The Effects of Coping Strategies on Entrepreneurs' Psychological Well-Being Under Uncertainty

Abstract

Self-employment and business ownership require high personal commitment and emotional involvement, often accompanied by significant risk and uncertainty. Entrepreneurs need effective coping strategies to manage stress and anxiety, which, if unmanaged, can harm their well-being and impair decision-making. Given entrepreneurs' crucial roles in generating employment, innovation, and economic growth, understanding how they cope with adversity is vital. Despite its importance, research on coping strategies and entrepreneurial outcomes has yielded inconsistent results, with limited focus on entrepreneurs' psychological well-being (PWB). This study addresses these gaps by investigating which coping strategies enhanced entrepreneurs' PWB under the uncertainty of the COVID-19 pandemic. Drawing on theories of coping and PWB, we propose and test a conceptual model using data from an anonymous online survey of 179 self-employed individuals and business owner-managers in Malta (EU). Findings reveal that task-based and avoidance-based coping strategies positively influence PWB under uncertainty, whereas emotion-based coping negatively impacts PWB. This research contributes to the literature on entrepreneurial coping and well-being by elucidating the effects of different coping strategies during times of high adversity. This has important practical implications as entrepreneurs who effectively cope with uncertainty and maintain higher PWB are better equipped to make sound decisions and implement successful strategies.