When Do Entrepreneurs Learn from Others? A Contingent Approach to Social Influence

• In Event: 058 - Regular Session. Organizations: Networks and Innovation

Abstract

In this paper, I frame a contingent approach to social influence on entrepreneurship and empirically test the specifications about the contingencies. I first conceptualize entrepreneurship as a process of discovering and pursuing startup opportunities, I then theorize the conditions that amplify or reduce peer influence on entrepreneurship. The two conditions crucial for the occurrence of peer influence on entrepreneurship concern knowledge of and attitudes about entrepreneurship as individuals discover and evaluate startup opportunities. By analyzing a unique data set from Sweden between 1992 and 2002, my analyses demonstrate that the percentage of employees who have pervious startup experience also explains workplaces’ capability of spawning entrepreneurial activities. Established organizations are important source of entrepreneurship in capitalist societies, partially because they make it possible for individuals to move between employment and entrepreneurship and they mix together individuals with various previous experiences. My finding also shows that former entrepreneurs’ previous failures do not discourage their work peers’ entrepreneurial activities reveals a possible mechanism that explains the high failure rate of entrepreneurship. It seems that individuals are not learning about the low life chances of startups from others’ previous failures and information about negative entrepreneurial experiences does not flow as much as positive ones. Future research may investigate whether feedback from others’ negative entrepreneurial experience can be more effective for learning about how to succeed in creating new businesses.

Author

• Tiantian Yang, Duke University