The Family’s Financial Support as a “Poisoned Gift”: A Family Embeddedness Perspective on Entrepreneurial Intentions

We argue that greater availability of financial support by the family for creating a new venture entails stronger financial and non-financial obligations. Cognizant of these obligations, potential founders anticipate negative performance implications for the planned firm and threats to the family system in the case of their non-fulfillment. We thus postulate that the formation of actual entrepreneurial intentions is less likely the greater the available financial support. We confirm this by studying a sample of 23,304 respondents from 19 countries and find the negative relationship to be dependent on family cohesion and on individual entrepreneurial self-efficacy.

Family’s Financial Support as Poisoned Gift: A Family Embeddedness View on Entrepreneurial Intentions

How is expected financial support by the family related to individuals' entrepreneurial intentions? By drawing on family embeddedness literature we take a novel perspective and argue that the stronger the financial support that individuals will receive from their family to start a new venture is, the lower is the likelihood that they actually form entrepreneurial intentions. We confirm this prediction on a sample of 23,866 individuals from 19 countries and find in addition that the negative relationship between the expected financial support by the family and entrepreneurial intentions is contingent on the level of family cohesion and individuals' entrepreneurial self-efficacy. These results add valuable knowledge to the entrepreneurship and family embeddedness literature.