This study addresses a core question in entrepreneurship: why do some entrepreneurs successfully identify opportunities while others fail? It explores the role of dispositional optimism, a psychological bias that influences how entrepreneurs perceive and act on opportunities. Moving beyond traditional economic and resource-based explanations, we argue that optimism plays a critical role in opportunity recognition. Based on a sample of 264 entrepreneurs who own small businesses across various sectors, our findings reveal that optimism directly enhances an entrepreneur's ability to identify opportunities and mediates the relationship between human capital and opportunity recognition. Furthermore, optimism serves as a bridge between demographic factors and entrepreneurial success, highlighting the psychological dimensions often overlooked in entrepreneurship research. By integrating psychological traits with human capital and demographic factors, this study offers a multidimensional framework for understanding how entrepreneurs recognize opportunities. These insights underscore the importance of incorporating psychological perspectives into entrepreneurship research, broadening our understanding of the drivers of entrepreneurial success.
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