predicting entrepreneurial intention presentation

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Juan A. Moriano, José F. Morales & Francisco J. Palací Department of Social and Organizational Psychology Universidad Nacional de Educación a Distancia (UNED) ISTAMBUL 13th MAY 2005 The XII. European Congress of Work and Organizational Psychology PREDICTING ENTREPRENEURIAL INT FROM THE THEORY OF PLANNED BEH

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Interest in entrepreneurship is growing in many countries due to the close link between new venture creation and economic development (Reynolds, Bygrave, Autio, Cox and Hay, 2002). From a psychological standpoint, the entrepreneurship research resorts to psychosocial variables, such as motivations, personality traits, attitudes, abilities, and others, to account for the entrepreneurial behavior. Psychological literature has shown that intentions are the best predictor of planned behavior (Ajzen, 1991). Venture creation emerges over time and involves a considerable planning, making entrepreneurship a type of planned behavior (Bird, 1988; Katz and Gartner, 1988; Krueger, Reilly and Carsrud, 2000) for which intention models are ideally suited. In this study the theory of planned behavior (Ajzen, 1991) is the framework to explain the entrepreneurial intention. A sample of 2195 Spanish students (57.9% female), with an average age of 22 years and currently facing important career decisions, filled out a survey with different scales tapping intentions, attitudes, social norms and self-efficacy. Relationships between attitudes, social norms, self-efficacy and entrepreneurial intention were examined through SEM (Structural Equation Modeling). Although, only 13.5% of the students showed more intention to work as self-employees than as employees, attitudes, subjective norms and self-efficacy explained about 25% of the variance of entrepreneurial intention, thus confirming the validity of the proposed model.

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Page 1: Predicting Entrepreneurial Intention Presentation

Juan A. Moriano, José F. Morales & Francisco J. Palací

Department of Social and Organizational Psychology

Universidad Nacional de Educación a Distancia (UNED)

ISTAMBUL 13th MAY 2005

The XII. European Congress of Work and Organizational Psychology

PREDICTING ENTREPRENEURIAL

INTENTION FROM THE THEORY OF

PLANNED BEHAVIOR

Page 2: Predicting Entrepreneurial Intention Presentation

The study of entrepreneurship within Psychology field is characterized by:

1. A lot of descriptive and partial studies “Entrepreneurial Personality”

2. These studies have received several methodological and theoretical critiques

(Baron, 2002; Gartner, 1988; Robinson, Stimpson, Huefner y Hunt, 1991;

Shane y Venkataraman, 2000; Shaver y Scott, 1991)

3. Lack of solid theories that consolidate the previous studies

Therefore comes the necessity to go deeper into the study of

entrepreneurship and to apply models from Social Psychology field.

These models need to take into account not only the personal

characteristics, but also the social variables and the interaction

between them in order to explain and predict entrepreneurial behavior.

Therefore comes the necessity to go deeper into the study of

entrepreneurship and to apply models from Social Psychology field.

These models need to take into account not only the personal

characteristics, but also the social variables and the interaction

between them in order to explain and predict entrepreneurial behavior.

INTRODUCTION

Page 3: Predicting Entrepreneurial Intention Presentation

WORK GOALS

To analyze the applicability of a Social Psychology Model in order to explain and predict the entrepreneurial intention

Subjective Norms

Self-EfficacyAttitudes

EntrepreneurialIntention

Page 4: Predicting Entrepreneurial Intention Presentation

THEORETICAL REVIEW

ENTREPRENEURIAL INTENTIONENTREPRENEURIAL INTENTION

Entrepreneurship is the type of planned behavior for which intention models are ideally suitable (Bird, 1988; Katz and Gartner, 1988)

INTENTION MODELS:INTENTION MODELS:

1. Shapero’s Model of the “Entrepreneurial Event” (SEE) (Shapero, 1975)

2. Model of Implementing Entrepreneurial Ideas (Bird, 1988)

3. The Expectancy Theory Model (Vesalainen and Pihkala, 1999)

4. The Utility Maximization Model of Career Choice (Douglas, 2002)

5. Theory of Planned Behavior (Ajzen, 1991)

Page 5: Predicting Entrepreneurial Intention Presentation

THEORETICAL FRAMEWORKTheory of Planned Behavior (Ajzen, 1991)

AttitudeAttitude

Subjective Norm

Subjective Norm

Perceived Behavioral Control

Perceived Behavioral Control

Intention Behavior

StudyRegression Coefficients Adjusted R²

AttitudeSubjective

NormPBC

Entrepreneurial Intention

Tkachev & Kolvereid (1999) .11* .28* .44* .45

Autio et al. (2001) .24*** .02* .36*** .30

Page 6: Predicting Entrepreneurial Intention Presentation

METHOD

The sample size was 2190 Spanish students

41.1% were men and 57.9% were women

The average age was 22 years old

The students were mostly university students (63.3%) and technical college students (26.8%)

Most of the participants were unemployed and dedicated only to their studies (84.5%)

Participants

Page 7: Predicting Entrepreneurial Intention Presentation

METHOD

1. Personal data: Gender, age, level of education and work situation

2. Entrepreneurial intention

a) Direct measure

What is your career intention? (in a scale from 1 to 10)

a) Start your own business or work on your own

b) Work as an employee in a private company

c) Work as a government employee

b) Indirect measure

A scale consisted of 6 items which evaluate in an indirect way the entrepreneurial intention.

