Self efficacy, perceived behavioral control and entrepreneurial intention among polish students in the context of industry 4 0 assessing the effect of education level

SELF EFFICACY, PERCEIVED BEHAVIORAL CONTROL AND ENTREPRENEURIAL INTENTION AMONG POLISH STUDENTS IN THE CONTEXT OF INDUSTRY 4 0 ASSESSING THE EFFECT OF EDUCATION LEVEL Duong Cong Doanh, MBA MSc Assoc P[.]

SELF-EFFICACY, PERCEIVED BEHAVIORAL CONTROL AND ENTREPRENEURIAL INTENTION AMONG POLISH STUDENTS

IN THE CONTEXT OF INDUSTRY 4.0: ASSESSING THE EFFECT

OF EDUCATION LEVEL

Duong Cong Doanh, MBA MSc Assoc Prof Dr Nguyen Ngoc Huyen National Economics University

Abstract

This study aims to examine the effects of educational level on self-efficacy, perceived behavioral control and entrepreneurial intention among Polish students in the context

of industry 4.0 By collecting data from 553 Polish students at universities and colleges

in Poland, author would employ the quantitative approach such as certain descriptive statistics, explorative factor analysis, correlation coefficient analysis, ANOVA test and multiple linear regressions to analyze the relationship between educational level, self-efficacy, perceived behavioral control and entrepreneurial intention In addition, Chi-square and Cramer’s V tests are implemented to indicate the difference of educational level in entrepreneurial intention The research results show that there is a positive relationship between educational level and entrepreneurial intention, while self-efficacy and perceived behavioral control also have positive effects on entrepreneurial intention Moreover, Chi-Square and Cramer’s V test report that there is a strong evidence of educational level in entrepreneurial intention but no differences in self-efficacy and entrepreneurial intention

Keywords: self-efficacy, perceived behavioral control, educational level, entrepreneurial

intention, Polish students

1 Introduction

The reasons why students do or do not intent to run their own business have interested many researchers in entrepreneurship literature (Iakowleva et al., 2014; Moriano et al., 2012; Krueguer et al., 1994; Kolvereid, 1996) Entrepreneurs play a crucial role in developing the national economy, well-being of a society (Iakowleva et al., 2014),

innovation and employment (Kelley et al., 2011) Guerrero et al (2008) state that entrepreneurship is seen as an innovative and creative process, which play the potential role in creating added and new value to products/services, increasing productivity, creating new job opportunities, revitalizing and diversifying markets, improving social welfare, and developing the national economy Historically, the establishment of new market, the relationship with profit orientation and capital investment (Schumpeter, 1975) led to the beliefs of economics regarding the responsibility of entrepreneurship for economic growth (Code, 1965; Weber, 1930)

Market economy in Poland was established only after 1989 As a consequence of the imposition of the Communism ideology after World War II, with the control of economy and social life modeled upon the Soviet Union, the entrepreneurship issue was not a concern Poland and many other Central European countries functioned as a

system of centrally planned economies where the importance of profit-oriented sector was minimized as much as possible As a consequence of political and economic principles, private and profit-seeking entities were almost entirely rejected Entrepreneurship was not as common in the centrally planned system as it was the case

in other market economies in Europe As mentioned in UNCTAD 2017 World Investment Report, despite FDI, Poland is among the most attractive nations in Europe FDI inflows into Poland showed a reduction of USD 2.1 billion from USD 13.5 billion

in 2015 to only USD 11.4 billion in 2016 This trend reflects the global economic crisis and the economic slowdown effectuated by the Eurozone crisis of 2012-2013 According to World Bank (2017), GDP growth reached nearly 4.0% in 2017, compared

to only 2.7% in 2016 However, as a result of the impact of lower economic activity in Europe and labor shortages on the domestic market, the economy in Poland is predicted

to be slowing down in 2018 In addition, Industry 4.0 is seen as a chance for Polish traditional industries Indeed, the results of survey made by Boston consulting Group reported that there was high level of consciousness among Polish managers of big

companies in terms of chances provided by Industry 4.0 solutions (Figure 1) However,

the government should encourage them in investing in such solutions focusing on cost-benefits analyses Unsolved problem in Poland is the approach and readiness to implement Industry 4.0 solutions in smaller companies Objectives of Polish managers are similar to government’s targets in connecting with implementation of Industry 4.0 solutions Coordination impact will foster transformation process and facilitate cooperation between private and public sector

