Skip to main content
Log in

Giving second chances: the impact of personal attitudes of bankers on their willingness to provide credit to renascent entrepreneurs

  • Published:
International Entrepreneurship and Management Journal Aims and scope Submit manuscript

Abstract

Following recent public and scientific discussions on credit provision for entrepreneurs and credit management policies of banks, this study’s objective is to examine the effect of personal attitudes of bankers on their willingness to consider credit applications from renascent entrepreneurs. Previously, applications from renascent entrepreneurs were automatically rejected. Recently, more and more banks leave the evaluation of these applications to the bankers themselves. In the current study (n = 608) we use an attitudinal perspective to suggest how bankers’ entrepreneurial attitudes, their commitment to credit applications, their perceptions of bankruptcy (in terms of stigmatization and learning opportunities), and their past experience with credit provision to renascent entrepreneurs, influence their willingness to consider new credit applications from renascent entrepreneurs. Overall, results show that individual bankers extensively determine renascent entrepreneurs’ access to financial capital. Implications for banks’ credit provision policy toward renascent entrepreneurs, and for theory, and suggestions for future research are provided in the conclusion and discussion.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3

Similar content being viewed by others

References

  • Abdou, H., Pointon, J., & El-Masry, A. (2008). Neural nets versus conventional techniques in credit scoring in Egyptian banking. Expert Systems with Applications, 35(3), 1275–1292.

    Article  Google Scholar 

  • Aiken, L. S., & West, S. G. (1991). Multiple regression: Testing and interpreting interactions. Thousand Oaks: Sage Publications.

    Google Scholar 

  • Akhavein, J., Frame, W. S., & White, L. J. (2005). The diffusion of financial innovations: an examination of the adoption of small business credit scoring by large banking organizations. The Journal of Business, 78(2), 577–596.

    Article  Google Scholar 

  • Antoncic, B., & Hisrich, R. D. (2003). Clarifying the intrapreneurship concept. Journal of Small Business and Enterprise Development, 10(1), 7–24.

    Article  Google Scholar 

  • Argyris, C. (1985). Strategy, change and defensive routines. Marshfield: Pitman Publishing.

    Google Scholar 

  • Argyris, C., & Schön, D. (1974). Theory in practice: Increasing professional effectiveness. San Francisco: Jossey-Bass.

    Google Scholar 

  • Armour, J., & Cumming, D. J. (2008). Bankruptcy Law and entrepreneurship. American Law and Economics Review, 10(2), 303–350.

    Article  Google Scholar 

  • Åstebro, T., & Bernhardt, I. (2003). Start-up financing, owner characteristics, and survival. Journal of Economics and Business, 55(4), 303–319.

    Article  Google Scholar 

  • Athreya, K. (2004). Shame as it ever was: stigma and personal bankruptcy. FRB Richmond Economic Quarterly, 90(2), 1–19.

    MathSciNet  Google Scholar 

  • Attewell, P. (1992). Technology diffusion and organizational learning: the case of business computing. Organization Science, 3(1), 1–19.

    Article  Google Scholar 

  • Banasik, J., Crook, J., & Thomas, L. (2001). Scoring by usage. Journal of the Operational Research Society, 52, 997–1006.

    Article  MATH  Google Scholar 

  • Bandura, A. (1977). Self-efficacy: toward a unifying theory of behavioral change. Psychological Review, 84(2), 191.

    Article  CAS  PubMed  Google Scholar 

  • Barberis, N., & Thaler, R. (2005). A survey of behavioral finance in advances in behavioral finance, Volume II: Ed.), Barberis, Nicholas and Thaler, Richard, Princeton University Press.

  • Barrick, M. R. (2005). Yes, personality matters: moving on to more important matters. Human Performance, 18(4), 359–372.

    Article  Google Scholar 

  • Barron, F. (1955). The disposition toward originality. The Journal of Abnormal and Social Psychology, 51(3), 478.

    Article  CAS  Google Scholar 

  • Bentler, P. M., & Wu, E. J. (1995). EQS for windows user’s guide. CA: Multivariate Software Encino.

    Google Scholar 

  • Berger, A. N., & Frame, W. S. (2007). Small business credit scoring and credit availability*. Journal of Small Business Management, 45(1), 5–22.

