Abstract

Entrepreneurship scholarship is intently focused on theories of action (McMullen and Shepherd, 2006). However, there are countless examples of situations where entrepreneurs do not act when action is warranted or expected. Thus, entrepreneurial inaction is likely a common, but understudied, phenomenon, and it remains unclear the extent to which the ‘road not traveled’ influences the entrepreneurship process.

Hence, we build and test a theory of entrepreneurial inaction—defined as a conscious, deliberate, and articulable decision not to act on a perceived opportunity. Our theory flows from cognitive science research on inaction inertia (Tykocinski et al., 1995) and we advance that not acting on an initial opportunity becomes a source of inertia in entrepreneurs’ subsequent opportunity judgments. We then theorize that the outcome of the initial inaction decision and the similarity of the technological domain between the initial and subsequent opportunity, exacerbate the inertia effect.

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