Repairing subsequent entrepreneurship legitimacy for new ventures: impression management of entrepreneurial-failure stigma

Purpose Addressing the adverse effects of entrepreneurial failure stigma and establishing the subsequent entrepreneurship legitimacy of new ventures are crucial for reinvigorating entrepreneurial endeavors. This paper investigated the implementation of impression-management strategies for mitigating the adverse effects of the stigma associated with entrepreneurial failure on the legitimacy of subsequent entrepreneurial activities. Design/methodology/approach Drawing on impression-management theory and legitimacy theory, we conducted three experimental studies to explore the impact of impression-management strategies of entrepreneurial-failure stigma on the legitimacy of subsequent entrepreneurship. Additionally, the role of stakeholders’ forgiveness as a mediating factor and how the specific type of entrepreneurial failure stigma (attributable vs non-attributable) moderates these effects were analyzed. Findings The results from Studies 1 and 2 show that implementing impression-management strategies positively contributes to sustaining the legitimacy of subsequent entrepreneurial endeavors in failed new ventures. Assertive strategies demonstrate a more effective impact on enhancing the legitimacy of subsequent entrepreneurship than defensive impression management strategies. In addition, stakeholders’ forgiveness plays a mediating role in the relationship between impression-management strategies and subsequent entrepreneurship legitimacy. The results of Study 3 demonstrate that the type of stigma associated with entrepreneurial failure moderates the impact of impression-management strategies on the legitimacy of subsequent entrepreneurship. In situations where the stigma is attributable, implementing only assertive strategies is adequate to yield favorable results. However, in situations where the stigma is non-attributable, it is essential to implement both defensive and assertive strategies to effectively strengthen subsequent entrepreneurship legitimacy. Originality/value The findings make a valuable contribution to the existing literature on the recovery from entrepreneurial failure, and they also offer practical strategies for new ventures to adeptly handle the stigma of failure and resume their entrepreneurial endeavors.