    Article  Google Scholar 

  • Bettis, R. A. (1982). Risk considerations in modeling corporate strategy. Academy of Management Proceedings, 1, 22–25.

    Article  Google Scholar 

  • Bhide, A. (1999). Bootstap finance: The art of startup. In W. Sahlman & A. Bhide (Eds.), The Entrepreneurial Venture: Readings Selected (Vol. II, pp. 223–237). Harvard Business Press: Cambridge.

  • Brown, R. P., & Pinel, E. C. (2003). Stigma on my mind: individual differences in the experience of stereotype threat. Journal of Experimental Social Psychology, 39(6), 626–633.

    Article  Google Scholar 

  • Burgelman, R. A. (1983). A process model of internal corporate venturing in the diversified major firm. Administrative Science Quarterly, 28(2), 223–244.

    Article  Google Scholar 

  • Chiu, C., Hong, Y., & Dweck, C. S. (1997). Lay dispositionism and implicit theories of personality. Journal of Personality and Social Psychology, 73(1), 19.

    Article  CAS  PubMed  Google Scholar 

  • Cohen, J., Cohen, P., West, S. G., & Aiken, L. S. (2003). Applied multiple regression/correlation analysis for the behavioral sciences (Vol. 3). Mahwah: Lawrence Erlbaum Associates.

    Google Scholar 

  • Crutchfield, R. S. (1962). Conformity and creative thinking. Paper presented at the contemporary approaches to creative thinking. Co: University of Colorado.

    Google Scholar 

  • Dake, K. (1992). Myths of nature: culture and the social construction of risk. Journal of Social Issues, 48(4), 21–37.

    Article  Google Scholar 

  • De Bettignies, J.-E., & Brander, J. A. (2007). Financing entrepreneurship: bank finance versus venture capital. Journal of Business Venturing, 22(6), 808–832.

    Article  Google Scholar 

  • Degryse, H., & Van Cayseele, P. (2000). Relationship lending within a bank-based system: evidence from european small business data. Journal of Financial Intermediation, 9(1), 90–109.

    Article  Google Scholar 

  • Douglas, M., & Wildavsky, A. B. (1983). Risk and culture: An essay on the selection of technological and environmental dangers. Berkeley: University of California Pr.

    Google Scholar 

  • Dunham, R. B. (1984). Organizational behavior. Homewood: Irwin.

    Google Scholar 

  • Efrat, R. (1999). Fresh-start policy in bankruptcy in modern day Israel, the. American Bankruptcy Institute Law Review, 7(2), 555.

    MathSciNet  Google Scholar 

  • European_Commission. (1998). Fostering entrepreneurship in Europe. Brussels: European Commission.

    Google Scholar 

  • European_Commission, (2007). Overcoming the stigma of business failure—for a second chance policy implementing the Lisbon partnership for growth and jobs. Brussels: Commission of the European Communities.

    Google Scholar 

  • Evans, M. G. (1985). A Monte Carlo study of the effects of correlated method variance in moderated multiple regression analysis. Organizational Behavior and Human Decision Processes, 36(3), 305–323.

    Article  Google Scholar 

  • Fan, W., & White, M. J. (2003). Personal bankruptcy and the level of entrepreneurial activity. Journal of Law and Economics, 46(October), 543–567.

    Article  Google Scholar 

  • Feist, G. J. (1999). Autonomy and independence. Encyclopedia of Creativity, 1, 157–163.

    Google Scholar 

  • Finucane, M., Alhakami, A., Slovic, P., & Johnson, S. (2000). The affect heuristic in judgments of risks and benefits. Journal of Behavioral Decision Making, 13(1), 1–17.

    Article  Google Scholar 

  • Fishbein, M., & Ajzen, I. (1975). Belief, attitude, intention and behavior: An introduction to theory and research. Reading: Addison-Welsey Publishing.

    Google Scholar 

  • Folkeringa, M., & Vroonhof, P. (2004). Wordt De Spoeling Dun? Zoetermeer: EIM.

    Google Scholar 

  • Frame, W. S., Srinivasan, A., & Woosley, L. (2001). The effect of credit scoring on small-business lending. Journal of Money, Credit and Banking, 33(3), 813–825.

    Article  Google Scholar 

  • Goffman, E. (1963). Stigma: notes on a spoiled identity: Englewood cliffs. NJ: Prentice-Hall.

