Doctoral dissertation overview: Toward an attitude approach to predict entrepreneurial intention and test the role of entrepreneurship education and sources of capital - An empirical

Doctoral dissertation overview: Toward an attitude approach to predict entrepreneurial intention and test the role of entrepreneurship education and sources of capital - An empirical research in Vietnam

MINISTER OF EDUCATION UNIVERSITY OF ECONOMICS HCM CITY

-

TRAN QUANG LONG DOCTORAL DISSERTATION OVERVIEW

“Toward an attitude approach to predict

Entrepreneurial Intention and test the role of Entrepreneurship education and Sources of Capital:

an empirical research in Vietnam”

Major: Business Administration

Code: 9340101

Ho Chi Minh City - 2018

Introduction

Entrepreneurship has been around since the 18th century and has developed widely throughout the business world Schumpeter (1934) and Peter Drucker have an large contribution to the entrepreneurship definition Despite of some difference aspests, both Schumpeter and Drucker believe that entrepreneurship is significantly important for the overall economic health and point out some practical tools and aspects of entrepreneurship so that one can become a successful entrepreneur

In the past couple of years, entrepreneurship has gained a lot more attraction Kelley, Singer and Herrington (2016) report that entrepreneurship is thought to be a good career choice by more than 73% of Vietnamese people As its economy emerges, young people in Vietnam have seen an increase in perceived entrepreneurial opportunities from 2013 to 2015 (36.8% to 56.8% respectively) However, their entrepreneurial intention is significantly lower with only about 22% Despite the importance of entrepreneurship to economic growth in Vietnam, there have not been many studies conducted on this topic Thus, the purpose of this study is to examine the impacts of Entrepreneurial Attitude Orientations (EAO) on Entrepreneurial Intention (EI) of Vietnamese adults It also investigates the moderating role of sources of capital on the relationship between EAO and EI This study will hopefully attract scholars and practitioners’ attention because it expands the body of knowledge of entrepreneurship field as well as provides practical implications for the country’s lawmakers, financial institution managers, and especially Vietnamese entrepreneurial mindsets

Literature Review

Approaches to predict Entrepreneurship

Many authors have tried different approaches to predict entrepreneurship but there are two most common methods that emerge, which are personality traits and demographic information

Personality Traits Approach

There are certain authors who support the belief that personality traits are important factors to determine whether a person will become an entrepreneur such as kindness, need for achievement, locus of control, risk taking, innovation, problem-solving style, tolerance for ambiguity and values (Brockhaus, 1975; Brockhaus & Horwitz, 1986; Collins & Moore, 1970; Hornaday & Aboud, 1971; Palmer, 1971; Shapero, 1975; Swayne & Tucker, 1973) Despite having some success, this approach reveals some problems in conception and practice (Kilby, 1971; Klinger, 1966) It has been criticized by

a number of researchers as unsatisfactory and questionable in explaining entrepreneurial conduct and performance (Gartner, 1988; Aldrich & Zimmer, 1986, Low & Macmillan, 1988) Robinson et al (1991) argue that the methodologies used in those personality trait studies were not built specifically for measuring entrepreneurship They find inconsistencies when many different scales were used to measure a certain concept and believe that research efficacy would

be reduced when general measurements like personal traits are applied to a specific and dynamic field

Demographic Approach

Using demographic variables to study entrepreneurial intentions is very popular throughout several decades Factors such as birth,

gender, role models, age, education level, family background and work habits are frequently used to develop a basic profile of entrepreneurs (Gaddam, 2008) Kristiansen and Indarti (2004) find several studies to support the argument that demographic variables influence entrepreneurial goals However, Robinson et al (1991) point out that this approach presents arguable problems and this approach does not help to predict whether a person would be a successful entrepreneur due to conflicting results (Bowen & Hisrich, 1986; Deivasenapathy, 1986; Hisrich, 1990) In addition, Garner (1985) convinces that an average personal profile of entrepreneurs cannot be built because entrepreneurs create an exceedingly heterogeneous group of people

