Entrepreneurial Self-Efficacy and Venture Abandonment Intention: A Moderated Mediation Perspective on Emotion Regulation and Financial Well-Being

Abstract

The topic of abandoning ventures has become highly relevant in contemporary research within the domain of entrepreneurship. Abandonment is especially significant in developing countries as most ventures emerge and operate under conditions of uncertainty, financial instability, and psychological pressures. While entrepreneurship research has extensively studied the phenomenon of business failure and entrepreneurial persistence, little attention has been paid to uncovering the psychological processes behind venture abandonment intention. Thus, the aim of this paper is to examine the relationship between entrepreneurial self-efficacy and venture abandonment intention taking into account the mediating role of emotion regulation and the moderating role of financial well-being. Following a quantitative approach, data were collected from 176 entrepreneurs who filled out the questionnaire designed by the researcher in purposeful sampling. To analyze the data, Partial Least Squares Structural Equation Modeling (PLS-SEM) via SmartPLS software was used. The findings showed that the entrepreneur self-efficacy positively affected emotion regulation but negatively affected venture abandonment intention. Emotion regulation in turn played a significant role in lowering the intention to abandon a venture and acted as a mediator in the connection between entrepreneurial self-efficacy and the intention to give up the entrepreneurial activity. Also, financial well-being served to enhance the relationship between entrepreneurial self-efficacy and emotion regulation while increasing the strength of the indirect effect of entrepreneurial self-efficacy on venture abandonment intention through emotion regulation. In general, the current research makes an important contribution to the entrepreneurship literature as it helps to expand existing knowledge about the factors influencing venture abandonment beyond structure and economics. Specifically, the role of emotions and their self-regulation and resources at hand as predictors of entrepreneurial disengagement was demonstrated based on the theoretical foundation of Self-Regulation Theory and Conservation of Resources Theory. As such, the results have practical value as well as they can inform entrepreneurship development initiatives and policy-makers about the necessary components of successful entrepreneurial activities.

Keywords: Entrepreneurial self-efficacy, emotion regulation, financial well-being, venture abandonment intention, moderated mediation, entrepreneurship, Self-Regulation Theory, Conservation of Resources Theory.