Feel dragged out: a recovery perspective in the relationship between emotional exhaustion and entrepreneurial exit

The paper examines whether and how emotional exhaustion influences actual entrepreneurial exit—defined as quitting an entrepreneurial career—and the conditions under which this relationship is more or less likely. While prior work has linked exit decisions to firm performance and human capital, psychological antecedents remain underexplored. Given entrepreneurship’s demands (continuous effort, commitment, long hours, role ambiguity), stress and exhaustion may trigger exit, yet not inevitably for all entrepreneurs. Drawing on conservation of resources (COR) theory, the authors hypothesize that emotional exhaustion increases exit likelihood (resource loss), and that subjective well-being—affective (AWB) and cognitive (CWB)—acts as positive psychological resources that can buffer this effect.

The study is grounded in COR theory (Hobfoll), which posits individuals strive to protect and build resources; resource loss leads to stress and exhaustion, which can drive negative outcomes. Prior research highlights entrepreneurs’ resource deficits and mental health issues (e.g., depression) as antecedents to exit intentions or behaviors. Entrepreneurs face complex, emotionally demanding roles and longer working hours, elevating exhaustion risks. The stressor–strain model suggests environmental stressors yield psychological strain (emotional exhaustion), potentially leading to withdrawal behaviors like exit. Subjective well-being splits into AWB (frequency of positive/negative affect; event-specific, short-term) and CWB (overall life satisfaction; longer-term), which are conceptually and functionally distinct and may differentially relate to behaviors. The authors develop hypotheses: H1—emotional exhaustion increases exit likelihood; H2—AWB (H2a) and CWB (H2b) weaken the positive exhaustion–exit relationship.

Data: German Socio-Economic Panel (GSOEP), nationally representative longitudinal survey. Sample: individuals self-employed in 2012 (T1) with occupational status tracked in 2013 (T2); excluded self-employed farmers and helpers in family business; restricted age to 18–65 to limit retirement effects. Final N = 997 self-employed; mean age 46; average education 13 years; average net income €40,959; 62% male; 63% married. Exit rate: 121 cases (11.6%). Measures: Entrepreneurial exit (binary): 1 if self-employed in 2012 and not self-employed in 2013; 0 otherwise (year-lag approach per Hessels et al., 2018). Emotional exhaustion: 4 items from Cohen et al. (1983) inventory (e.g., accomplished less due to emotional problems; felt less careful due to emotional problems), 5-point scale (1=never to 5=always); sum score; α=0.77. Affective well-being (AWB): 4 items from Schimmack (2009) and Schimmack et al. (2008) (e.g., how often felt angry/happy in last 4 weeks), 5-point scale; negative items reverse-coded; sum score; α=0.86. Cognitive well-being (CWB): single life satisfaction item (1–10) per Schimmack (2009). Controls: perceived stress (remaining six items from stress/exhaustion inventory; 5-point scale), risk-taking (single item 0–10; Dohmen et al., 2011), age (years), education (years), net income (log of annual net income in euros), gender (male=1), marital status (married=1), number of children in household (integer). Analysis: Binary logistic regression with robust standard errors; reported average marginal effects due to nonlinearity and interaction interpretation issues (Ai & Norton, 2003). Three models including interactions incrementally and a full model; assessed multicollinearity via correlations and VIF (<2). Robustness: linear probability model (LPM) estimated (Schleich et al., 2021), yielding consistent results with logistic models.

- Emotional exhaustion significantly increases the probability of entrepreneurial exit. In Model II, the marginal effect of emotional exhaustion is 0.1718 (SE=0.0581; p<0.01), implying a one-unit increase in exhaustion raises exit probability by 17.18 percentage points. - Moderation: Affective well-being (AWB) and cognitive well-being (CWB) weaken the positive exhaustion–exit link. Interaction marginal effects: Emotional exhaustion × AWB β≈ -0.0316 (p<0.01); Emotional exhaustion × CWB β≈ -0.0168 (p<0.01). Decomposition indicates the exhaustion–exit relationship becomes weaker and can turn negative at higher levels of AWB or CWB. - Model fit: Wald χ² significant (p<0.01) across models; Pseudo R² ~0.31–0.32. Correlations below thresholds; average VIF <2 (no multicollinearity). Robustness LPM confirms direction and significance. - Descriptive: 11.6% (121/997) exited; means—emotional exhaustion 2.28 (SD 0.54), AWB 2.56 (SD 0.55), CWB 6.98 (SD 2.00), perceived stress 3.21 (SD 0.44).

Findings support the COR framework: emotional exhaustion (resource loss) increases the likelihood of entrepreneurial exit, but positive psychological resources (AWB, CWB) buffer this effect by facilitating recovery and psychological distancing from work during off times. This extends exit research beyond performance-based antecedents to include psychological mechanisms, highlighting that actual exits (not merely intentions) are linked to depletion of psychological resources. AWB (short-term affective states from positive events and achievements) and CWB (broader life satisfaction shaped by family, social networks, lifestyle) enable entrepreneurs to counter exhaustion, regain energy, and maintain engagement, thereby reducing exit likelihood. The results underscore the importance of resource trade-offs in entrepreneurial decision-making and the work–life interface, where well-being helps mitigate the carryover of exhaustion into nonwork periods.

Emotional exhaustion is a critical psychological precursor to actual entrepreneurial exit. Subjective well-being—both affective and cognitive—serves as a recovery mechanism that attenuates the exhaustion–exit relationship. The study contributes by focusing on real exit events and integrating COR theory to explain psychological resource dynamics in entrepreneurial decisions. Future research should further explore psychological processes in exit decisions and examine additional positive resources (e.g., entrepreneurial passion, self-efficacy, emotional attachments) that may help entrepreneurs cope with stress and exhaustion.

- Sample scope: Self-employed individuals in Germany used as a proxy for entrepreneurs; although many characteristics overlap, some heterogeneity remains. Certain categories (farmers, family business helpers) were excluded to improve relevance, but sampling of confirmed founders could refine generalizability. - Measurement timing: AWB captured annually, whereas theory suggests AWB has short-term dynamics best assessed via diary methods; this may attenuate precision of AWB effects. - Scope of recovery mechanisms: The study focuses on subjective well-being (AWB, CWB) only; other psychological resources (e.g., entrepreneurial passion, self-efficacy, emotional attachments) could provide complementary explanations and should be examined in future work.