Figuge 1 The results of survey made by Boston consulting Group, Poland

Source: Survey by Boston consulting Group

According to Global Entrepreneurship Monitor (GEM) in Poland (2017), there is an increase in the percentage of individuals finding opportunities to start up their own business in 2016 Noticeably, it is the first time in GEM research, and Poland reached a result better than the average level in EU However, the fear of failure in business was still seen as the largest obstacle in developing entrepreneurship in Poland since 48% of the Polish citizens recognize the business opportunities in the environment and not decide to start up their own business, in comparison with only 41% among the EU residents

Even though the concept of entrepreneurship has become more universal in the world, almost all entrepreneurial intention studies conducted in the developed countries, in which the entrepreneurial ecosystem and the market economy has been developed

82%

18%

Are you going to invest in Industry 4.0 solutions?

Yes No

64%

25%

11%

When do you plan these investments?

In next two years In next five years not defined yet

There is lack of studies of entrepreneurship performed in the developing middle European countries, such as Poland, especially in the investigation of the effects of entrepreneurial intention studies among the students Thus, the loophole in this research needs to be fulfilled The principal objective of this study is to examine the impact of the education level on entrepreneurial self-efficacy, perceived behavioral control and entrepreneurial intention This study also provides a useful insight of young entrepreneurs of policy makers, education managements and governments with the goal

of fostering students’ entrepreneurship, developing entrepreneurial ecosystem and enhancing the business environment In addition, the author also hopes that this study will bring an interesting insight to researchers and academic staffs

This study is organized in the following manner: Firstly, the theoretical background related to entrepreneurship, entrepreneurial intention, self-efficacy and perceived behavioral control and hypotheses will be introduced Secondly, the research method, research model and ways to collect data will be described Thirdly, the author will discuss the research results Finally, conclusions and recommendations for further researchers will be performed

2 Literature review

2.1 Entrepreneurship and Entrepreneur

There are many definitions for entrepreneurship developed over the few recent decades

Schumpeter (1975)considered that entrepreneurs are people who create new products or services in new or existing market and entrepreneurship becomes one of the most important factors in countries’ economic growth (Schumpeter, 1975; De Bruin et al.,

2006, p 686) “The environment itself creates entrepreneurship”(Bernat et al., 2016, p

271), the reason is that operating organizations have the knack for reacting quickly to unanticipated changes, but also “to adapt to unpredicted outcomes of the predicted changes” (Timmons, 1990) Kirzner (1985) defined that an entrepreneur is a person who might optimize information in such a way that we are able to discover the new and improved business opportunities Talpas (2014, p.198) consider entrepreneurship as a process that can be recognized throughout business activities by showing effective leadership within uncertain market, risks and competitive conditions, while Zimmer and Scarborough (1996, p.19) claimed that entrepreneurs can also be known as owners who, with skillful manner, are able to associate various factors of production, transforming a smaller economic resources into a bigger platform effectively and rising profits Also, Entrepreneurship is the process of creating and building new venture and new business organization (Shane, Venkataraman, 2000), that not only provides goods and services, creates job opportunities but also contribute to the development of economy and the national income Linda et al (2017) argued that “it is the process of designing, launching and running a new business”, and it also tend to some topics such as policy,

government programs, entrepreneurial training, funds, and many others that does not only promote the development of starting a new business but it also supports entrepreneurs in their business activities In addition, OECD (2006) stresses that entrepreneurship is defined as a process, which entrepreneurs establish and develop

enterprises to supply new products and services, or create additional value to products and services

2.2.Entrepreneurial intention

Krueger & Brazeal (1994) has defined entrepreneurial intention as the intent to set up a new business, or the intent to be self-employed (Douglas & Shepherd, 1997) or the intent to own a business (Crant, 1996) There are many reasons such as personal circumstances, social and political issues and business environment, which might become either big obstacles or motivated factors to transform this intent becoming a reality Thus, entrepreneurial intention is perceived as an essential and fundamental condition to be a nascent entrepreneur Whereas entrepreneurship is determined as the emergent process of an organization (Gartner et al., 1992), an individual’s intention to pursue an entrepreneurial career is crucial to this process (Lee et al., 2011, p.126)

