Growth expectations of entrepreneurs during crisis: the role of social, environmental, and economic motivations

Abstract

Economically motivated entrepreneurship is argued to contribute to society by creating economic growth and jobs, while socially and environmentally motivated entrepreneurship is positioned as a way of addressing societal needs. We relate this heterogeneity in entrepreneurs’ motivations to growth expectations and ask whether the effects of these motivations differ under conditions of adversity, specifically in the context of an economic crisis. We argue that during an economic crisis, socially and environmentally motivated entrepreneurs may expect to grow, in contrast to economically motivated entrepreneurs who often scale back their growth expectations in times of adversity. We test our predictions in multilevel analyses of data from 5605 entrepreneurs across 48 countries collected during the Global Financial Crisis. We find that socially and environmentally motivated entrepreneurs had higher growth expectations than economically motivated entrepreneurs. These relationships were mediated by lower perceived market competition. For environmentally motivated entrepreneurs, higher opportunity perception also acted as a mediating mechanism. By bridging research on growth expectations with research on social and environmental entrepreneurship, our study contributes new insights to both streams of research. It also contributes to entrepreneurship research on crises and adversity by highlighting how motivations shape entrepreneurs’ responses to crises and by unpacking the individual-level cognitive mechanisms involved.