Happy Entrepreneurs Perform Better: The Mediating Role of the Entrepreneurial Process

This study builds on the existing study of Baron (2008) in which he developed a theoretical framework suggesting that entrepreneurs experiencing positive affect perform better in the entrepreneurial process. The entrepreneurial process consist of the five key aspects: opportunity recognition, acquisition of financial and human resources, development of broad social networks, capacity to respond effectively to highly dynamic environments, and tolerance for intensive levels of stress. I will commence by investigating the relation between positive affect and entrepreneurial process empirically. Additionally, I extend Baron's theory with entrepreneurial success because evidence shows that positive feelings have an influence on business performance. Hereafter I predict a positive relationship between positive affect and entrepreneurial success mediated by the entrepreneurial process. Hypotheses are tested using a dataset consisting of 736 Dutch entrepreneurs. As predicted and hypothesized, empirical results in this study find support for Baron's theory. There is a positive relationship between positive affect and the five key aspects of the entrepreneurial process. The entrepreneurial process is also positively related to success. Multiple analyses support the mediating relationship for several measures of entrepreneurial success. The limitations and suggestions for future research are provided.