In the eye of the beholder: How regulatory focus and self-efficacy interact in influencing opportunity recognition

Abstract

Although there is evidence that regulatory focus is associated with opportunity exploitation, there is a lack of research examining its role at the early stages of opportunity recognition. The present study makes two major contributions to address this gap. First, we demonstrate that entrepreneurs' promotion focus is positively related to opportunity recognition, whereas prevention focus is not significantly related to opportunity recognition. Second, integrating two theories of self-regulation – regulatory focus theory and self-efficacy theory – our findings reveal that a high promotion focus compensates for entrepreneurs' low levels of creative and entrepreneurial self-efficacy in opportunity recognition. Our study extends extant cognitive theories of opportunity recognition.