processes (Hitt et al., 2007).
Entrepreneurs’ Optimism and Firm Performance:
Is the Relationship Always Negative?
Overall, the findings of the present research sug-
gest that entrepreneurs’ dispositional optimism is
negatively related to firm performance. As noted
earlier, there are strong grounds for predicting such
a relationship. Highly optimistic individuals often
hold unrealistic expectations, suffer from overcon-
fidence, and discount negative information—ten-
dencies that can seriously interfere with their de-
cision making and judgment (Geers & Lassiter,
2002; Segerstrom & Solberg Nes, 2006). The present
results indicate that such effects may indeed oper-
ate among entrepreneurs and combine to exert a
negative influence on new venture performance.
It is important to note, however, that other evi-
dence suggests that high levels of optimism some-
times yield important benefits. These include en-
hanced ability to form coalitions and lasting
FIGURE 1
Interaction Effect of Dispositional Optimism with Entrepreneurial Experience on Revenue Growth
a
–1
–0.5
0
0.5
1
Optimism
Revenue
Growth
Low
entrepreneurial
experience
High
entrepreneurial
experience
–1 s.d. +1 s.d.
a
The interaction graph for employment growth follows the same pattern as the above.
FIGURE 2
Interaction Effect of Dispositional Optimism with Environmental Dynamism on Revenue Growth
a
–1
–0.5
0
0.5
1
Optimism
Revenue
Growth
Low
environmental
dynamism
High
environmental
dynamism
–1 s.d. +1 s.d.
a
The interaction graph for employment growth follows the same pattern as the above.
2009 481 Hmieleski and Baron
friendships (Fredrickson, 2001), increased resis-
tance to prolonged, intense stress (Tugade &
Fredrickson, 2004), greater persistence in the face
of adversity (Markman et al., 2005), and enhanced
ability to develop extensive social networks (Greve
& Salaff, 2003). Several of these skills or capaci-
ties—especially the ability to develop extensive
social networks—have been shown to be important
predictors of entrepreneurial performance (e.g., Oz-
gen & Baron, 2007). Thus, although the present
findings clearly indicate a negative relationship be-
tween entrepreneurs’ optimism and new venture
performance, it seems premature to conclude that
the relationship between these variables is always,
or uniformly, negative. In fact, two points suggest
that the relationship between these variables may
be complex and possibly, curvilinear.
First, entrepreneurs in general, and certainly the
entrepreneurs who participated in the present
study, tend to be very high in optimism (e.g., Ab-
delsamad & Kindling, 1978; Busenitz & Barney,
1997; Cooper at al., 1988; Dosi & Lovallo, 1997;
Fraser & Greene, 2006; Lovallo & Kahneman, 2003;
Lowe & Ziedonis, 2006; Simon et al., 2000). In fact,
the entrepreneurs in the current sample scored very
high on the measure of optimism we employed
(mean ? 5.87)—higher, in fact, than participants
drawn from a wide range of different populations
in previous research who completed the same mea-
sure (e.g., Armstrong-Stassen, 2006; Aspinwall et
al., 2005). Second, the findings of many previous
studies indicate that the relationship between op-
timism and individual performance is curvilinear
in a wide variety of tasks and populations (e.g.,
Brown & Marshall, 2001). Performance initially
rises as optimism increases, but beyond some
point, further increments in optimism are associ-
ated with actual decrements in performance. Tak-
ing these two facts into account, we suggest that the
same principle may operate with respect to entre-
preneurs. The relationship between optimism and
new venture performance may be positive up to
moderate levels of optimism, but beyond this point,
may become negative. This reversal may occur be-
cause when optimism reaches very high levels,
entrepreneurs may fail to assess potential oppor-
tunities carefully, show a strong preference for
heuristic decision making (a procedure that is often
ineffective in dynamic environments [Sarma´ny,
1992]), and come to experience high levels of over-
confidence. As Hayward et al. (2006) noted, this
latter factor, in particular, may adversely affect new
venture performance. Although it is always diffi-
cult (and fraught with uncertainty) to move from
measures of individual performance to measures of
firm performance, we tentatively suggest that very
high optimism encourages tendencies among entre-
preneurs (e.g., overconfidence) that interfere with
their performance of key tasks (e.g., full assessment
of potential opportunities) and hence, adversely
affects the success of their new ventures.