Toward a new approach: the attitude approach

Since both approaches receive criticism for their methodological and conceptual limitations (Ajzen 1991; Gartner 1989; Low & MacMillan, 1988; Santos & Liñán 2007; Shapero & Sokol 1982), a better approach deems necessary Krueger, Reilly, and Carsrud (2000) argue that the decision to become an entrepreneur may be considered

as voluntary and conscious so understanding about how that decision takes place and what factors effect an individual’s mind is very important From this sense, the entrepreneurial intention is perceived

as a decisive antecedent of entrepreneurial behaviours (Fayolle & DeGeorge, 2006; Kolvereid, 1996) Ajzen (1991) states that “the intention of carrying out a given behaviour will depend on the person’s attitudes towards that behaviour.” The more favourable the attitudes are, the more plausible the intentions are Hence, an

“attitude approach” would be more suitable than personal traits or

demographic factors (Krueger et al., 2000; Robinson et al.,1991) Robinson et al (1991) develop the Entrepreneurial Attitude Orientation (EAO) scale which relies on attitude theory and is specifically designed to predict entrepreneurship

Entrepreneurial Intentions

Entrepreneurial intentions (EI) is defined as “an individual’s desire to create their own business” (Crant, 1996) or “to start a business” (Krueger et al., 2000) Thompson (2009) defines EI as

“self-acknowledged conviction by a person that they intend to set up

a new business venture and consciously plan to do so at some point

in the future” Intentions have been used to describe self- prediction

to engage in behaviour; “the stronger the intention is, the more probable the behaviour is” (Ajzen, 1991; Ajzen & Fishbein, 1980) Social-psychological studies assume that intention is the sole predictor of actual behaviour (Bagozzi, Baumgartner, & Yi, 1989; Armitage & Conner, 2001) Despite of that, some scholars suspect whether intentions truly predict actual entrepreneurial behaviour (Douglas & Shepherd, 2002) However, multiple studies still find entrepreneurial intentions as one of the crucial antecedents of actual entrepreneurial behaviours and actions (Bird, 1988; Fayolle & DeGeorge, 2006; Krueger & Carsrud, 1993; Kolvereid, 1996; Lee, Wong, Foo, & Leung, 2011; Tkachev & Kolvereid, 1999)

Entrepreneurial Attitude Orientation (EAO)

Attitude is defined as the predisposition to respond in a generally favourable or unfavourable manner (Ajzen, 2005; Rosenberg & Hovland, 1960; Shaver, 1987) Although there are several attitude approaches such as TPB (Ajzen, 1991), EEM (Shapero & Sokol,

1982), Robinson et al (1991) develop the EAO scale which contains four subscales Each subscale consists of three attitude components including Affection, Cognition, and Conation (also referred to as the behavioural component) According to Robinson et al (1991), “the larger the value of each subscale is, the higher the ability to predict entrepreneurial individual is.” Huefner, Hunt, and Robinson (1996) affirm that the EAO successfully distinguished entrepreneurs and non- entrepreneurs in several studies Robinson et al (1991) applied the tripartite model, included three types of reaction to everything: affect (AFF_consists of positive or negative feelings toward the object), cognition (COG_ consists of the beliefs and thoughts an individual has about an attitude object), and conation or behavioral (BEH_ consists of behavioral intentions and predispositions to behave in a given way toward the object) Using the attitude components in the EAO research would enhance the content validity

of each subscale (Huefner et al., 1996)

Figure 1 Entrepreneurial Attitude Orientation (EAO)

Self-esteem

The concept of self-esteem has been variously defined in the literature Crandall (1973) defines self-esteem as “linking and respecting of oneself which has some realistic basic” (p.45) Coopersmith (1981) believes that self-esteem is “an impression of approval or disapproval, indicating the extent to which a person’s belief for himself or herself is competent, successful, significant and worthy” (Coopersmith, 1981) While many authors believe that self-esteem does not affect entrepreneurial behaviour (Moradi and Razaviyayn, 2013; Moradi, 2010), there are many studies confirm self-esteem is the most important characteristic of entrepreneurs (Pyszczynski, Solomon, Greenberg, & Arndt, 2004) Cunningham et al., 2005; Ji, Lapan, & Tate, 2004; Johnson, Stone, & Phillips, 2008)

