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RESEARCH PRODUCT
Forecasting Errors of New Venture Survival
Ari HyytinenAri HyytinenJukka LahtonenMika Pajarinensubject
Economics and EconometricsEntrepreneurshipActuarial scienceForecast errorFinancial economicsStrategy and Management8. Economic growthEconomicsStrategic managementBelief formationBusiness and International Managementdescription
This article studies entrepreneurs' forecast errors around market entry. Using data on nascent entrepreneurs in the U.S. and start-ups in Finland, we find that besides being overoptimistic on average in both countries, entrepreneurs' survival expectations can barely distinguish survival from exits. Moreover, about one fourth of the entrepreneurs do not provide an estimate for the survival of a typical venture. However, among those that do provide it, the estimates are less overoptimistic. We also compare the forecast accuracy of entrepreneurs to those of macroeconomic forecasters. Our findings provide guidance for the development of positive theories of entrepreneurial belief formation and overoptimism. Copyright © 2014 Strategic Management Society.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2014-12-01 | Strategic Entrepreneurship Journal |