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Dawn R. DeTienne, Dean A. Shepherd and Julio O. De Castro

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Dawn R. DeTienne, Dean A. Shepherd and Julio O. De Castro

Under-performing firms persist even though existing theoretical perspectives indicate that they should be selected out of the market. Building upon threshold theory [Gimeno, J., Folta, T., Cooper, A., Woo, C., 1997. Survival of the fittest? Entrepreneurial human capital and the persistence of underperforming firms. Administrative Science Quarterly 42, 750–783.] and using Staw's [Staw, B.M., 1981. The escalation of commitment to a course of action. Academy of Management Review 6 (4), 577–587.] theoretical model of commitment to a course of action, we explore and test the factors that lead entrepreneurs to persist with underperforming firms. We found environmental munificence, personal investment, personal options, previous organizational success, and perceived collective efficacy impact the decision to persist with an under-performing firm. In addition, extrinsic motivation moderates those relationships. This research adds to the growing literature on highly persistent, under-performing firms and complements and extends threshold theory.
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Edited by Dawn R. DeTienne and Karl Wennberg

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Edited by Dawn R. DeTienne and Karl Wennberg

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Edited by Dawn R. DeTienne and Karl Wennberg

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Edited by Dawn R. DeTienne and Karl Wennberg

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Edited by Dawn R. DeTienne and Karl Wennberg

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Edited by Dawn R. DeTienne and Karl Wennberg

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Dawn R. DeTienne and Karl Wennberg

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Edited by Dawn R. DeTienne and Karl Wennberg