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Unpacking the nonlinear effect of self‐efficacy in entrepreneurship: Why and under which condition more is not better

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Self‐efficacy exerts a positive impact on several self‐regulatory functions to support goal accomplishment and performance. However, in contexts that are characterized by uncertainty and ambiguity, such as entrepreneurship, there might be a tipping point to this relationship, prompting calls for deeper investigations on the nonlinear effect. In particular, the underlying mechanisms explaining why and when the nonlinear effect occurs are unclear. Drawing on theories of self‐regulation, we examine the nonlinear effect of entrepreneurial self‐efficacy on venture goal progress through the entrepreneur's active feedback‐seeking and venture effort. We also propose that the entrepreneur's state error mastery orientation moderates the nonlinear effect. Conducting a six‐wave repeated measures study among 84 early‐stage entrepreneurs in a business accelerator in the Philippines, we use a within‐person approach to test our hypotheses and research model. Results suggest that self‐regulatory mechanisms in terms of feedback seeking, effort, and state error mastery orientation help to unpack why and when self‐efficacy exerts a nonlinear effect on performance outcomes.
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Received: 8 August 2022 Revised: 22 August 2023 Accepted: 23 August 2023
DOI: 10.1111/peps.12618
ORIGINAL ARTICLE
Unpacking the nonlinear effect of self-efficacy in
entrepreneurship: Why and under which condition
more is not better
Marilyn A. Uy1Shuhua Sun2Michael M. Gielnik3
Gabriel Henry Jacob4John Luis D. Lagdameo5
Armando G. Miclat Jr.5Enrico C. Osi5
1Division of Strategy, International Business,
and Entrepreneurship, Nanyang Business
School, Nanyang Technological University,
Singapore, Singapore
2Department of Management, Freeman School
of Business, Tulane University,New Orleans,
Louisiana, USA
3Leuphana University of Lüneburg, Institute of
Strategic HR Management, Lüneburg,
Germany
4Division of Strategy, International Business,
and Entrepreneurship, Nanyang Business
School, Nanyang Technological University and
Asian Pastoral Institute, Singapore, Singapore
5Department of Marketing and Law, and
Department of Leadership and Strategy,John
Gokongwei School of Management, Ateneo de
Manila University, Quezon City, Philippines
Correspondence
Marilyn A. Uy, Division of Strategy,
International Business, and Entrepreneurship,
Nanyang Business School, Nanyang
TechnologicalUniversity, ABS-05-076, 91
Nanyang Avenue, Singapore, 639956,
Singapore.
Email: muy@ntu.edu.sg
Abstract
Self-efficacy exerts a positive impact on several self-
regulatory functions to support goal accomplishment and
performance. However, in contexts that are characterized by
uncertainty and ambiguity, such as entrepreneurship, there
might be a tipping point to this relationship, prompting calls
for deeper investigations on the nonlinear effect. In partic-
ular, the underlying mechanisms explaining why and when
the nonlinear effect occurs are unclear. Drawing on the-
ories of self-regulation, we examine the nonlinear effect
of entrepreneurial self-efficacy on venture goal progress
through the entrepreneur’s active feedback-seeking and
venture effort. We also propose that the entrepreneur’s
state error mastery orientation moderates the nonlinear
effect. Conducting a six-wave repeated measures study
among 84 early-stage entrepreneurs in a business acceler-
ator in the Philippines, we use a within-person approach
to test our hypotheses and research model. Results sug-
gest that self-regulatory mechanisms in terms of feedback
seeking, effort, and state error mastery orientation help to
unpack why and when self-efficacy exerts a nonlinear effect
on performance outcomes.
Personnel Psychology. 2024;77:81–108. © 2023 Wiley Periodicals, Inc. 81wileyonlinelibrary.com/journal/peps
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... Feedback helps form challenging goals and stimulates intentional actions, enhancing agentic behavior (Bandura, 1986(Bandura, , 2001. Exposing oneself to scrutiny through selfpromotion, even at the risk of criticism, can help form and specify goals through others' evaluative reactions and foster active goal pursuit (Bandura, 1991;Uy et al., 2024). Conversely, entrepreneurs who rarely self-promote are less likely to receive swift, valuable feedback and may rely on delayed business outcomes (e.g., sales figures) to guide their actions. ...
... I propose that this enhanced engagement manifests in further ideas and recommendations. This more valuable feedback can, in turn, trigger agentic behavior by identifying key points of attention (Brown et al., 2001) and encouraging greater effort (Uy et al., 2024). However, while I find evidence for my theory, Study 1 can only assume the mechanism at play, as the data do not allow for testing targets' reactions to entrepreneurial self-promotion. ...
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