Moreover, entrepreneurial intention is considered the first step in a series of action to found an organization (Bird, 1988), yet Fishbein and Ajzen (1975) argued that intentions toward a behavior can be seen as important indicators of that behavior In other words, intentions are still seen as the best predictor of individual behavior

(Krueger, 2008) According to Ajzen (1991), who introduced Theory of Planned Behavior, intentions are determined by social/subjective norms and perceived behavioral control Social norms are considered individual’s perception of his or her behavior that is consistent with significant thoughts of others, while perceived behavior control is the range of the target behavior within the ability of a decision maker

(Esfandiar et al., 2017) Do and Dadvari (2016) also defined entrepreneurial intention as

an attentive state of mind that reflects personal experience, awareness and interest toward planned entrepreneurial activity In the context of Poland, the effects of educational level on entrepreneurial intention should be investigated

H1 Entrepreneurial intention is positively affected by educational level

2.3 Self-efficacy

Cognitive issues reflect individual’s knowledge and skills related to performing and operating a new venture (Baughn et al., 2006) A person’ perception of his or her capabilities of carrying out a specific action is a necessary component of motivation Desirability of creating a new business can be involved in Bandura (1986) the construction of self-efficacy Thus, self-efficacy is an individual’s judgment of his or her capability of executing a targeted behavior (Ajzen, 1987) and entrepreneurial intention might also be affected by self-efficacy factors (Bandura, 1986; Chen et al.,

1998) Self-efficacy becomes a useful concept to explain human behavior and it also plays a considerable role in identifying the choice, effort level, and perseverance of individuals (Chen et al., 2004) Bandura (1997) also considered that a person who has high self-efficacy for a particular task is likely to engage and then persevere in that task than an individual who shows low self-efficacy Prior researches have seen self-efficacy

as a key predictor to identify entrepreneurial intentions (Lee et al., 2011), self-efficacy either has direct effects on entrepreneurial intention or affect indirectly through

perceived feasibility (Krueger, 1993; Krueger et al., 2000) In this study, the relationship between educational level and efficacy, the degree to which self-efficacy influences directly on entrepreneurial intention in the context of transitional economy in Poland will be considered

H2 Entrepreneurial intention is positively affected by self-efficacy

H3 Self-efficacy is positively affected by educational level

H4 Perceived behavioral control is positively affected by self-efficacy

2.4 Perceived behavioral control

Perceived behavioral control refers to the extent to which a personal control belief in terms of the activities being studied (Solesvik et al., 2012), while Liñán & Chen (2006, p.4)has defined perceived behavioral control as “the perception of easiness or difficulty

in the fulfillment of the behavior of interest” This construct consists of not only being

able to have the essential skills to run a business and achieve success (Miranda et al.,

2017), but also the perception about controllability of the behavior (Liñán & Chen, 2009) Entrepreneurship research emphasizes the importance of perceived behavioral control as a mechanism for overcoming awareness of the greater technological, financial, legal uncertainties which are often related to new ventures (Obschonka et al., 2010; Silveira-Perez et al., 2016) Schaegel & Koenig (2014) consider that controllability perception has positive effect on the intention to become a founder

Ajzen (1991) has divided perceived behavioral control into two components, which include the availability of resources required to conduct the behavior and the focal point

of individual’s self-confidence in the capacities to perform the behavior In addition,

Ajzen & Code (2008) argue that perceived behavioral control is identified by controlled beliefs involving in the availability of factors (market opportunities, resources, role models, social capitals) which might facilitate or impede performance Thus, the hypothesis is proposed to examine the influence of educational level on perceived behavioral control and the relationship between perceived behavioral control and entrepreneurial intention as well in the context of transitional economy in Poland

H5 Perceived behavioral control is positively affected by educational level

H6 Entrepreneurial intention is positively affected by perceived behavioral control

