Failing role models and the formation of fear of entrepreneurial failure: a study of regional peer effects in German regions. (14th May 2018)

• Record Type: Journal Article
• Authors: Wyrwich, Michael; Sternberg, Rolf; Stuetzer, Michael
• Is Part Of: Journal of economic geography. Volume 19:Number 3(2019)
• Page Start: 567
• Page End: 588
• Publication Date: 2018-05-14
• Subjects: Entrepreneurial failure -- role models -- peer effect -- Global Entrepreneurship Monitor -- entrepreneurship; D01 -- L26 -- M13; Economic geography -- Periodicals; 330.9
• DOI: 10.1093/jeg/lby023
• Languages: English
• ISSNs: 1468-2702

Abstract

Abstract: Entrepreneurial role models influence decisions to start firms. This effect is even stronger if peers and observers live in the same region. However, most studies remain silent about the role of entrepreneurial failure for the direction of role modeling. Failed role models can trigger a deterrence of entrepreneurship in others of the same region. We hypothesize that observing successful entrepreneurs reduces fear of failure, while observing business failure increases fear of failure. By using data on regional entries and exits, we find considerable support for our hypothesis and contribute to literature on regional entrepreneurship.