In other words, there is still unconsistent result bout self-esteem in entrepreneurship With that being said, the following hypothesis is proposed:

H1: Self_esteem (H1.1: SE_AFF; H1.2: SE_COG; H1.3: SE_BEH) positively impacts entrepreneurial intention

Innovation

Innovation is defined as “a process that involves the generation, adoption, implementation and incorporation of new ideas, or practices within an organization” (Van de Ven et al., 1989) According to OECD and European Commission (1997), innovation means completing products and services by developing them technologically (as cited in Gündoğdu, 2012) Damanpour and Gopalakrishnan (2001, p.47) define innovation as “the adoption of an idea or behaviour pertaining to a product, service, device, system, policy, or program that is new to the adopting organization.” Innovation has traditionally been linked to entrepreneurship (Schumpeter, 1934) Many researchers have emphasized the relevance of innovation for businesses (e.g., Hsueh & Tu, 2004; Freel, & Robson, 2004) In Gündoğdu’s opinion, under the environment of advanced information and communication technology, with the trend of globalization, entrepreneurs and enterprises were forced to respond to customers and adapt to the environment more quickly Innovation was an essential element for entrepreneurs to stay in business (Gündoğdu, 2012) With that being said, the following hypothesis is proposed:

H2: Innovation (H2.1: INN_AFF; H2.2: INN_COG; H2.3: INN_BEH) positive impacts entrepreneurial intention

Personal control

According to Seeman (2008), “Personal control beliefs, also referred to as locus of control and personal mastery beliefs, reflects individuals' beliefs regarding the extent to which they are able to

control or influence outcomes.” According to Rotter’s model, the locus of control of an individual includes internal and external control (Rotter, 1966) Many researchers believe that internal controls are typically associated with entrepreneurial characteristics (e.g Brockhaus, 1982; Cromie & O'Donoghue, 1991; Kaufman & Welsh, 1995; NiitKangas et al., 1994; Perry, 1990; Shaver &Scott, 1991) However, Schjoedt (2008) finds inconsistent and conflicting results when it comes to research on locus of control and entrepreneurship (e.g., Cooper & Gimeno- Gascon, 1992) With that being said, the following hypothesis is proposed:

H3: Personal Control (H3.1:PC_AFF; H3.2: PC_COG; H3.3: PC_BEH) positive impacts entrepreneurial intention

is defined as the “desire to do well and to attain an inner feeling of personal accomplishment” (McClelland, Atkinson, Clark, & Lowell, 1953) Lee and Chen (2012) find that achievement motivation has

a significant influence on entrepreneurial behaviour “once the motivation of running their own business overwhelms, they would choose to pursuit their desire by running their own business” (Lee and Chen, 2012) Many authors agreed with that there is a positive correlation between achievement motivation and entrepreneurship (Jayeoba, Sholest, and Lawal, 2013; Ahmed, 1985; Garland et

al.,2003; Jayeoba et al., 2013) With that being said, the following hypothesis is proposed:

H4: Achievements (H4.1: ACH_AFF, H4.2: ACH_COG; H4.3: ACH_BEH) positive impacts entrepreneurial intention

Entrepreneurship education

Entrepreneurship education consists of “any pedagogical [program] or process of education for entrepreneurial attitudes and skills” (Fayolle, Gailly, & Lassas-Clerc, 2006b, p 702) It has a relatively long history and has developed into a widespread phenomenon (Katz, 2003; Kuratko, 2005) However, as we found in literature researchers usually focus on different types of entrepreneurship education which targeted toward particular stages

of development (Bridge, O’Neill, & Cromie, 1998; Gorman, Hanlon,

& King, 1997; McMullan & Long, 1987) or specific audiences (Jamieson, 1984; Liñán, 2004)

