Failing to Learn from Failure: How Optimism Impedes Entrepreneurial Innovation

Mario Daniele Amore, Orsola Garofalo, Victor Martin-Sanchez

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Abstrakt

Extant research shows that entrepreneurs are typically overly optimistic about their ventures’ prospects and that such optimism hampers performance. We analyze how dispositional optimism affects the adjustments to entrepreneurs’ expectations after they receive negative feedback on their task performance. We then explore the relationship between optimism and the effectiveness of innovation. Exploiting unique firm-level data and a laboratory experiment involving 205 entrepreneurs, we find that dispositional optimism is negatively associated with both the likelihood and extent of belief updating in response to negative feedback. Furthermore, dispositional optimism triggers a discrepancy—between innovation inputs and outputs—that reduces a firm’s innovation effectiveness.
OriginalsprogEngelsk
TidsskriftOrganization Science
Antal sider26
ISSN1047-7039
DOI
StatusUdgivet - 7 dec. 2020

Bibliografisk note

Epub ahead of print. Published online: 7. December 2020

Emneord

  • Dispositional optimism
  • Belief updating
  • Entrepreneurship
  • Negative feedback
  • Innovation

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