For example, “I have a specific idea for starting a new venture”

Measures

Page 8: Predicting Entrepreneurial Intention Presentation

3. Attitudes scales

a) General attitude towards Self-Employment

b) Attitude funtions of Self-Employment (Grande, 2001)

c) Specific attitudes towards: Achievement, Innovation, Independence, Change, Risk and Salary (EAO, Robinson et al., 1991)

4. Subjective Norm

a) Social legitimacy of Entrepreneurship

b) Social Support

c) Entrepreneurship Support from the Educational Center

5. Perceived Behavioral Control

Entrepreneurial Self-Efficacy Scale (De Noble, Jung, Ehrlich, 1999)

Measures

METHOD

Page 9: Predicting Entrepreneurial Intention Presentation

• The entrepreneurial intention obtained the lowest average score.

• Only 13.5% of the participants have higher intention of working as self-employed than as employed.

• Differences between men and women:

a) Men: Higher entrepreneurial intention

b) Women: Higher intention to work in a private company or for the government

RESULTS: ENTREPRENEURIAL INTENTION

Figure 1. Career Intention

Note. 10-point scale ranging from 1 (not interested) to 10 (totally interested).*** Mean differences significant at p < .001

7.69

5.98

5.24

4 5 6 7 8

Car

eer

Inte

ntio

n

Entrepreneur

Government Employee

Employee in privatecompany

18.5% of the men prefer to become an entrepreneur in compare with 9.8% of the women

Page 10: Predicting Entrepreneurial Intention Presentation

RESULTS: ATTITUDES

Variable Factors ItemsReliability

CoefficientsMean SD

Correlation with Entrepreneurial

Intention

General attitude towards Self-Employment

Government level

3 .64 4.01 0.65 .170**

People level 2 .51 3.56 0.72 .259**

Attitude funtions of Self-Employment

Personal development

8 .73 3.85 0.48 .229**

Community contribution

3 .44 3.61 0.55 .100**

Disadvantages 6 .56 3.50 0.43 .084**

Social status 3 .57 3.10 0.76 .084**

Specific attitudes

Achievement 6 .59 4.02 0.43 .087**Innovation 5 .56 3.76 0.52 .177**Independence 5 .59 3.21 0.61 .154**Risk 4 .41 3.34 0.63 .154**Initiative 2 .32 3.48 0.79 .187**

Salary 5 .60 3.16 0.70 .068**

Note. 5-point scale ranging from 1 (strongly disagree) to 5 (strongly agree) ** Coefficients significant at p < .01

Page 11: Predicting Entrepreneurial Intention Presentation

RESULTS: SUBJECTIVE NORM

Variable Factors ItemsReliability

CoefficientsMean SD

Correlation with Entrepreneurial

Intention

Social legitimacy of Entrepreneurship

- 2 - 3.21 0.93 .071**

Social Support

Family 3 .75 4.16 0.81 .191**

Friends and professors

3 .60 3.67 0.56 .099**

Entrepreneurial Support from Educational Centers

Encouraging 3 .75 1.96 0.87 .165**

Activities 2 .54 1.76 0.75 .062**

Note. 5-point scale ranging from 1 (strongly disagree) to 5 (strongly agree)

** Coefficients significant at p < .01

Page 12: Predicting Entrepreneurial Intention Presentation

RESULTS: PERCEIVED BEHAVIORAL

CONTROLVariable Factors ItemsReliability

CoefficientsMean SD

Correlation with entrepreneurial

intention

Entrepreneurial Self-Efficacy

Developing new products

4 .75 3.15 0.59 .205**

Initiating investor relationships

6 .75 3.39 0.53 .189**

Developing critical human resources

4 .68 3.15 0.65 .132**

Building an innovative environment

3 .66 3.38 0.60 .191**

Defining core porpose

4 .58 3.32 0.73 .177**

Coping with unexpected changes

2 .40 3.01 0.65 .179**

Note. 5-point scale ranging from 1 (strongly disagree) to 5 (strongly agree)

