Keep Calm and Carry On: Emotion Regulation in Entrepreneurs’ Learning from Failure

Abstract

While failure urges entrepreneurs to learn, it also generates strong emotions that may hinder learning behaviors. Drawing on affective events theory, we develop a model reconciling the countervailing effects of failure. In particular, we focus on failure velocity—rate at which failure events are experienced—to understand entrepreneurs’ learning from failure. Survey data from entrepreneurs in the information technology industry reveals an inverted U–shaped relationship between failure velocity and learning behaviors. Emotion regulation moderates this relationship. When failure velocity rises beyond an inflection point, its relationship with learning behaviors is more positive for entrepreneurs with higher emotion regulation.