Bouncing back from failure: Digital technology capability, entrepreneurial alertness, and reentry intention

Abstract

Abstract Entrepreneurs who have recovered from failure and reentered entrepreneurial activities account for almost half of all entrepreneurs. However, extant research drawing on a human capital perspective has provided mixed evidence regarding whether failed entrepreneurs subsequently choose reentry or seek paid employment. Situating our study in the context of the digital era, we consider digital technology capability as an emerging, specific, and critical human capital in the development of entrepreneurial alertness, thereby influencing reentry intention. Our study proposes that entrepreneurs possessing a high level of digital technology capability have the potential to obtain rich and diverse information, reduce reentry barriers, and enhance their capacity to materialize business ideas, all of which are conducive to the development of entrepreneurial alertness and increased reentry intention. Using a sample of 263 Chinese entrepreneurs who have experienced at least one entrepreneurial failure, we find evidence in support of our hypotheses. Moving beyond the extant literature’s focus on the antecedents and consequences of entrepreneurial alertness, our study enriches our understanding of its mediating role in the relationship between human capital and reentry intention. Further, we provide a nuanced understanding of these relationships by demonstrating social costs and entrepreneurial resilience to be important moderators.