Expectancy Theory and Nascent Entrepreneurship

Abstract

Motivation is an important factor that distinguishes those nascent entrepreneurs who make progress towards an operating venture from those who do not. Based on Vroom’s (Work and motivation, 1964) expectancy theory, we predict that startup-specific instrumentality, valence and expectancy are key components of entrepreneurial motivation and closely related to those intentions, efforts, and behaviors that will eventually lead to operating a firm. Hypotheses are tested using data from the first Panel Study of Entrepreneurial Dynamics I. Our results show that valence is a multidimensional construct, and that various types of valence are related to different intent and behavioral outcomes. All types of valence, instrumentality, and expectancy are related to a nascent entrepreneur’s intended effort level in a cross-section of data, and over time, intended effort is positively related to operative firm status. Overall, our results suggest that expectancy theory holds promise for research on nascent entrepreneurs’ motivation.

Keywords: Expectancy theory, Nascent entrepreneurship, Entrepreneurial motivation, Startup process

JEL Classification: L26, M13