Presented at the 27th International Congress of Applied Psychology, Melbourne, Australia July 11th-16th, 2010

1. Entrepreneurs’ psychological capital, innovativeness and business performance MarjanGorgievski, Ph.D.Erasmus University Rotterdam The Netherlands 27th International Congress of Applied Psychology, Melbourne, Australia July 11th-16th, 2010

2. Theoretical background 1 Business and entrepreneurship literature: What predicts good entrepreneurial performance? Personality (e.g., Rauch & Frese, 2007; Zhao & Seibert, 2006)? Competencies (e.g. Markman, 2007)?

4. Ex role performance

5. Creativity

6. Financial turnoverJob resources Personal resources (Personal characteristics) Work engagement e.g. Bakker & Demerouti, 2007

7. EmpiricalEvidence Ample evidence for a positive gain spiral of resources and work engagement (Salanova, Schaufeli, Xanthopoulou & Bakker, 2010) Ampleevidenceforthe positive relationship between work engagement and performance, also for entrepreneurs (E.g. Gorgievski, Bakker & Schaufeli, 2010) Concerning business performance: General well-being (defined as absence of health complaints) predicts farmers’ business success in a 10-year follow- up study (Gorgievski, Bakker & Giesen, 2000) and a 3 wave longitudinal study spanning 2 years (Gorgievski, Bakker, Schaufeli, Van der Heijden, 2005; Gorgievski, Bakker, Schaufeli, Van der Veen & Giesen, 2010)

8. Theoretical background 3 Positive Work and Organizational Psychology Health is more than the absence of complaints Construed positively, health encompasses diverse aspects of flourishing (Ryff & Singer, 2000): leading a meaningful and purposeful life having quality ties to others how these core features of the well-lived life affect biology Flourishing: thrive under challenge

9. Reasearch Question Is thriving part of the positive spiral of personal resources, performance and well-being, similar to work engagement and mental health complaints? Concerning personal resources, we looked at psychological capital: Optimism, Hope, Self-efficacy & Resilience (Luthans, Youssef & Avolio, 2007) Concerning performance we looked at entrepreneurs’ innovativebehavior, business innovationand business growth

10. Method N=102 business owners (response rate 29%) Invited by telephone, web based survey Mean age 47 years (sd 8.73) On average 14 years in business (sd 8.96) 84% males 29% from entrepreneurial family 83% had started their businesses Acknowledgements: the presenter likestothankDominiqueYntemafor her help collecting the data.

11. Measurements Individual level variables: psychological capital (Luthans et al, 2007; translated by Bakker, unpublished): self-efficacy (4 items, alpha = .93), optimism (3 items, alpha = .69), self-esteem (5 items, alpha = .67) resilience (5 items, alpha = .80); work-engagement (UWES; 9 items, alpha = .92); flourishing (Diener, Wirtz, Tov, Kim-Prieto, Choi, Oishi, & Biswas-Diener, 2009; 11 items, alpha = .77); business owners’ innovative behaviour (Janssen, 2003; 6 items, alpha = .90); Firm level variables: company level innovative strategy and resources (Analysis of Balanced Innovation; Plompen, 2003; 7 items, alpha = .91) andpercentage of profit derived from new products (1 item) entrepreneurs’ reports of firm financial growth (Stephan, Dej, Lukes & Richter, 2007; 4 items, alpha = .89);

12. Final Model Flourishing versus work engagement Performance measures Personal Resources Flourishing .56 .74 PsyCap Selfefficacy Optimism Hope Resilience .61 Business growth Personal Innovativeness .60 Business Innovativeness .46 .ns Work engagement Model fit :  2 (130 df) = 257,60; TLI = .87; CFI = .85; RMSEA = .10

13. FullMediationEffects .60* .36* .61* .40* Business growth Business Innovativeness Personal Innovativeness Flourishing Work engagement Mediation1 Mediation2 Mediation3 Mediation 1: Sobel: 2.01, p < .05; Betawithout mediator: .25* Mediation 2: Sobel: 1.99, p < .05; Beta without mediator: .51* Mediation 3: Sobel: 1.97, p < .05; Beta without mediator: .33*

14. Conclusions The findings once more underscore that a balanced and optimal well-being is key to entrepreneurial success. flourishing is an important concept which is related to company performance.