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How does the grand challenge of refugees influence nascent entrepreneurs in host countries? To explore this question, we build on social identity theory and analyse how the 2015 European refugee event is related to the strength of different founder social identities (i.e. Darwinian, Communitarian, and Missionary founder social identities) of nascent entrepreneurs in the countries accommodating the refugees. Using a dataset of 6,096 nascent entrepreneurs from 24 European countries, we reveal a positive relationship between the refugee event and the strength of the Communitarian founder social identity. This relationship is even stronger when the previous percentage of foreign migrants in a country is lower and is mediated by the human health and social work industry. Interestingly, we do not find significant relationships between the refugee event and the strengths of the Darwinian or Missionary founder social identity, respectively. Hence, refugees as a grand challenge are likely to have divergent influences on different types of entrepreneurship in society.

How are social entrepreneurs different from commercial entrepreneurs? This study sheds light on this issue by applying the perspective of entrepreneurial cognition and by arguing that social entrepreneurs are even more susceptible to cognitive biases than commercial entrepreneurs. The empirical study of 205 Swiss entrepreneurs could confirm that social entrepreneurs tend to be more overconfident and prone to escalation of commitment than commercial entrepreneurs, while the study found no differences for illusion of control. The findings indicate that cognitive biases are an important puzzle piece to understand the differences between social and commercial entrepreneurs.