ABSTRACT
Drawing on social cognitive theory and social network theory, this study investigates the relationships between managerial ties, entrepreneurs’ cognitive bias, and the effectuation and causation of behavioural modes of entrepreneurship. It uses structural equation modelling to analyse a sample of 214 entrepreneurs in China. The empirical results indicate that business ties lead entrepreneurs to use effectual approaches by prompting the entrepreneurs’ overconfidence, whereas institutional ties enable entrepreneurs to use both causation and effectuation by prompting the entrepreneurs’ illusion of control. This study delineates how different types of managerial ties affect causation and effectuation through different cognitive mechanisms.
