Realizing Expectations? High-impact Entrepreneurship Across Countries

Comparative international entrepreneurship research has often used measures of high-growth expectations entrepreneurship to proxy for the construct of high-impact entrepreneurship. We revisit this practice by assessing the cross-country association between high-growth expectations and realized high-impact entrepreneurship to speak to construct measurement fit. We find that expectations are not a good proxy for realizations; they are associated with different determinants and outcomes, respectively. We go on to introduce the notion of entrepreneurial projection bias to gauge the misfit between expectations and realizations. Conditioning on entrepreneurial projection bias partially restores the association between realized high-impact entrepreneurship and its determinants (or outcomes) when realizations are proxied using expectations. Furthermore, we show that opportunity-motivated entrepreneurship also does not proxy well for high-impact entrepreneurship. Our analysis brings into question current survey-based approaches to measuring high-impact entrepreneurship and existing rankings of countries’ entrepreneurial performance, with important implications for entrepreneurship theory and policy.