3 Methodology

This study mainly focuses on investigating the effect of educational level on entrepreneurial self-efficacy, perceived behavioral control and entrepreneurial intention among Polish students in the context of Industry 4.0 In terms of research techniques,

quantitative method such as certain descriptive statistics, KMO and Bartlett test, correlational coefficient analysis and multiple regression throughout SPSS 20.0 in order

to show the relationship between educational level, self-efficacy, perceived behavioral control and entrepreneurial intention Moreover, the Chi-Square and Cramer’s V Tests are also used to illustrate the educational level difference in self-efficacy, perceived behavioral control and entrepreneurial intention

Even though more than 1000 questionnaires were distributed among the students at

universities in Poland, only 553 students (N=553) have fulfilled completely The

surveys are divided into 2 sections, which is based on the purpose of the study, theoretical background and hypotheses In the first section, demographic questions are designed to obtain respondents’ information such as gender, age group, educational level and the willingness level to take risks In the second section, the questions are designed to allow respondents providing their viewpoint regarding self-efficacy, perceived behavioral control and entrepreneurial intention, which based on the previous studies (Baughn et al., 2006; DeNoble et al., 1999; Liñán and Chen, 2009; Maresch et

al., 2015; Liñán & Chen, 2009; Adekiya & Ibrahim, 2016) The questionnaires are

based on the Liker scale with self-efficacy and perceived behavioral control (0= Strongly disagree, 1=Disagree, 2= Slightly disagree, 3= Slightly agree, 4= Agree, 5= Strongly agree) and entrepreneurial intention (1= Strongly disagree, 2=Disagree, 3= Agree, 4= Strongly agree).

Figure 2 Research framework

0.055 0.103**

0.725**

0.199**

0.063 0.133**

4 Results

4.1 Demographic profile

Demographic information of respondents is presented in table 1.

Table 1 Descriptive Statistics of Sample Demographics

4 Type of current

professional

(working) activities

Studying and working for a company 74 13.4 Studying and running own business 9 1.6 Studying and looking for a job 360 65.1 Note: N=553; F: Frequency; %: Percent

Source: Authors’ elaborations based on research study

Educational level

Self-efficacy

Perceived Behavioral Control

Entrepreneurial intention

The results of descriptive statistics of demographic layouts indicates the major proportion of respondents aged from 20 to 24 years old, compared to only 16.6% and 7.4% respondents who aged from 18 to 19 years old, and over 24 years old respectively However, the percentage of female respondents reaches 69.4%, which is twofold higher than that of male respondents (just 30.6%) In addition, the figure for university/college students accounts for 71.4%, followed 24.8% master students and 3.8% high school students In terms of type of current professional (working) activities, 65.1% students consider that they are studying and looking for a job, 19.9% students are only studying, 13.4% students are studying and working for a company, and only 1.6% of them are studying and running a business

Figure 3 Respondents’ willingness to take the risks

Note: N= 553, 1= very low, 2= low, 3= neutral, 4= high and 5= very high

Source: Authors’ elaborations based on research study

The author also examines the willingness level to take risks among Polish students,

which is represented in figure 2 Overall, only 27.3% students believe that their

willingness level to take risks are high and very high (20.6% at high level, and 6.7 % at very high) respectively However, the considerable percentage of respondents argues that their willingness levels to take risks are 44.70% neutral and 28.0 % at low and very low level

4.2 Reliability and explorative factor analysis for variables

Table 2 Reliability test and descriptive statistics for independent variables

Deviation

Cronbach's Alpha

Self-efficacy (SE)(Baughn et al., 2006; DeNoble et al.,

1999)

0.809

SE1 I can identify potential capital sources for the venture 3.1212 1.71464 0.805

SE2 I can develop relationship with people who connect

to sources of funds

2.75016 1.48895 0.766 SE3 I can react quickly to unexpected changes 2.7595 1.43141 0.776

SE4 I know how to legally protect a new venture 3.7844 1.31399 0.796

SE5 I can identify new areas for potential growth in the 3.0814 1.32925 0.791

6.70%

20.60%

44.70% 19.00%

9.00%

Very high

High Neutral

Low Very low