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The rates of safe and hazardous entrepreneurial activities: introducing the lower and upper limits of entrepreneurship risks

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Abstract

Entrepreneurial activities are influenced by a broad range of individual properties. Risk-taking is one of the key attitudes that includes two opposing views that may motivate or hinder people during the initial stages of business activity. Fear of failure (or vice versa, risk acceptance) is considered a momentous factor in entrepreneurship that acts as a deterrent in business success. Introducing the entire range of risks affecting entrepreneurial activities is the main objective of this study. In addition to the presentation of an illustrative argument of various types of entrepreneurship risk, this paper focuses on two special risks relating to the lower and upper limits of entrepreneurship risk range. Additionally, the rate of entrepreneurial activities under such risks has been calculated by applying the conditional probability equation and dataset gathered by Global Entrepreneurship Monitor (GEM) in 2016. By applying this formula on the GEM data of 65 countries, two different types of risk named safe risk (SR) and hazardous risk (HR) have been introduced. Each risk type leads to a business with a specific level of success. The entrepreneurial activities correspond with these two risk types calculated in this paper with the names of safe and hazardous entrepreneurial activity rates. As a result, this categorization indicates that the weakness in some individual factors such as perceived opportunities and capabilities is the main reason leading to business failures.

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Data availability

The reports and dataset on individual factors affecting the entrepreneurship status, released by the Global Entrepreneurship Monitor (GEM) in the year 2016 have been used throughout this study.

Notes

  1. Both terms “risk” and “fear of failure” will be used equivalently hereinafter.

  2. Based on the GEM definition of the types of entrepreneurial activities, there are two distinguished groups of businesses: first, early-stage entrepreneurial activities group that includes all business aged lower than 42 months; second, the established businesses group that includes entrepreneurial activities whose age is more than 42 months.

Abbreviations

GEM:

Global Entrepreneurship Monitor

TEA:

Total early-stage Entrepreneurial Activities

SR:

safe risk

HR:

hazardous risk

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Acknowledgements

We are grateful to reviewers for their wonderful comments and their suggestions throughout the review process. Additionally, we highly wish to thank our parents and family for inspiring us during this research.

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Authors and Affiliations

  1. Shiraz University, Shiraz, Iran

    Nezameddin Faghih

  2. Faculty of Entrepreneurship, University of Tehran, Tehran, Iran

    Lida Sarreshtehdari

  3. School of Mathematics, Statistics, and Computer Science, University of Tehran, Tehran, Iran

    Ebrahim Bonyadi

Authors
  1. Nezameddin Faghih
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  2. Lida Sarreshtehdari
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  3. Ebrahim Bonyadi
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Contributions

Nezameddin Faghih: The main ideas behind the paper have been developed by him and also he acted as the supervisor trying to improve the structures of this article.

Ebrahim Bonyadi: Conceptualization, methodology, software (including R programing language, and SPSS), validation, formal analysis, data curation, writing - original draft, writing - review & editing, supervision, and project administration.

Lida Sarreshtehdari: Investigation, resources, formal analysis, writing - original draft, visualization, and project administration.

Corresponding author

Correspondence to Ebrahim Bonyadi.

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The authors declare no competing interests.

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Faghih, N., Sarreshtehdari, L. & Bonyadi, E. The rates of safe and hazardous entrepreneurial activities: introducing the lower and upper limits of entrepreneurship risks. J Glob Entrepr Res 11, 347–359 (2021). https://doi.org/10.1007/s40497-021-00291-0

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