    Google Scholar 

  • Gosling, S. D., Rentfrow, P. J., & Swann, W. B., Jr. (2003). A very brief measure of the big-five personality domains. Journal of Research in Personality, 37(6), 504–528.

    Article  Google Scholar 

  • Grunert, J., & Norden, L. (2011). Soft information matters in SME lending. RSM Insight, 6(2), 10–11.

    Google Scholar 

  • Güttinger, V. A. (1984). Risicoperceptie en riskant gedrag in de arbeidssituatie: een onderzoek bij lassers. TNO: Organisatie voor Toegepast Natuurwetenschappelijk Onderzoek.

    Google Scholar 

  • Harman, H. H. (1967). Modernfactoranalysis (2nd ed.). Chicago: University of Chicago Press.

    Google Scholar 

  • Irwin, D., & Scott, J. M. (2010). Barriers faced by SMEs in raising bank finance. International Journal of Entrepreneurial Behaviour & Research, 16(3), 245–259.

    Article  Google Scholar 

  • Isen, A. M., & Baron, R. A. (1991). Positive affect as a factor in organizational-behavior. Research in Organizational Behavior, 13, 1–53.

    Google Scholar 

  • Jones, E., Farina, A., Hastorf, A. H., & French, R. (1984). Social stigma: The psychology of marked relationships. New York: WH Freeman.

    Google Scholar 

  • Jose, PE. 2013. ModGraph-I: A programme to compute cell means for the graphical display of moderational analyses: (Version Internet version 3.0). Wellington, New Zealand. : Victoria University of Wellington Retrieved from http://pavlov.psyc.vuw.ac.nz/paul-jose/modgraph/

  • Kasperson, R., Jhaveri, N., & Kasperson, J. X. (2001). Stigma and the social amplification of risk: Toward a framework of analysis. In J. Flynn, P. Slovic, & H. Kunreuther (Eds.), Risk, media, and stigma: Understanding public challenges to modern science and technology (pp. 9–27). London: Sterling: Earthscan.

    Google Scholar 

  • Kegan, R., & Lahey, L. L. (2001). The real reason people won’t change. Harvard Business Review, 79(10), 85–92.

    Google Scholar 

  • Kelley, D., Neck, H., O'Connor, G. C, & Paulson, A. (2005). Corporate entrepreneurship through radical innovation: key organization and initiative level mechanisms. In T. Elfring (Ed.), Corporate entrepreneurship and venturing (pp. 23–48). New York: Springer.

  • Klemann, M. (2011). Failliet, nog een kans op krediet? Amsterdam: Master of Science, VU University.

    Google Scholar 

  • Kraus, S. J. (1995). Attitudes and the prediction of behavior: a meta-analysis of the empirical literature. Personality and Social Psychology Bulletin, 21(1), 58–75.

    Article  MathSciNet  Google Scholar 

  • Krueger, N. F., & Brazeal, D. V. (1994). Entrepreneurial potential and potential entrepreneurs. Entrepreneurship Theory and Practice, 18, 91.

    Google Scholar 

  • Krueger, N. F., Jr., Reilly, M. D., & Carsrud, A. L. (2000). Competing models of entrepreneurial intentions. Journal of Business Venturing, 15(5), 411–432.

    Article  Google Scholar 

  • Landier, A. (2002). Entrepreneurship and the Stigma of Failure. Unpublished thesis. Mimeo, MIT.

  • Learned, K. E. (1992). What happened before the organization? a model of organization formation. Entrepreneurship Theory and Practice, 17, 39.

    Google Scholar 

  • Lee, S.-H., Peng, M. W., & Barney, J. B. (2007). Bankruptcy law and entrepreneurship development: a real options perspective. Academy of Management Review, 32(1), 257–272.

    Article  Google Scholar 

  • Lumpkin, G. T., & Dess, G. G. (1996). Clarifying the entrepreneurial orientation construct and linking it to performance. Academy of Management Review, 21(1), 135–172.

    Google Scholar 

  • Madsen, S. R., Miller, D., & John, C. R. (2005). Readiness for organizational change: do organizational commitment and social relationships in the workplace make a difference? Human Resource Development Quarterly, 16(2), 213–234.

    Article  Google Scholar 

  • Mair, J. (2008). Entrepreneurial behavior in a large traditional firm: exploring key drivers. In T. Elfring (Ed.), Corporate entrepreneurship and venturing (pp. 49–72). New York: Springer.

