The virtuous cycle of entrepreneurial identity and experience – a longitudinal analysis

Abstract Entrepreneurial identity represents a powerful motivating force that can help explain individuals’ entrepreneurial activity and has been found to be relevant to several new business venturing decisions. Although identity may entail some degree of temporal stability, personal agency and social interactions may change it. While understanding entrepreneurial identity formation and development is a promising research topic, longitudinal analyses are lacking. In this study, we propose a longitudinal model in which intra-individual entrepreneurial identity aspirations exhibit path dependency, and test different types of entrepreneurial experiences as mediators affecting this relationship. Applying structural equation modeling to a longitudinal sample composed of individuals formerly enrolled in higher education programs, we found that past entrepreneurial identity aspirations predicted identity aspirations 11 years later. We also found that, while prior successful entrepreneurial experiences positively influenced current identity aspirations, unsuccessful experiences did not decrease them. It is noteworthy that these results hold even when considering working for others in new business projects as an (indirect) entrepreneurial experience. Our study contributes to the literature by extending the scarce longitudinal evidence that supports the temporal stability of entrepreneurial identity and by adding novel evidence regarding the mediating impact of real-life entrepreneurial experiences while considering both their direct and indirect nature and their positive and negative outcomes. This study may be relevant to policymakers and entrepreneurship educators by providing evidence of a virtuous cycle between entrepreneurial identity and action and its boundary conditions.