Little is currently known about the cognitive processes entrepreneurs engage in as they develop and implement strategies. A computer simulation was used to investigate this question. Repeated measures regression analysis indicated that participants using a learning goal were able to keep their simulated firms running longer than those using a performance outcome goal. Strategy mediated the relationship between task-specific self-efficacy and performance. Conversely, task-specific self-efficacy mediated the relationship between strategy use and performance. General self-efficacy added explanatory power to firm survival, even after controlling for the effects of specific self-efficacy. Limitations and implications for future research are discussed.
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