Time and Entrepreneurial Risk Behavior

Risk and risk behavior form an important segment of the entrepreneurship literature. Entrepreneurial risk behavior has been studied with both trait and cognitive approaches, but the findings do not adequately explain either how entrepreneurs differ from non-entrepreneurs, or how different types of entrepreneurs can be specified in terms of their risk behavior. This paper is an attempt to address these issues by introducing two temporal attributes that we consider significant for understanding risk behavior, given that risk is inherently embedded in time. First, we suggest the notion of risk horizon, differentiating short-range risk from long-range risk. Second, we examine the risk behavior of entrepreneurs in terms of their individual future orientation, in tandem with their risk propensity. We propose a temporal framework that seeks to explain, at once, the different types of risk behavior among entrepreneurs as well as the distinction between entrepreneurs and non-entrepreneurs. The framework is also applied to networking and alliancing activities of entrepreneurs. Finally, a number of propositions are developed to facilitate empirical testing of the insights implicit in the temporal framework of entrepreneurial risk behavior.