Fear not, want not: Untangling the effects of social cost of failure on high-growth entrepreneurship

Chong Kyoon Lee, Griffin W. Cottle, Sharon A. Simmons, Johan Wiklund

Research output: Contribution to journalArticlepeer-review

23 Citations (SciVal)


Prior research on the effect that formal and informal institutions have on high-growth entrepreneurship has tended to propose policies aimed at either lowering the social cost of failure in society, or creating business-friendly entry environments aimed at increasing the rate of entrepreneurship. These policies have triggered a debate about whether policies that focus on stimulating high-growth entrepreneurship conflict with policy goals aimed at decreasing the social cost of failure in society. Using approach/avoidance as a lens, we examine the relationship between high social costs of failure and the odds of individuals engaging in growth-based entrepreneurship. Our unique dataset captures the entry decisions of 208,089 individuals in 29 OECD countries. We find that while countries with a higher social cost of failure experience lower total entrepreneurial activity, they have higher odds of entrepreneurs having high-growth aspirations and firms with export-led orientations.

Original languageEnglish
Pages (from-to)531-553
Number of pages23
JournalSmall Business Economics
Issue number1
Early online date12 Feb 2020
Publication statusPublished - 30 Jun 2021


  • Entrepreneurship
  • High growth
  • Institutions
  • Regulations
  • Social costs of failure
  • Stigma

ASJC Scopus subject areas

  • General Business,Management and Accounting
  • Economics and Econometrics


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