When Theory Boosts Self Confidence

Starting from a seminal paper by Arnaldo Camuffo and Alfonso Gambardella, researchers from the Bocconi Management Department have gathered convincing evidence of the benefits of a scientific approach to entrepreneurship.

Scientists develop theories, test them through experiments based on available data, modify their theories based on the experimental results, and then develop new theories to test. According to the underlying hypotheses of this research strand, entrepreneurs who adopt the scientific approach make superior decisions that lead to better performance.

Immediately after obtaining his PhD in Business Administration and Management from Bocconi in June, Andrea Coali was awarded the William F. Glueck Best Paper Award by the Strategic Management Division of the Academy of Management during the 2023 Annual Meeting in Boston for a paper stemming from this research stream. His paper, focusing on agricultural entrepreneurship in Tanzania, demonstrates the superiority of a fully scientific approach (emphasizing both theory formulation and testing) compared to a rational approach centered solely on testing.

In detail, Coali and the two co-authors with whom he shared the award (Francesca Bacco from Vrije Universiteit Amsterdam and Audra Wormald from the University of North Carolina, Chapel Hill) used data from an 18-month field experiment conducted in collaboration with Sugeco, an incubator for agricultural start-ups linked to the Sokoine University of Agriculture in Morogoro, Tanzania. A group of 151 small-scale agricultural entrepreneurs was randomly divided into those who would undergo training focused on testing and a group that would receive training emphasizing both testing and theory development.



The experiment produced an initial study conducted by a larger group of scholars, which highlights how the entrepreneurs trained in theory development achieve better results in terms of revenues and profits. Coali and his co-authors, in their analysis, aimed to verify that one of the potential mechanisms for the transmission of benefits could be an increased awareness of their own abilities and greater self-confidence. "We measured, at the conclusion of the training interventions, the entrepreneurs' confidence in their ability to tackle obstacles related to their business and environment. In some cases, these were external obstacles, independent of the entrepreneur's will and actions, while in other cases, they were obstacles whose severity depended on individual skills and specific abilities."

Perceived ability and self-confidence increased more in the group subjected to theory training than in the group trained only in testing. "Even more importantly," Coali concludes, "the effect was determined by the growth of confidence in overcoming obstacles related to individual skills."

During the same AOM Annual Meeting, Arnaldo Camuffo and Diego Jannace received the Best Empirical Paper Award from the Entrepreneurship Division with a paper belonging to the same research strand.

Francesca Bacco, Andrea Coali, Audra Wormald, "Entrepreneurship Training and Founders' Perceptions of Ability: A Randomized Control Trial with Entrepreneurs in Tanzania."