Chapter 2 Stress Events Theory: A Theoretical Framework for Understanding Entrepreneurial Behavior

Although scholarly inquiry into entrepreneurial stress has existed for nearly 40 years, little is known about how events drive stress responses in entrepreneurs, and how entrepreneur coping responses impact their well-being, relationships, and venture performance. In response to these deficiencies, the authors propose a stress events theory (SET) which they apply to an entrepreneurial context. The authors begin by providing a brief review of existing literature on entrepreneurial stress, which highlights unique stressors and events that entrepreneurs encounter. The authors then introduce event systems theory as developed by Morgeson, Mitchell, and Liu (2015 ). From this foundation, the authors develop SET, which describes how entrepreneurs react to particular event characteristics (novelty, disruptiveness, criticality, and duration). Additionally, the authors propose that how entrepreneurs interpret events drives coping choices, and that the accuracy of these coping choices subsequently differentiates the quality of entrepreneur well-being, interpersonal relationships, and venture-related consequences. The authors conclude with a discussion of contributions and areas of future research using our proposed theory.