A three-study investigation of the roles of personality and regulatory focus in entrepreneurial persistence decisions

Entrepreneurial persistence is crucial for venture survival and economic value creation, yet it can lead to negative outcomes when entrepreneurs continue to invest in failing ventures despite adverse feedback or better alternatives. Understanding when and why entrepreneurs persist remains an important challenge. In this research, we examine regulatory focus as an underlying mechanism linking entrepreneurs’ self-evaluations to persistence decisions. We propose that the relationship between entrepreneurs’ self-esteem and self-efficacy and their likelihood of persisting with a prior business decision is mediated by regulatory focus. Specifically, entrepreneurs who have a more active prevention versus promotion focus are more likely to persist with a current failing new venture. We test this framework across three complementary studies, two experiments and a two-wave field study among small business owners and owner-managers of high-technology firms in the United States. The results show regulatory focus as a psychological mechanism underlying persistence. We conclude by offering implications for helping entrepreneurs make more informed decisions about when to persist.