Financial Optimism and Entrepreneurial Satisfaction

Research output: Contribution to journalArticle

Abstract

Research summary: Adding to the literature that optimists are attracted to entrepreneurship, this paper finds that prior financial optimism has detrimental consequences for entrepreneurial pay satisfaction. Optimists overestimate the likelihood of positive events and will therefore tend to overestimate their prospects in entrepreneurship. It follows that conditional on realized entrepreneurial performance; optimist’s subsequent pay satisfaction is lower through disappointment. These findings are consistent with theories of self-discrepancy from social psychology. Evidence is also provided that optimism reduces employee pay satisfaction, but since self-employment widens the scope for prospects to be exaggerated, the effects are stronger in self-employment. Whilst selection on optimism implies that entry into entrepreneurship is likely to be excessive, optimism by reducing entrepreneurial pay satisfaction may increase entrepreneurial exits.
LanguageEnglish
Pages171-194
JournalStrategic Entrepreneurship Journal
Volume11
Issue number2
Early online date10 Feb 2017
DOIs
StatusPublished - Jun 2017

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Pay satisfaction
Optimism
Entrepreneurship
Self-employment
Discrepancy
Entrepreneurial performance
Social Psychology
Exit
Disappointment
Employees

Cite this

Financial Optimism and Entrepreneurial Satisfaction. / Dawson, Christopher.

In: Strategic Entrepreneurship Journal, Vol. 11 , No. 2, 06.2017, p. 171-194.

Research output: Contribution to journalArticle

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