Differentiating the entrepreneurial life story: investigating narrative identity in relation to business failure

Psychological research on entrepreneurs has concentrated on personality and individual differences believed to influence entrepreneurial behaviour. This paper first examines four prominent theoretical explanations of the entrepreneurial personality: the psychoanalytic, trait, cognitive and social-constructionist approaches. It is argued these approaches do not fully account for the individual differences that influence entrepreneurs’ behaviour, and pay insufficient attention to entrepreneurs’ actual behaviours within the entrepreneurial context. Additionally, research on individual difference factors has neglected entrepreneurs’ behaviour beyond the start-up phase of entrepreneurship. Business failure is highlighted as a post-startup event that has implications for a psychological understanding of entrepreneurs. McAdams’ (1985; 1993) narrative identity theory of personality and Life Story Interview (LSI) selfnarrative assessment is introduced as a holistic, self-defined personality construct that addresses limitations of earlier theoretical approaches and enables qualitative investigation of how entrepreneurs personally react to the event of business failure. Life story interviews were conducted with 40 currently successful entrepreneurs with previous experience of business failure. It is concluded that entrepreneurs may share a common narrative identity and how they conceptualise their self-understanding may influence their response to business failure.