Psychological capital and the startup capital–entrepreneurial success relationship

Abstract

Research has demonstrated that psychological strengths have important influences on entrepreneurial behavior. The current study explored the interaction between entrepreneurs’ positive psychological capital and startup capital in leading to entrepreneurial success. Focus is on how owners of small scale enterprises use their psychological strengths to achieve their business goals. Using a sample of 384 entrepreneurs selected from the two leading business districts in Uganda, we observe that optimism is the component of psychological capital that significantly moderates the relationship between startup capital and entrepreneurial success. Both startup capital and psychological capital are significant predictors of entrepreneurial success; however, psychological capital is the better predictor. The theoretical and practical implications of these findings on entrepreneurial behavior, success and entrepreneurship promotion interventions are discussed.