The effects of perceived shame on novice entrepreneurs’ re-entry intention

Entrepreneurship is a key engine of economic growth. However, many entrepreneurs experience failure, which often evokes feelings of shame that can undermine their intentions to re-enter entrepreneurship. This challenge is especially acute for novice entrepreneurs, who typically lack prior entrepreneurial experience to buffer these negative effects. In this study, we investigate the relationship between novice entrepreneurs’ perceived shame and their re-entry intentions. Drawing on conservation of resources theory, we propose that perceived shame diminishes the resources allocated to support entrepreneurial identity, thereby lowering re-entry intentions. We further argue that this process is contingent on both internal (narcissism) and external factors (social capital), which influence whether entrepreneurs adopt avoidance- or restoration-focused responses. Using two experiments and a survey of novice entrepreneurs, we find consistent support for our hypotheses. Our findings shed new light on how psychological, cognitive, and social factors jointly shape novice entrepreneurs’ post-failure decision-making.