10225: Understanding How and When Business Failure Experience Stimulates Entrepreneurial Persistence (session 26091)

Drawing on the transactional theory of stress and coping, buttressed by three-wave data obtained from 245 early-stage entrepreneurs over one year period in Ghana, the study examines two cognitive resources, namely psychological detachment and venture demands-abilities fit, as essential boundary conditions that can facilitate an entrepreneur’s ability to learn from failure and persist in subsequent ventures. Based on our conceptualization and hypotheses testing, we found that the experience of business failure drives learning from failure, which, in turn, promotes entrepreneurial persistence. In addition, psychological detachment, and venture demands-abilities fit were found to moderate the first and second stages of the indirect effect, respectively. Finally, the indirect effect of business failure experience was stronger when both psychological detachment and venture demands-abilities fit were higher. Taken together, our study shows that psychological detachment and venture demands-abilities fit are two important coping resources that, alongside business failure experience, can enhance learning from failure and entrepreneurial persistence.

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