Abstract

Entrepreneurs evaluating opportunities are likely to engage in information searches that provide signals regarding the viability of those opportunities. These signals serve to reduce the uncertainty associated with opportunity exploitation while providing a platform for entrepreneurial action (McMullen and Shepherd, 2006). One potential source of opportunity signals is described in ecological models that suggest population level founding rates, dissolution rates, and population density provide entrepreneurs with information regarding the viability of new venture creation (Aldrich, 1990, Hannan and Carroll, 1992). However, the true nature of the signaling effects of population level rates and density remain a ‘black box,’ because the population level data used to test ecological models cannot represent the cognitions of entrepreneurs. Our research attempts to fill this gap by developing and testing a series of hypotheses that specify the impact of population level founding rates, dissolution rates, and density levels, as well as the effects of fear of failure and general self-efficacy, on the entrepreneur’s decision to invest in an entrepreneurial opportunity.

Share

COinS