Only future research can fully examine these and
related possibilities. However, the present findings
do suggest quite clearly that among entrepreneurs,
FIGURE 3
Interaction Effect of Dispositional Optimism with Entrepreneurial Experience and
Environmental Dynamism on Revenue Growth
a
–1
–0.5
0
0.5
1
1.5
2
Optimism
Revenue
Growth
(1) High
experience, high
dynamism
(2) High
experience, high
dynamism
(3) Low
experience, high
dynamism
(4) Low
experience, low
dynamism
–1 +1 s.d.
(1)
(2)
(3)
(4)
s.d.
a
The interaction graph for employment growth follows the same pattern as the above.
482 June Academy of Management Journal
the potential costs of high optimism may often out-
weigh any potential benefits of such a disposition.
Put in other terms, very high levels of optimism
may indeed constitute too much of a good thing
where entrepreneurs are concerned and may adversely
influence the performance of their new ventures.
The Effects of Entrepreneurial Experience and
Environmental Dynamism
The link between entrepreneurial experience and
new venture performance is an intuitive connec-
tion and one that has been frequently assumed to be
positive (Wright et al., 1998). Empirical evidence
concerning this relationship has, however, gener-
ally been less than robust (Carter & Ram, 2003). The
lack of significant findings regarding this relation-
ship in past research may be due, in part, to the fact
that entrepreneurs differ greatly in terms of the
degree to which they learn from their experience,
and optimism may influence the efficiency of such
learning. For example, entrepreneurs who are
highly optimistic are likely to learn less from their
experience than ones who are moderate in opti-
mism, given the tendency of the first group to focus
primarily on positive, belief-confirming informa-
tion. This line of reasoning is supported by previ-
ous research examining the important role that en-
trepreneurs’ cognitive frameworks play in their
ability to transform information from their past
experience into knowledge that helps them to
identify and exploit entrepreneurial opportunities
(Corbett, 2005, 2007). Considering that highly opti-
mistic entrepreneurs are cognitively predisposed to
undervalue new or dissenting information, they are
likely to learn less from their past experience than
more moderately optimistic entrepreneurs. This
may partly explain why we found entrepreneurial
experience to exacerbate the negative relationship
between optimism and new venture performance—
suggesting that entrepreneurs who are moderate
optimists might be more effective at learning from
their past experiences than those who are very high
in optimism.
Similarly, although some have suggested a posi-
tive link between environmental dynamism and
new venture performance (Kirzner, 1997), there is
relatively little empirical support for such a rela-
tionship. Even though the potential for achieving
major success may be greater in dynamic industries
than in stable ones, the chance of failure is also
greater (Markides & Geroski, 2004). Thus, the ef-
fects of the few who succeed may be offset by a
considerably greater number of relatively poor per-
formers. In contrast, within stable environments
there is a better chance of long-term survival, but
less opportunity for impressive gains. As our re-
sults show, certain dispositional and behavioral
characteristics (for example, moderate optimism
coupled with high entrepreneurial experience) may
increase the odds of entrepreneurs successfully
leading their new ventures within dynamic indus-
try environments.
In sum, we believe that the design of our study,
which applies social cognitive theory to entrepre-
neurship and adopts the contextual perspective
recommended by Hitt et al. (2007), helps shed new
light on why extant research has not clearly and
definitively verified intuitively appealing relation-
ships between entrepreneurial experience and en-
vironmental dynamism on the one hand, and new
venture performance on the other. We suggest that
this lacuna exists primarily because these linkages
are more complex than previously believed and
are, in fact, contingent on moderating factors (such
as the ones examined in the current study).
