Abstract

This study is motivated by the need for empirical evidence of the use of effectual logic (Sarasvathy, 2001) by nascent entrepreneurs. Although there have been several empirical studies of the use of effectual logic in specific industries (Dew, 2003 ; Wiltbank & Sarasvathy, 2002), there has been limited research examining the use of effectual reasoning by nascent entrepreneurs in varying industries. We seek to contribute to the literature by investigating the effects of the use of effectual logics in the very early, nascent stage of new ventures.

In order to investigate the linkages between effectual logic and success, we utilized five principles of effectual thinking, and three common measures of entrepreneurial success. By looking separately at the five principles and three measures of success, we are able to show how the various components of effectual logic impact each measure of success for nascent ventures. These insights contribute both theoretically and practically to the field of entrepreneurship by providing empirical linkages between some applications of effectual logic and venture success.

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