Financial fear and practical imaginativeness: the moderating role of financial self-efficacy

Purpose This study examines whether financial fear of failure is associated with practical imaginativeness and investigates whether financial self-efficacy conditions this relationship. The underlying theory suggests that financial fear of failure can restrict practical imaginative engagement by creating a threat appraisal, whereas financial self-efficacy provides a perceived capability resource. Design/methodology/approach The study utilizes three-wave survey data collected from 74 undergraduate entrepreneurship students, producing 222 person-wave observations and 148 adjacent-wave transitions. Financial self-efficacy, financial fear of failure and practical imaginativeness were measured at three distinct times (T1, T2 and T3). The empirical analysis employs repeated-measures models, within-between hybrid models and lagged transition models spanning T1–T2 and T2–T3, with the lagged models controlling for prior levels of practical imaginativeness. Findings Financial self-efficacy is positively associated with practical imaginativeness across pooled and within-between models, whereas the interaction between financial self-efficacy and financial fear of failure is not evident in the contemporaneous models and is positive but marginal in the overall lagged model. A formal comparison across transitions indicates that the interaction differs between T1–T2 and T2–T3 and is significant during the later transition, when financial fear of failure predicts lower subsequent practical imaginativeness among students with low financial self-efficacy but is not significantly associated with subsequent practical imaginativeness at mean or high levels of financial self-efficacy. Originality/value This study advances entrepreneurial cognition research by examining whether financial fear of failure is associated with practical imaginativeness, rather than only with immediate intention or action, and by providing evidence of a transition-specific moderation pattern rather than a uniform relationship across the educational venture-development process.