Wimp out or take off? Temporal dynamics in new venture effort after exposure to entrepreneurial obstacles

PurposeThe present research integrates conservation of resources theory (COR) and adaptation theory to investigate the dynamics of entrepreneurs' reactions to obstacles. Furthermore, this research explores whether entrepreneurs' effort allocations following an obstacle influence how entrepreneurs appraise subsequent loss-related events. Finally, this research seeks to understand why some entrepreneurs handle obstacles better than others by considering the role of optimism.Design/methodology/approachThis research utilized a longitudinal survey with 130 nascent entrepreneurs across 4 time periods. This research used a multivariate latent change analysis model to examine the temporal dynamics of new venture effort after exposure to obstacles.FindingsThe results indicated that entrepreneurial obstacles at time t were associated with decreased effort in new ventures at time t+1. Furthermore, new venture effort at time t was associated with decreased effort in new ventures at time t+1. The results also demonstrated that the allocation of greater effort may lead to a decrease in subsequent obstacle appraisals, a relationship that also varies as a function of nascent entrepreneurs' optimism.Originality/valueThis research extends the understanding of the dynamic pattern of reactions following exposure to entrepreneurial obstacles. The findings suggest that, rather than being straightforward, reactions are likely to ebb and flow over time.