    Google Scholar 

  • March, J. G., & Shapira, Z. (1987). Managerial perspectives on risk and risk taking. Management Science, 33(11), 1404–1418.

    Article  Google Scholar 

  • McClelland, G. H., & Judd, C. M. (1993). Statistical difficulties of detecting interactions and moderator effects. Psychological Bulletin, 114(2), 376.

    Article  CAS  PubMed  Google Scholar 

  • McGrath, R. G. (1999). Falling forward: real options reasoning and entrepreneurial failure. Academy of Management review, 24(1), 13–30.

    Article  Google Scholar 

  • Metzger, G. 2006. Afterlife-who takes heart for restart? ZEW-Centre for European Economic Research Discussion Paper(06–038).

  • Metzger, G, & Niefert, M. 2006. Restart-performance and the returns of previous self-employment. Discussion Papers on Entrepreneurship, Growth and Public Policy (1806), 2006–2018.

  • Meyer, J. P. (2009). Commitment in a changing world of work. In H. J. Klein, T. Becker, & J. P. Meyer (Eds.), Commitment in organizations: Accumulated wisdom and new directions (pp. 37–68). Florence: Routledge/Taylor and Francis Group.

    Google Scholar 

  • Nasution, H. N., Mavondo, F. T., Matanda, M. J., & Ndubisi, N. O. (2011). Entrepreneurship: its relationship with market orientation and learning orientation and as antecedents to innovation and customer value. Industrial Marketing Management, 40(3), 336–345.

    Article  Google Scholar 

  • Oldfield, GS, & Santomero, AM. 1995. The place of risk management in financial institutions. Philadelphia: Wharton School, University of Pennsylvania.

  • Paetzold, R. L., Dipboye, R. L., & Elsbach, K. D. (2008). A new look at stigmatization in and of organizations. Academy of Management Review, 33(1), 186–193.

    Article  Google Scholar 

  • Podsakoff, P. M., MacKenzie, S. B., Lee, J.-Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: a critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879.

    Article  PubMed  Google Scholar 

  • Politis, D., & Gabrielsson, J. (2009). Entrepreneurs’ Attitudes towards failure: an experiential learning approach. International Journal of Entrepreneurial Behaviour & Research, 15(4), 364–383.

    Article  Google Scholar 

  • Rauch, A., & Frese, M. (2007). Let’s put the person back into entrepreneurship research: a meta-analysis on the relationship between business owners’ personality traits, business creation, and success. European Journal of Work and Organizational Psychology, 16(4), 353–385.

    Article  Google Scholar 

  • Rehoorn, W. (2006). April 19th. Abn Amro Wil Stigma Op Faillissementen. Telegraaf: Doorbreken.

    Google Scholar 

  • Santomero, A. M. (1997). Commercial bank risk management: an analysis of the process. Journal of Financial Services Research, 12(2–3), 83–115.

    Article  Google Scholar 

  • Sarasvathy, D., Simon, H. A., & Lave, L. (1998). Perceiving and managing business risks: differences between entrepreneurs and bankers. Journal of Economic Behavior & Organization, 33(2), 207–225.

    Article  Google Scholar 

  • Saxenian, A. (1996). Regional advantage: Culture and competition in silicon valley and route 128. Cambridge: Harvard University Press.

    Google Scholar 

  • Schuman, H., & Harding, J. (1963). Sympathetic identification with the underdog. Public Opinion Quarterly, 27(2), 230–241.

    Article  Google Scholar 

  • Semadeni, M., Cannella, A. A., Jr., Fraser, D. R., & Lee, D. S. (2008). Fight or flight: managing stigma in executive careers. Strategic Management Journal, 29(5), 557–567.

    Article  Google Scholar 

  • Shane, S. (2000). Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science, 11(4), 448–469.

    Article  Google Scholar 

  • Shepherd, D. A. (2003). Learning from business failure: propositions of grief recovery for the self-employed. Academy of Management Review, 28(2), 318–328.

    MathSciNet  Google Scholar 

  • Shepherd, D. A. (2004). Educating entrepreneurship students about emotion and learning from failure. Academy of Management Learning & Education, 3(3), 274–287.

    Article  Google Scholar 

  • Shepherd, D. A., Douglas, E. J., & Shanley, M. (2000). New venture survival: ignorance, external shocks, and risk reduction strategies. Journal of Business Venturing, 15(5), 393–410.

