An institutional perspective on fear of failure and its effects across three entrepreneurship stages

Scholars studying entrepreneurship are increasingly interested in understanding the impact of informal factors, such as national culture or norms, on entrepreneurial behavior. One concept that is receiving particular attention is fear of failure. While the prevailing assumption here is that it functions as a hindrance, recent studies are beginning to challenge this view. Adopting a perspective on fear of failure as a country’s cultural characteristic, we examine its differential effects on the emergence of entrepreneurship at the country level across three stages of the entrepreneurial process: the pre-launch, launch and post-launch stage. Across a set of 89 countries, we find empirical evidence showing that the effects of collective fear of failure unfold differently at subsequent stages of entrepreneurship. While collective fear of failure is negatively related to the emergence of entrepreneurial intentions and opportunity-seeking behavior, it is positively related to entrepreneurial activity in later stages that aims to achieve growth and innovation. Our research contributes to the field of entrepreneurship by reconciling previously conflicting findings on the role of fear of failure in entrepreneurship and extends the ongoing discussion of entrepreneurship as a process.