Implications for Entrepreneurship Educators
and Practitioners
The results of the current study offer support for
Lovallo and Kahneman’s suggestion that “there
needs to be a balance between optimism and real-
ism—between goals and forecasting. Aggressive
goals can motivate the troops and improve the
chances for success, but outside-view forecasts
should be used to decide whether or not to make a
commitment in the first place” (2003: 63). A natural
conclusion would be to suggest that lead entrepre-
neurs, who are by nature often highly optimistic,
may benefit from adding top management team
members who are more moderate in optimism than
themselves (Hayward et al., 2006). This is, how-
ever, more easily said than done. Decades of re-
search in several fields clearly demonstrate that
similarity is a powerful determinant of liking and
forming positive personal relationships (e.g.,
Baron, Branscombe, & Byrne, 2008). Accordingly,
optimistic persons prefer to work with individuals
similar to themselves on this dimension (Hiller &
Hambrick, 2005). Moreover, if the members of top
management teams differ considerably in terms of
optimism, this situation can generate conflict and
dysfunctional management. We suggest, therefore,
that a more effective approach may be to train
entrepreneurs to self-regulate their optimism in
ways that permit them to be realistic as well as
positive—to recognize when they need to constrain
their enthusiasm and when they can move more
energetically. In other words, the development
of appropriate metacognitive and self-regulatory
mechanisms may be crucial, for it may be those
2009 483 Hmieleski and Baron
entrepreneurs who are best able to regulate and
direct their own intrinsic optimism who are most
likely to achieve the success that they seek. In so
doing, entrepreneurs should pay particular atten-
tion to how their inherent levels of optimism inter-
act with their experience and environment to influ-
ence their ability to achieve successful outcomes.
Limitations and Suggestions for Future Research
Several limitations to the current study suggest
opportunities for future research. First, although
our findings uncovered contextual differences in
the relationship between optimism and new ven-
ture performance, we did not examine the under-
lying mechanisms through which such effects oc-
curred. Therefore, future research might address,
for example, the use of heuristic versus systematic
decision-making processes by entrepreneurs as
pathways mediating such effects. Because high lev-
els of optimism tend to be related to heuristic de-
cision making and lower levels of optimism tend to
be related to systematic decision making (Scheier et
al., 2001), and because repeat entrepreneurs tend to
rely more heavily on intuitive modes of thinking
than novice entrepreneurs (Brigham, De Castro, &
Shepherd, 2007; Buttner & Gryskiewicz, 1993), this
may prove to be a particularly fruitful extension to
the current study. Further, additional behavioral
factors, such as improvisation (Hmieleski & Cor-
bett, 2006), and other environmental factors, such
as munificence (e.g., Sharfman & Dean, 1991), may
be worth investigating in combination with the ef-
fects of optimism.
Second, previous studies of entrepreneurs have
failed to identify significant linkages between per-
formance and personal satisfaction (e.g., Brigham et
al., 2007; Hmieleski & Corbett, 2008). Identifying
such links would be particularly relevant for stud-
ies of entrepreneurs’ optimism, because optimism
has generally been found to be positively related to
work satisfaction (Youseff & Luthans, 2007); but as
the present results show, it appears to be negatively
linked to performance among entrepreneurs. Fu-
ture studies of entrepreneurs’ optimism might em-
brace efforts to evaluate what configurations of op-
timism with other behavioral and environmental
factors simultaneously maximize both performance
and satisfaction.
Third, the specific nature of our sample (entre-
preneurs leading new ventures) limits the extent to
which our findings can be generalized to other
groups of individuals and organizations. As noted
earlier, entrepreneurs tend to range from moderate
to very high in optimism (Abdelsamad & Kindling,
1978; Busenitz & Barney, 1997; Cooper et al., 1988;
de Meza & Southey, 1996; Fraser & Greene, 2006;
Lowe & Ziedonis, 2006; Simon et al., 2000). There-
fore, our results are not informative about popula-
tions in which optimism is considerably lower.
Although we have no strong reason to assume that
similar findings would not occur for leaders in
other types of firms who are moderately to highly
optimistic, research has shown that the optimal
characteristics of leaders vary with a firm’s evolu-
tionary stage (Smith & Miner, 1983). For example,
high optimism might be more beneficial than mod-
erate optimism during the idea generation stage of
the new venture creation process. Therefore, it
seems important to examine the relationships ex-
plored in the current study longitudinally over var-
ious stages in the organizational life cycle. Follow-
ing this approach might necessitate adoption of
other performance measures that are more applica-
ble to a given type of firm and a given stage of firm
development. Such research should, insofar as pos-
sible, track the development of firms from their
initial founding so as to avoid survival bias.
