Following an active approach in personality and entrepreneurial success (Frese, 2009), the current study tests bi-directional relationships between personality traits proximal to entrepreneurial activities (self-efficacy, risk taking propensity, need for autonomy, tolerance for ambiguity, achievement orientation and creativity), subjective entrepreneurial success and the odds of starting a new establishment 3 years later.
Several meta-analyses have shown that personality traits relate to business success (Rauch & Frese, 2007; Zhao & Seibert, 2006). However, few longitudinal studies have been conducted on this topic. Most studies presume that the relationship leads from presumably stable personality characteristics to entrepreneurial performance. However, not all personality characteristics are unchangeable, some are malleable over time (Luthans & Yousseff, 2004), and there are good theoretical arguments to expect reversed relationships. For example, according to Bandura’s Social Learning Theory (Bandura, 1999), mastery experience leads to higher self-efficacy and increased self-esteem.
The current study is a three year follow-up study among 119 entrepreneurs in the hospitality industry (response rate Wave 1 = 23 %; Wave 2 = 43 %). Entrepreneurs filled in on-line questionnaires measuring the same variables at T1 and T2. Personality characteristics were measured with pre-existing, reliable, multi-item scales. Subjective entrepreneurial success was measured as satisfaction with the business (faces scale, Kunin, 1955) and 2 items asking entrepreneurs to rate how successful they were. Third criterion was having opened one or more new establishments at T2.
Results of multiple (logistic) regression analyses show that personality characteristics at T1 (tolerance for ambiguity and achievement orientation) predicted starting a new establishment at T2. None of the personality characteristics at T1 predicted subjective entrepreneurial success at T2. However, the extent to which entrepreneurs were satisfied with their business, and the extent to which they rated themselves as successful at T1 did predict higher achievement orientation and creativity at T2.
These findings challenge the currently dominant point of view that personality predicts entrepreneurial performance, and underscore the need for longitudinal research designs. As both a theoretical and practical implication the results show it is necessary to fit specific personality traits to specific performance criteria.