WHY ARE OPTIMISTIC ENTREPRENEURS SUCCESSFUL?AN APPLICATION OF THE REGULATORY FOCUS THEORY

Does entrepreneurial optimism affect business performance? Using a unique data setbased on repeated survey design, we investigate this relationship empirically. Ourmeasures of ‘optimism’ and ‘realism’ are derived from comparing the turnovergrowth expectations of 133 owners-managers with the actual outcomes one year later.Our results indicate that entrepreneurial optimists perform significantly better in termsof profits than pessimists. Moreover, it is the optimist-realist combination thatperforms best. We interpret our results using regulatory focus theory....