Finally, the cross-sectional design of the current
study limits our ability to make causal inferences
about the observed relationships. The fact that our
performance data were lagged from the time period
in which the data for the independent variables
were collected does support our case for causality.
Such arguments would, however, be made stronger
in future studies if both the independent and out-
come variables were measured on multiple occa-
sions over time. Such multiple measurement
would also allow for a more comprehensive test of
social cognitive theory by presenting the opportu-
nity to examine the bidirectional relationships be-
tween the variables studied.
Conclusions
Early investigation of the potential role of entre-
preneurs’ personal dispositions in new venture cre-
ation and development failed to provide clear or
consistent findings (Gartner, 1989). Many factors
contributed to these disappointing results, includ-
ing inadequate operationalization and measure-
ment of variables, lack of attention to relevant the-
oretical frameworks, and relatively little focus on
the crucial task of linking these microlevel vari-
ables to overt actions by entrepreneurs or to firm
performance (Low & MacMillan, 1988). In contrast,
more recent research focusing on the personal char-
acteristics of entrepreneurs (or, more broadly
speaking, individual-level variables such as the
skills, motives, experience, attitudes, and other
characteristics of individual entrepreneurs) has
been based on well-established theoretical frame-
484 June Academy of Management Journal
works and employed carefully chosen measures
and improved research designs (e.g., Baum et al.,
2001; Hmieleski & Baron, 2008; Zhao et al., 2005).
The resulting findings provide evidence that sev-
eral individual-level variables do indeed matter:
they are significantly related to new venture per-
formance (e.g., Baron, 2007, 2008). Despite these
advances, however, the amount of variance in new
venture performance explained by such variables
has continued to be small (Davidsson, Low, &
Wright, 2001). This seems to be partly due to the
fact that many studies still seek to identify global
characteristics that differentiate successful from
less successful entrepreneurs. We suggest that a
more fruitful approach may be to examine the in-
teractions between individual-level variables and
both behavioral and environmental moderating
variables, thus applying a social cognitive perspec-
tive. Such an approach fully reflects the nature of
modern research on the role of microlevel variables
in several branches of management (e.g., organiza-
tional behavior, human resource management). In
these fields, it is widely recognized that factors
relating to the skills, motives, experience, and char-
acteristics of individuals do indeed influence
work-related behavior and, hence, important organ-
izational outcomes. However, it is also recognized
that such effects are rarely direct; rather, more fre-
quently other variables relating to the tasks that
individuals perform and the environments in
which they operate moderate these effects. Adopt-
ing this broader perspective in order to more fully
understand the role of individual entrepreneurs in
new venture performance may greatly facilitate
progress toward a central goal of the field of entre-
preneurship: accurate comprehension of the com-
plex process, involving many different factors op-
erating at many different levels, through which
enterprising entrepreneurs conceive, launch, and
operate new ventures. In somewhat broader terms,
we hope that the present findings encourage ongo-
ing efforts to incorporate a multilevel approach into
entrepreneurship research—an approach aimed at
gaining understanding of the complex interplay be-
tween individual, organizational, and environmen-
tal variables in new venture performance (Hitt et
al., 2007). In our view, such research is crucial, for
it is this complex, reciprocal interchange that ulti-
mately shapes the survival and fortunes of
new ventures.
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Keith M. Hmieleski ([email protected]) is an assistant
professor of management in the M. J. Neeley School of
Business at Texas Christian University. He received his
Ph.D. from Rensselaer Polytechnic Institute. His research
focuses on psychological and behavioral aspects of the
new venture creation and development process.
Robert A. Baron ([email protected]) is Bruggeman Profes-
sor of Entrepreneurship in the Lally School of Manage-
ment and Technology at Rensselaer Polytechnic Univer-
sity. He received his Ph.D. from the University of Iowa.
His current research focuses on social and cognitive fac-
tors in entrepreneurship.
488 June Academy of Management Journal

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