Does significant new venture progress always encourage nascent entrepreneurs to dedicate more effort to new venture creation? Although previous entrepreneurship research has demonstrated that new venture progress influences entrepreneurs’ subsequent behavior (i.e., entrepreneurial effort), it has yet to come to a consistent conclusion on the positive or negative impact of significant new venture progress. Drawing on motivational self-regulation frame, we offered competing hypotheses with respect to the association between new venture progress and subsequent entrepreneurial effort. Furthermore, entrepreneurial self-efficacy played an important mediating role in these relationships. More specifically, consistent with prior findings of the self-regulation view on expanding the differences, we argue that the more progress entrepreneurs achieve, the more entrepreneurial self-efficacy they perceive, and the more effort they devote. However, the self-regulation view on narrowing the differences suggests that entrepreneurs gain vast progress at work, which boosts their entrepreneurial self-efficacy but subsequently leads them to reduce their efforts, possibly because of overconfidence. Therefore, we propose a novel, longitudinal mediated model of new venture progress, entrepreneurial self-efficacy and entrepreneurial effort. In addition, research on self-regulation has suggested that regulatory foci have always been a boundary condition in the self-regulation process. By integrating motivational self-regulation frame and regulation focus theory, we propose that regulation foci moderate these longitudinal mediated relationships.
We test our theoretical propositions in two field surveys with nascent entrepreneurs. In Study 1, we conducted a field survey with three measurement waves over 6 months, resulting in 345 observations from 115 participants. We invited nascent entrepreneurs whose new ventures were still alive yet less than six months from the incubators of Jilin, Shandong, Guangdong, and Sichuan provinces. We measured new venture progress, entrepreneurial self-efficacy and entrepreneurial effort at all three measurement waves using established scales and items. We conducted the RI-CLPM approach to analyze the relationships between new venture progress, entrepreneurial self-efficacy, and entrepreneurial effort. To investigate the theoretical hypotheses in Study 2, we further conducted another field survey, which took 15 months and six measurement waves, resulting in 420 observations from 70 participants. New venture progress, entrepreneurial self-efficacy, and entrepreneurial effort were collected at six measurement waves, and regulatory foci were collected at the first measurement wave. To account for the moderating effect of a between-person variable (i.e., regulatory foci) on the within-person relationships (i.e., the abovementioned relationships between new venture progress, entrepreneurial self-efficacy, and entrepreneurial effort), random coefficient growth modeling was applied.
The statistical analyses mostly supported our hypotheses. Entrepreneurial self-efficacy mediated the effect of new venture progress on entrepreneurial effort. Furthermore, the results showed that entrepreneurial self-efficacy is responsible for the negative effect of new venture progress on subsequent entrepreneurial effort. In other words, prior significant new venture progress would lead to high perceptions in one’s entrepreneurial self-efficacy, which may result in less subsequent entrepreneurial effort, possibly because of the overconfidence due to the high entrepreneurial self-efficacy. Additionally, our results showed that entrepreneurs’ promotion focus/prevention focus strengthened/attenuated the direct negative relationship between entrepreneurial self-efficacy (Tn) and entrepreneurial effort (Tn+1) and also strengthened the indirect negative relationship between new venture progress (Tn-1) and entrepreneurial effort (Tn+1). However, the negative relation between entrepreneurial self-efficacy and entrepreneurial efforts became nonsignificant when the prevention focus was high.
By increasing our understanding of the complex relationship between new venture progress, entrepreneurial self-efficacy, and entrepreneurial effort, our study contributes to the literature in three ways. First, drawing on the self-regulation views on expanding and narrowing the differences, we contribute to the emerging yet still underresearched field concerning the role of entrepreneurs’ self-regulation. Previous research has complex and ambiguous, even contradicted conclusions regarding the relationship between new venture progress and subsequent entrepreneurial effort. However, by considering self-regulation views, our findings showed that the more progress the entrepreneurs made, the more self-efficacy they perceived, and the less effort they would subsequently devote. By clarifying it, our study offers a different yet comprehensive paradigm for understanding the dynamic nature of entrepreneurship under the self-regulation views. Second, by investigating the role of regulatory focus in modifying entrepreneurs’ self-regulation process, we further uncover the boundary condition of the abovementioned relationships and, more importantly, confirm the possible negative effect of promotion focus in the entrepreneurial process. In particular, our findings offer empirical evidence that entrepreneurs with high promotion focus dampen the development of negative effects stemming from high entrepreneurial self-efficacy. Since entrepreneurs’ states, behaviors, and situations fluctuate regularly and the result of the negative effect may be generally detrimental for nascent entrepreneurs, entrepreneurs with a high promotion focus should pay attention to their entrepreneurial self-efficacy to avoid a negative impact. Third, in revealing the mediating role of entrepreneurial self-efficacy, we further uncovered the time-varying and progressive aspects of new venture creation. The conventional, time-invariant perspective fails to capture complex and dynamic states and only shows the positive aspects of entrepreneurial self-efficacy. However, in our study, drawing on motivational self-regulation frame, we uncover the negative aspects of entrepreneurial self-efficacy and confirm the progressive nature of the entrepreneurial process. By doing so, we offer a means to facilitate future entrepreneurship research to emphasize the constructs and their relationships with one another that may not be possible with a time-invariant, interindividual perspective.
