Abstract
We examine how failure ascriptions (how the core causal characteristics of a failure are identified) impact perceptions of learning, defined here as the ability to transfer knowledge from a failed venture to a subsequently started new venture. Our findings are consistent with prior work in that internal unstable failure ascriptions are associated with greater perceived learning, while external stable ascriptions are associated with less perceived learning. Inconsistent with prior work, however, we find that starting a new venture more quickly after failure enhances perceived learning for entrepreneurs who made internal unstable ascriptions. Further, entrepreneurs with external stable ascriptions have even less perceived learning when they abandon their previous domain in their new venture. Implications for research on failure, ascriptions, and perceived learning for future ventures are discussed.
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Notes
The majority of work on entrepreneurial learning has relied on self-reported data (De Clercq and Sapienza 2005), which some scholars suggest does not reflect “real” learning (Frankish et al. 2013). We take a broad view of entrepreneurial learning as a process through which entrepreneurs experience, reflect, think, and act (Bailey 1986).
We note, however, that Parker (2013) found no evidence of performance differences in serial entrepreneurship for those who start ventures in the same industry versus a different industry.
Data for this secondary analysis were provided by the Social Science Japan Data Archive, Information Center for Social Science Research on Japan, Institute of Social Science, The University of Tokyo.
Respondents were also asked the ways in which the learning from failure was applicable to their subsequent ventures. Out of all respondents, 35 % of them referred to customer development (and marketing related) issues, 32 % of them raised product/service development issues, 26 % of them mentioned issues related to cost reduction, and 24 % of them referred to financing issues (among other factors).
For example, internal unstable causes of failure include lack of entrepreneurial skills, lack of managerial know-how, and lack of financial planning. External stable causes of failure include competition and environmental uncertainty.
We also used another variable “time to ‘decide’ to start up another business” which represents the length of time (in months) from when respondents exited their previous businesses until they “decided” to found their current business—to capture recovery in a more emotional sense. Results are qualitatively similar.
We also tested our model with the actual monetary value of debt, and results are qualitatively similar to our main findings, due to missing variables; however, the sample size was reduced from N = 220 to N = 99 when the actual monetary value of debt was used.
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We thank David Deeds and Mike Peng for their input on the conceptual foundation of the article. We would also like to thank Candida Brush and the seminar participants at Babson College, Andrew Corbett, Casey Frid, and Kate Richardson for their helpful comments and suggestions.
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Yamakawa, Y., Cardon, M.S. Causal ascriptions and perceived learning from entrepreneurial failure. Small Bus Econ 44, 797–820 (2015). https://doi.org/10.1007/s11187-014-9623-z
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