The Role of Self-Efficacy, Opportunity Perception, Social Network, and Fear of Failure on Nascent Entrepreneurial Propensities

Abstract

The existing literature has identified a number of antecedent factors that positively influence the propensity of individuals to become entrepreneurs. Key among these are self-efficacy, prior personal contacts with entrepreneurs and perception of opportunity. At the same time, fear of failure has been popularly identified by policy makers as a major deterrent to taking the entrepreneurial plunge. This paper examines the relative impacts of these antecedent and deterrent factors and their possible interactions on entrepreneurial propensity among nascent entrepreneurs using pooled data from 60,000 respondents in the 29 countries covered in the GEM 2001 adult population survey. We also tested for possible differences in their effects on opportunity vs. necessity entrepreneurial propensities as well as distinguished "high employment potential" entrepreneurial propensity from general entrepreneurial propensity. Our findings highlight the significant interactions between self-efficacy and fear of failure and between self-efficacy and gender. Relevant policy implications are discussed.