** Coefficients significant at p < .01

Page 13: Predicting Entrepreneurial Intention Presentation

Attitudefuntions

CCe6

INe5

ESe4

Specificattitudes

INIe11

,39CRe10

,40ILe9

ITe8

LPe7

GeneralattitudeAPe2

AGe1

ATTITUDE

,88

,73

,87

res1

res2

res3

EAe16

AAe15

CPe14

NFe13

SUBJECTIVENORM

,66

,27

,16

,63

,59

PERCEIVEDBEHAVIORAL

CONTROL

TEe22

LCe21

EIe20

RH

IRe18

e19

DPe17

,74

,49

,62

,61

,58

INTENTION

IA

e24

IE

e23

res5

,78

,15

,24

,23

,46

,21

,32

,52

,65

,50

,13

,55

,67

,60

,17

,19

IDe3 ,80

-,27

,30

-,17

,36

,16

STRUCTURAL EQUATION MODELING

THEORY OF PLANNED BEHAVIOR (TPB)

.27

Figure 2. Intention model from Theory of Planned Behavior

Model Fit

Indexes: RMR (.03), GFI (.93), AGFI (.91) and

RMSEA (.04)

Standardized Regression Weights

Attitude: .32 ***

Subjective Norm: .15 *

Perceived Behavioral Control: .21 **

Explained Variance by the Model

27% of entrepreneurial intention variance

* p<.05 ** p <.01 *** p < .001

Page 14: Predicting Entrepreneurial Intention Presentation

AttitudeFuntions

CCe6

INe5

ESe4

SpecificAttitude

INIe11

,39CRe10

,40ILe9

ITe8

LPe7

GeneralAttitudeAPe2

AGe1

ATTITUDE

,87

,75

,88

res1

res2

res3

EAe16

AAe15

CPe14

NFe13

SUBJECTIVENORM

,16

,63

,59

INTENTION

IA

e24

IE

e23

res5

,96,21

,24

,33

,42

,12

,57

,58

,15

,18

IDe3

,51

,28

,79

,66

,66

-,27-,17

,16

,36

THEORY OF REASONED ACTION (TRA) Figure 3. Intention model from Theory of Reasoned Action

Modelo Fit

Indexes: RMR (.04), GFI (.95), AGFI (.93)

and RMSEA (.04)

Standardized Regression Weights Attitudes: .33 ***

Subjective Norm: .21 **

Explained Variance by the Model

18% of entrepreneurial intention variance

.18

STRUCTURAL EQUATION MODELING

* p<.05 ** p <.01 *** p < .001

Page 15: Predicting Entrepreneurial Intention Presentation

RESULTS: MULTIPLE-GROUP ANALYSIS

DIFFERENCES BETWEEN MEN AND WOMEN

Model Fit for Men Group

Indexes: RMR (.04), GFI (.89), AGFI (.87) y RMSEA (.05)

Standardized Regression Weights Attitudes: .32 ***

Subjective Norm: .18 *

Perceived Behavioral Control: .20 **

Explained Variance by the Model

31% of entrepreneurial intention variance

Model Fit for Women Group

Indexes : RMR (.03), GFI (.95), AGFI (.94) y RMSEA (.04)

Standardized Regression Weights

Attitudes: .34 ***

Subjective Norm: .18 **

Perceived Behavioral Control: .14 *

Explained Variance by the Model

24% of entrepreneurial intention variance

* p<.05 ** p <.01 *** p < .001

Page 16: Predicting Entrepreneurial Intention Presentation

CONCLUSIONS

 

How is the entrepreneurial intention of Spanish students? How is the entrepreneurial intention of Spanish students?

• The participating Spanish students have low entrepreneurial intention in general. Their favorite occupational choice is to work in a private company.

• The model proposed by the TPB explains 27% of the variance in the entrepreneurial intention.

• The alternative model proposed by the TRA explains only 18% of the variance in the entrepreneurial intention.

• The TPB model was validated in groups of men and women. However, the explained variance of entrepreneurial intention was bigger in men group.

• Attitude is the most influential component with the biggest impact on the entrepreneurial intention in every group (women and men)

Is the Theory of Planned Behavior able to explain entrepreneurial Is the Theory of Planned Behavior able to explain entrepreneurial intention? intention?

What is the best predictor of entrepreneurial intention?What is the best predictor of entrepreneurial intention?

Page 17: Predicting Entrepreneurial Intention Presentation

CONCLUSIONSHow is the subjective norm towards entrepreneurial behavior?How is the subjective norm towards entrepreneurial behavior?

• This variable shows the lowest impact on entrepreneurial intention

• There is a low social legitimacy of entrepreneurship in Spain.

• Social support has a positive effect on the entrepreneurial intention. Especially, when this support comes from the family.

• Entrepreneurship Support from the Educational Center has a positive effect as well. However, the participating students indicate that there is not enough encouragement for the entrepreneurship as an occupational choice in their educational centers.

• Entrepreneurial Self-Efficacy is an important predictor of entrepreneurial intention.

• If this component is eliminated from the model then the entrepreneurial intention explained variance goes down from 27% to 18%.

• This variable has a bigger impact on entrepreneurial intention in men group than in women group.

How is the Perceived Behavioral Control?How is the Perceived Behavioral Control?

Page 18: Predicting Entrepreneurial Intention Presentation

Thank you !

¡ Muchas gracias !

Juan A. Moriano

E-mail: [email protected]