Stigma and business failure: Implications for entrepreneurs' career choices

Sharon A. Simmons, Johan Wiklund, Jonathan Levie

Research output: Contribution to journalArticle

56 Scopus citations

Abstract

We use data from global entrepreneurship monitor to examine the act of entrepreneurial reentry by entrepreneurs who exit a failed business. We study reentry by mode of entry and by form of organizing. We find that, in countries where the levels of stigma and regulatory conveyance of stigma markings were at their highest, entrepreneurs who exited failed businesses were less likely to reenter into entrepreneurial activity. Our finding suggests that negative social and economic sanctions that are associated with stigma markings speak only to one side of the entrepreneurship phenomenon. On the other side, stigma can function as a stimulus for entrepreneurs to defy the illegitimacy of the failed business and to actively seek out and engage in innovative behaviors that contribute to the overall diversity of entrepreneurial activities in their country.

Original languageEnglish (US)
Pages (from-to)485-505
Number of pages21
JournalSmall Business Economics
Volume42
Issue number3
DOIs
StatePublished - Mar 1 2014

Keywords

  • Business failure
  • Entrepreneur careers
  • Entrepreneurship
  • Global entrepreneurship monitor
  • Serial entrepreneurship
  • Stigma

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics

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