TY - JOUR

T1 - An empirical investigation of determinants of effectual and causal decision logics in online and high-tech start-up firms

AU - Frese, Tobias

AU - Geiger, Ingmar

AU - Dost, Florian

PY - 2020/3/1

Y1 - 2020/3/1

N2 - Scholars have criticized effectuation research for being insufficiently embedded in a nomological network of practically relevant antecedents. To address this research gap, the current study uses a mixed-methods design. First, a qualitative study with 20 venturing experts (entrepreneurs and investors) validates various effectuation logics and uncovers the following four antecedents of effectuation and causation: founders’ perceived uncertainty, entrepreneurial experience, management experience, and investor influence. Second, a large-scale quantitative study of founders in online, software, and high-tech start-ups (n = 435) provides statistical support for the identified antecedents, using structural equation modeling and multigroup comparisons over early and later venture stages. The study confirms the multifaceted nature of effectuation; experimentation is the only effectual logic that reflects influences of all the determinants. Founders’ prior experiences affect experimentation and causation in the early venture stage, but not during the later stages. Investor influence displays the broadest array of effects on the decision logics, offering both theoretical embeddedness for effectuation and a new, practically relevant driver.

AB - Scholars have criticized effectuation research for being insufficiently embedded in a nomological network of practically relevant antecedents. To address this research gap, the current study uses a mixed-methods design. First, a qualitative study with 20 venturing experts (entrepreneurs and investors) validates various effectuation logics and uncovers the following four antecedents of effectuation and causation: founders’ perceived uncertainty, entrepreneurial experience, management experience, and investor influence. Second, a large-scale quantitative study of founders in online, software, and high-tech start-ups (n = 435) provides statistical support for the identified antecedents, using structural equation modeling and multigroup comparisons over early and later venture stages. The study confirms the multifaceted nature of effectuation; experimentation is the only effectual logic that reflects influences of all the determinants. Founders’ prior experiences affect experimentation and causation in the early venture stage, but not during the later stages. Investor influence displays the broadest array of effects on the decision logics, offering both theoretical embeddedness for effectuation and a new, practically relevant driver.

KW - Entrepreneurship

KW - mixed-method design

KW - venture stage

KW - investor influence

KW - entrepreneurial and management experience

KW - uncertainty

U2 - 10.1007/s11187-019-00147-8

DO - 10.1007/s11187-019-00147-8

M3 - Journal article

VL - 54

SP - 641

EP - 664

JO - Small Business Economics

JF - Small Business Economics

SN - 0921-898X

ER -