Method of Entrepreneurship education: Several different pedagogical designs for entrepreneurship education have been used ranging from business plans to guest speaker or venture creation (cf Kuratko, 2005) There are still arguments from author for the most positive method

H5: Method of entrepreneurship education has a difference impact

to (H5.1) self_esteem, (H5.2) innovation, (H5.3) personal control, (H5.4) achievement and (H5.5) entrepreneurial intention

Duration of Entrepreneurship Education Schools usually offer

entrepreneurship education in a various duration from a workshop to

a semester The main difference is the level of absorpting for student between class meetings As such, we argue that when

entrepreneurship education is taught in difference durarion would make a difference impact in entrepreneurial intention

H6: duration of entrepreneurship education has a difference impact

to (H6.1) self_esteem, (H6.2) innovation, (H6.3) personal control, (H6.4) achievement and (H6.5) entrepreneurial intention

Level of student’s education Christopher Schlaegel and Michael

Koenig (2013) showed in a meta-analysic that most of Entrepreneurship education research were taken placed in universities ( for example : Zhang et al, 2013 ; Wurthmann, K (2013), Wagner, M (2011), Santos & Liñán, 2010) While there is little studies in other level of education such as Diploma or Master,

we believe that by comparing the impact of students level to entreprenuerial intention would be potential

H7 : level of student’s education has a difference impact to (H7.1) self_esteem, (H7.2) innovation, (H7.3) personal control, (H7.4) achievement and (H7.5) entrepreneurial intention

Sources of Capital

Sources of capital are among factors that are believed to be very critical in increasing the rate and nurturing of new venture developments (Pennings, 1982) Higher income and wealth levels can enhance entrepreneurial processes thanks to the availability of higher capital expenditure (Bergmann, 2005), higher demand for products (Bosma, van Stel, & Suddle 2008; Reynolds, Storey, & Westhead, 1994), and a greater supply of resources for business capitalization and lower borrowing costs (Bates, 1995; Kangasharju, 2000; Stam, 2010) People who have more savings and assets may have less risk of insecure self- employment (Ashcroft, Love, & Malloy, 1991; Kangasharju, 2000) and these savings and assets can

be used as important collateral for bank loans (Black, de Meza, & Jeffreys, 1996)

From the financial perspective, Myers (1984) distinguished sources

of capital as the internal and external finance Lately, Kovačić (2011) argued to have three kinds of sources capital include: saving, loan and investment

Bank loan

Åstebroa and Bernhardt (2003) conclude that bank loans are highly and positively correlated with start-up sustainability Brezak Brkan (2010) states that private investors play a very popular role in providing financial resources for entrepreneurs by providing capitals

to businesses that have potentials for success In their study in UK, Sharpe, Cosham, Connell and Parnell (2009) confirm the important role of business angels to high-tech start-ups from the very early beginning

Saving:

When planning for a start-up, founders first rely on internal financing sources such as savings, funds from friends and family, and then external financing sources such as borrowing bank loans and business angels (Krishnan, 2010) It reveals that entrepreneurs tend to believe

in their decision and their families and fools are willing to support them

Investment

Rakar (2006) mentions the importance of venture capital investments

as a shared ownership of a start-up Entrepreneurs may seek capital investments from individuals, companies or funds in exchange for ownership of the company as “shareholders.” Samila and Sorenson

(2011) agree that venture capital effects greatly on regional rates of entrepreneurship in the U.S Popov and Roosenboom (2013) find that venture capital investment positively impacts the rate of new businesses in several countries in Europe

Studies usually focus on clarifying kinds of source of capital or stages There is an absent of research on the role of sources of capital With that being said, the following hypothesis is proposed:

H8: Sources of capital moderates the relationship between (H8.1) Self_esteem; (H8.2) Innovation; (H8.3) Personal control; (H8.4) Achievements and entrepreneurial intention

Figure 2 shows the initial research model

Entrepren_ eurial intention (EI)

H8.1 H8.2 H8.3 H8.4