The Role of Cognitive Style and Risk Preference on Entrepreneurial Self-Efficacy and Entrepreneurial Intentions

Abstract

The purpose of the current study is to address the distinctive roles of cognitive style and risk preference on four types of entrepreneurial self-efficacy and entrepreneurial intentions. More specifically, we examine how both cognitive style and risk preference separately and interactively contribute to an individual's assessment of his/her own skills and abilities as well as to his/her own entrepreneurial intentions. This study investigated these relationships using an international sample of 528 entrepreneurial students across three universities. Results indicated that individuals with a high risk preference had higher levels of entrepreneurial intentions and opportunity-identification efficacy, whereas individuals with a low risk preference had higher levels of relationship efficacy, and tolerance efficacy. Individuals with an intuitive cognitive style were also found to have lower perceived self-efficacy concerning the establishment of relationship with investors, the economic management of the new venture, and their capacity to tolerate ambiguity. However, intuitive individuals who had a high preference for risk exhibited higher levels of opportunity identification efficacy. Finally, contrary to our final hypothesis, analytic individuals with a low preference for risk had higher levels of relationship and tolerance self-efficacy than intuitive individuals with a high risk preference. Implications of these findings and directions for future research are discussed.