Selection bias towards failed entrepreneurs

Based on attribution theory, failure is either attributed to interpersonal factors or external factors. The same phenomenon happens in the workplace in regard to business failure. Research results (Korunka, Kessler, Frank ,& Lueger, 2010; Cardon, Stevens, & Potter, 2011; Landier, 2005; Franco & Haase, 2010) indicated that numerous external and internal factors contribute to business failure. Although the environment plays a vital partial role in business failure, individuals who are at the top of the organization - such as chief officers and managers, are often blamed for the business failure. Several studies found stigma associated with failed small business owners (Sun, Ding, & Gu, 2015; Damaraju, Barney, & Dess, 2010; Landier, 2005; Singh, Corner, & Pavlovich, 2012). In addition, bankruptcy and unemployment, potential consequences as result of the business failure, have their own sets of stigma (Maroto, 2012; Thorne, Anderson, 2006; Orovitz, 2013; Pearn, 2015; Eriksson, & Rooth, 2014). After the business failure, one possible choice for a former entrepreneur is looking for employment. Research (Simmons, Wiklund, & Levie, 2014) indicated that the societal stigmatization and visibility of failure information because of the government policy have a joint impact on business owners’ entrepreneurship choices after failure. As for the United States where has low stigmatization of business failure but the high visibility of failure information, failed business owners will be more likely to reenter the workplace and work for others. The study will examine whether job applicants’ entrepreneurial experience has an impact on hiring decision making and whether hiring personnel’s personal entrepreneurial experience has moderation effect on the relationship. Authors hypothesize that among job applicants with otherwise similar qualification, job applicants with successful entrepreneurial experience are most likely to be selected, followed by job applicants without entrepreneurial experience, and job applicants with failed entrepreneurial experience are least likely to be selected. In addition, it is hypothesized that the correlation between job applicant’s entrepreneurial experience and hiring decision making is enhanced if hiring personnel had successful personal entrepreneurial experience or lack of past personal entrepreneurial experience and is weakened if hiring personnel had failed personal entrepreneurial experience. This specific area – stigma associated with failed entrepreneurs – is not well researched. This study will fill in the blank space while providing information to individuals with business failure as well as bringing awareness to practitioners about this special group of job candidates