    Article  Google Scholar 

  • Shepherd, D. A., Wiklund, J., & Haynie, J. M. (2009). Moving forward: balancing the financial and emotional costs of business failure. Journal of Business Venturing, 24(2), 134–148.

    Article  Google Scholar 

  • Simmons, S., & Wiklund, J. (2011). Stigma and entrepreneurial failure: Implications for Entrepreneurs’ career choices. Working paper: Syracuse University.

    Google Scholar 

  • Sitkin, S. B. (1992). Learning through failure-the strategy of small losses. Research in Organizational Behavior, 14, 231–266.

    Google Scholar 

  • Sitkin, S. B., & Pablo, A. L. (1992). Reconceptualizing the determinants of risk behavior. Academy of Management Review, 17(1), 9–38.

    Google Scholar 

  • Sitkin, S. B., & Weingart, L. R. (1995). Determinants of risky decision-making behavior: a test of the mediating role of risk perceptions and propensity. Academy of Management Journal, 38(6), 1573–1592.

    Article  Google Scholar 

  • Slovic, P., Finucane, M. L., Peters, E., & MacGregor, D. G. (2007). The affect heuristic. European Journal of Operational Research, 177(3), 1333–1352.

    Article  MATH  Google Scholar 

  • Stam, E., Audretsch, D., & Meijaard, J. (2005). Entrepreneurial intentions subsequent to firm exit discussion papers on entrepreneurship, growth and public policy. Jena: Max Planck Institute.

    Google Scholar 

  • Stull, M. (2005). Intrapreneurship in nonprofit organizations: Examining the factors that facilitate entrepreneurial behaviour among employees. Cleveland: Case Western Reserve University.

    Google Scholar 

  • Sutton, R. I., & Callahan, A. L. (1987). The stigma of bankruptcy: spoiled organizational image and its management. Academy of Management Journal, 30(3), 405–436.

    Article  Google Scholar 

  • Thaler, R. H., & Johnson, E. J. (1990). Gambling with the house money and trying to break even: the effects of prior outcomes on risky choice. Management Science, 36(6), 643–660.

    Article  Google Scholar 

  • Thomas, L. C, Edelman, D. B., & Crook, J. N. (2002). Credit scoring and its applications -Monographs on Mathematical Modeling and Computation (Vol. 6) Philadelphia: Siam Publishing.

  • Timmons, J., Smollen, L., & Dingee, A. (1999). New venture creation. Irwin, Homewood: Richard D.

    Google Scholar 

  • Tsoumbris, P., & Xenikou, A. (2010). Commitment profiles: the configural effect of the forms and foci of commitment on work outcomes. Journal of Vocational Behavior, 77(3), 401–411. doi:10.1016/j.jvb.2010.07.006.

    Article  Google Scholar 

  • Vandello, J., Goldschmied, N., & Richards, D. (2007). The appeal of the underdog. Personality and Social Psychology Bulletin, 33, 1603–1616.

    Article  PubMed  Google Scholar 

  • Wakkee, I. 2013. Enduring effects or business as usual? Entrepreneurship after bankruptcy? Working Paper. VU University. Amsterdam.

  • Wakkee, I., Elfring, T., & Monaghan, S. (2010). Creating entrepreneurial employees in traditional service sectors the role of coaching and self-efficacy. International Entrepreneurship and Management Journal, 6(1), 1–21. doi:10.1007/s11365-008-0078-z.

    Article  Google Scholar 

  • Wiesenfeld, B. M., Wurthmann, K. A., & Hambrick, D. C. (2008). The stigmatization and devaluation of elites associated with corporate failures: a process model. Academy of Management Review, 33(1), 231–251.

    Article  Google Scholar 

Download references

Acknowledgements

The authors want to thank Marc Kuipers for his role in gaining access to and collecting data in the bank as well as the manager's of this bank for allowing and facilitating data collection.

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Ingrid Wakkee.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Wakkee, I., Sleebos, E. Giving second chances: the impact of personal attitudes of bankers on their willingness to provide credit to renascent entrepreneurs. Int Entrep Manag J 11, 719–742 (2015). https://doi.org/10.1007/s11365-014-0300-0

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11365-014-0300-0

Keywords

Navigation