How do managerial ties influence the effectuation and causation of entrepreneurship in China? The role of entrepreneurs’ cognitive bias

Wenwei Zhang · Wenhong Zhao · Yu Gao · Zhenxin Xiao

21 citations0/0 files storedAsia Pacific Business Review

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Entrepreneurship Studies and Influences Innovation and Knowledge Management Migration, Ethnicity, and Economy

Abstract

Drawing on social cognitive theory and social network theory, this study investigates the relationships between managerial ties, entrepreneurs’ cognitive bias, and the effectuation and causation of behavioural modes of entrepreneurship. It uses structural equation modelling to analyse a sample of 214 entrepreneurs in China. The empirical results indicate that business ties lead entrepreneurs to use effectual approaches by prompting the entrepreneurs’ overconfidence, whereas institutional ties enable entrepreneurs to use both causation and effectuation by prompting the entrepreneurs’ illusion of control. This study delineates how different types of managerial ties affect causation and effectuation through different cognitive mechanisms.

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References

1981Evaluating Structural Equation Models with Unobservable Variables and Measurement Error 2003Common method biases in behavioral research: A critical review of the literature and recommended remedies.2001Social Cognitive Theory: An Agentic Perspective 1981Structural Equation Models with Unobservable Variables and Measurement Error: Algebra and Statistics 2001Accounting for common method variance in cross-sectional research designs.1988Illusion and well-being: A social psychological perspective on mental health.2004Confidence Limits for the Indirect Effect: Distribution of the Product and Resampling Methods 1989Strategic management of small firms in hostile and benign environments

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