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Variable risk preferences in new firm growth and survival
Linköping University, Department of Management and Engineering, Business Administration. Linköping University, Faculty of Arts and Sciences. Ratio Institute, Sweden.
Lund University, Sweden.
Syracuse University, USA.
2016 (English)In: Journal of Business Venturing, ISSN 0883-9026, E-ISSN 1873-2003, Vol. 31, no 4, 408-427 p.Article in journal (Refereed) PublishedText
Abstract [en]

We outline and test a decision-making theory of new venture growth and survival. Building upon research in entrepreneurship and decision making under risk, we hypothesize that entrepreneurs attention to survival and aspiration reference points changes based on venture age (experience-based learning), size (differences in decision complexity), and performance decision domain. Examining a panel of 14,760 new ventures in the professional services sector, our findings show how risk preferences change as a venture ages and increases in size. This approach offers a more nuanced view of decision making under risk and provides a theoretical explanation for the common patterns of new ventures probability of exit and growth diminishing with age and size. (C) 2016 Elsevier Inc. All rights reserved.

Place, publisher, year, edition, pages
ELSEVIER SCIENCE BV , 2016. Vol. 31, no 4, 408-427 p.
Keyword [en]
Growth; Survival; Aspiration levels; Focus of attention; New ventures; Risk preferences
National Category
Business Administration
URN: urn:nbn:se:liu:diva-130401DOI: 10.1016/j.jbusvent.2016.05.001ISI: 000379630800003OAI: diva2:952695

Funding Agencies|Swedish Research Council [340-2013-5460]; Riksbankens Jubileumsfond [M12-0301:1]

Available from: 2016-08-15 Created: 2016-08-05 Last updated: 2016-09-07

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Wennberg, Karl
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