Moving forward: Balancing the financial and emotional costs of business failure

Dean A. Shepherd, Johan Wiklund, J. Michael Haynie

Research output: Chapter in Book/Entry/PoemChapter


Why do owner-managers delay business failure when it is financially costly to do so? In this paper we acknowledge that delaying business failure can be financially costly to the owner-manager and the more costly the delay, the more difficult the recovery. But we complement this financial perspective by introducing the notion of anticipatory grief as a mechanism for reducing the level of grief triggered by the failure event, which reduces the emotional costs of business failure. We propose that under some circumstances delaying business failure can help balance the financial and emotional costs of business failure to enhance an owner- manager’s overall recovery — some persistence may be beneficial to recovery and promote subsequent entrepreneurial action. Published by Elsevier Inc.

Original languageEnglish (US)
Title of host publicationA Psychological Approach to Entrepreneurship
Subtitle of host publicationSelected Essays of Dean A. Shepherd
PublisherEdward Elgar Publishing Ltd.
Number of pages15
ISBN (Electronic)9781783479801
ISBN (Print)9781783479795
StatePublished - Jan 1 2014


  • Commitment
  • Entrepreneur
  • Failure
  • Learning
  • Negative emotions
  • Passion
  • Recovery

ASJC Scopus subject areas

  • General Economics, Econometrics and Finance
  • General Business, Management and Accounting
  • General Psychology


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