The impact of founder’s regulatory focus on the process of firm birth and firm abandonment

Purpose: The purpose of this paper is to show how self-regulation influences the relationship between nascent entrepreneurial exploitation activities, firm birth and firm abandonment. Design/methodology/approach: This study draws from a unique longitudinal dataset of 181 nascent entrepreneurs from Switzerland who have been interviewed by phone in 2015 and 2016. It uses a moderated binary logistic regression to test the hypotheses. Findings: This study provides evidence that discrepancies in promotion orientation can explain different ways exploitation can lead to an increased likelihood of firm birth and a decreased likelihood of firm abandonment while respectively increasing persistence. Findings suggest that this is attributed to the regulatory fit between a promotion orientation and exploitation activities. Research limitations/implications: For scholars, our findings provide insights into reasons for entrepreneurial persistence, as well as how firm birth can be achieved with different levels of exploitation activities. Practical implications: This study provides entrepreneurs with information on how to increase their persistence as well as the likelihood of firm birth while considering their regulatory focus. Originality/value: Based on regulatory focus theory, this paper highlights different paths to firm birth with varying quantity of exploitation activities. We contribute to a greater understanding of firm emergence by accounting for the impact of regulatory foci.