Abstract

Entrepreneurs often develop such strong feelings towards their entrepreneurial pursuits that they exhibit a parental, protective attitude towards the venture that they come to view as “their baby”. This possessiveness indicates a deeper characteristic of psychological ownership which is defined as the condition where an individual develops and displays strong feelings and thoughts of ownership over an object (regardless of the actual level of legal ownership). These feelings generate an intense sense of commitment and protectiveness towards the venture, but high levels of psychological ownership may engender problems such as greater resistance to change and an unwillingness to cooperate with others, which could hinder business growth. We hypothesize that higher psychological ownership among founders will be associated with less use of external resources, greater human resource homogeneity, lower decision comprehensiveness, faster decision speed, and lower short-term marginal costs.

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