Fear of Failure and Innovativeness of Opportunities-Moderating Roles of Entrepreneurial Self-Efficacy and Government Support

Abstract Why are most entrepreneurial activities not innovative? We conceptually illustrate the motivational obstacles of entrepreneurs with fear of failure to recognize innovative opportunities. We test our theoretical arguments using data from the GEM survey of 65,782 early-stage entrepreneurs in 31 countries from 2013 to 2018. Our analysis shows that fear of failure is negatively related to the innovativeness of opportunities. Entrepreneurial self-efficacy positively moderates the inverse relationship between fear of failure and the innovativeness of opportunities. Furthermore, government support plays an inverted U-shaped moderating role in the relationship between fear of failure and the innovativeness of opportunities, which underscores the dual nature of government support and sheds light on how it impacts innovation. Empirically, the study provides robust evidence that fear of failure negatively impacts entrepreneurs’ innovative opportunities. It also contributes to further scope of research on individual factors and the recognition of different attributes of opportunities. The results provide important insights for the recognition of innovative opportunities, offering practical implications for entrepreneurs and policymakers.