Does Self-Efficacy Affect Entrepreneurial Investment?

Strategic Entrepreneurship Journal, Vol. 3, No. 3, 2009

Posted: 8 Jul 2009

See all articles by Gavin Cassar

Gavin Cassar

INSEAD

Henry L. Friedman

University of California, Los Angeles (UCLA) - Anderson School of Management

Multiple version iconThere are 2 versions of this paper

Date Written: July 7, 2009

Abstract

We empirically examine the effect of self-efficacy on entrepreneurial investment choices. We identify various attributes of entrepreneurial investment, and argue that higher self-efficacy is associated with more aggressive entrepreneurial investment decisions. We show that self-efficacy increases the likelihood of both being a nascent entrepreneur and creating an operating business. Self-efficacy also increases the proportion of personal wealth invested in the venture and the amount of hours per week the entrepreneur devotes to the venture. These results are significant even when controlling for other known characteristics associated with entrepreneurial investment.

Keywords: entrepreneur, investment, self-efficacy, venturing

JEL Classification: D81, J20, J23, J24, M13, L20

Suggested Citation

Cassar, Gavin and Friedman, Henry L., Does Self-Efficacy Affect Entrepreneurial Investment? (July 7, 2009). Strategic Entrepreneurship Journal, Vol. 3, No. 3, 2009, Available at SSRN: https://ssrn.com/abstract=1431075

Gavin Cassar (Contact Author)

INSEAD ( email )

Boulevard de Constance
Fontainebleau, 77305
France

HOME PAGE: http://https://www.insead.edu/faculty-research/faculty/gavin-cassar

Henry L. Friedman

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

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