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The empirical study of the association

between entrepreneurial knowledge and


entrepreneurial intention: Investigating the
role of personal attitude.

Tasawur Hussain
NDU-LMS/M.P-14/S-132
Department of Leadership and Management Sciences
Faculty of Contemporary Studies
National Defence University
Islamabad

Outline of Presentation :

Introduction
Literature Review
Theoretical Framework and Hypothesis
Methodology
Results and Discussions
Recommendations and Conclusion

Outline of Presentation :

Introduction
Literature Review
Theoretical Framework and Hypothesis
Methodology
Results and Discussions
Recommendations and Conclusion

Introduction

Defination of Entrepreneurship
Any attempt at new business or new venture creation, such as selfemployment, a new business organization, or the expansion of an
existing business, by an individual, a team of individuals, or an
established business (Reynolds et al.,1999).

Entrepreneurship, The key in economic development and growth


through innovation (Huggins & Thompson, 2015; Carree & Thurik,
2003; Drucker, 1984) and job creation (Atef & Al- Balushi, 2014;
Carree & Thurik, 2003).

Entrepreneurship is the pursuit of opportunity without regard


to resources currently controlled.
-Howard Stevenson (1988)

Introduction to the topic

Entrepreneurship is the outcome of different factors internal to the


individual and external from the general environment. These factors
force an individual to take certain actions to be an entrepreneur
based on situation and time.
Here an individuals knowledge of entrepreneurship along with
entrepreneurial attitude shapes Entrepreneurial intention.
Entrepreneurial intention is the main focus of this study.

Topic:
The empirical study of the association between entrepreneurial
knowledge and entrepreneurial intention: Investigating the role of
personal attitude.

Background of the
study

Richard Cantillon in 1732 used entrepreneurship to define the


willingness of an individual to carry out arbitrage with a higher
financial risk of new business formation (Minniti & Lvesque, 2008).
The term Entrepreneur was coined by Jean Baptiste Say in 1836
and defined the terms as the person (adventurer/Undertaker) who
identifies the mismanagement of resources and capital and get
control of them to make them more profitable through improved
productivity and better yields (Say, 1836).

Theories and Models in the field:

Self-Efficacy and Social Learning Theory (Bandura, 1986, 1997)


Theory of Planed Behaviour (Ajzen, 1991)
Self-Perception Theory (Daryl Bem, 1973)
Theory of Reasoned Action (Fishbein, 1980 & Fishbein & Ajzen, 1975)
Model of entrepreneurial event (Shapero and Sokol, 1982)
Model of implementing entrepreneurial ideas (Bird, 1988)

Problem Statement

Entrepreneurship plays pivotal role in the economic


growth and development of any country and considered
to the engine of a healthy economy. So, most of the
successful SMEs are the are the output of such
entrepreneurial activities with higher strength
entrepreneurial intentions. And it is observed that most
of such initiatives are undertaken by youth. Therefore, it
is needed to study the impact of entrepreneurial
knowledge on entrepreneurial intentions with the
moderating role of personal attitude.

Research Questions and


Objectives

Main Question:

What are the bases of individual entrepreneurial intention?


Sub Questions:
Does entrepreneurial knowledge affect the entrepreneurial intention?
Does personal attitude affects the decision to be an entrepreneur?
What are the consequences that motivate an individual to start an
entrepreneurial career?

Objectives:

To investigate the basic individual factors shaping the entrepreneurial


intentions.
To find how much entrepreneurial knowledge helps an individual in shaping
entrepreneurial intentions.
To find the impact of personal attitude on the relation between individuals
entrepreneurial knowledge and entrepreneurial intention.
To find out how much the young generation consider entrepreneurship as an
attractive field.

Significance and scope of


study

This study will add to the body of knowledge and identify the
priorities of youth engaged in the studies at university level and
try to study their attitude towards entrepreneurship and evaluate
their priorities to select an entrepreneurial career.
The most important factors associated to individual are discussed
here where the intentions of youth will be studied contributing to
the body of knowledge especially in Pakistani context. The study
will provide facts in this regards for policy making for both
educational institutions as well as government sector to promote
entrepreneurship.
The data was collected form the students of management sciences
at different universities from Islamabad, Rawalpindi (Urban), Gilgit
and Skardu (Rural) cities of Pakistan. The focus was to identify the
future prospects of entrepreneurship.

Outline of Presentation

Introduction
Literature Review
Theoretical Framework and Hypothesis
Methodology
Results and Discussions
Recommendations and Conclusion

Ali et al (2011)
Tshikovhi and Shambare published in April, 2015
Roxas (2014)
Lin (2004

(Lin &Chen, 2009; Harris, 2011; Huggins & Thompson,


2015; Atef & Al-Balushi, 2014; Huggins and Williams, 2011;
Wyrwich, 2015; Tan & Yoo, 2015)

Entrepreneurial Knowledge
Statements/arguments

Reference

Entrepreneurial knowledge can be defined in terms of


ability of an individual to recognize, capture and create
an opportunity and take calculated actions to bring an
innovative product, service or idea to the market
realizing an innovative knowledge practice.
It refers to the content knowledge of an individual
regarding business operations, resource availability,
opportunity identification and exploitation and other
entrepreneurial activities. Entrepreneurial Knowledge
comes from the interaction of individual with society
where he/she belongs, education, and training and on
hand practice so they are considered more important
in the development of human resource.
Entrepreneurial learning is a bipolar activity which
includes learning by studying action principles and
learning by doing. Entrepreneurial knowledge is
considered to be the main ingredient of
entrepreneurial activities and establishing new
businesses because of its high impact on
entrepreneurial intentions leading to individual,

Grossman & Helpman,


1994; Harris, 2001; Ibert,
2007 & Zucker, Darby,
Furner, Liu & Ma, 2007;
Koe, Saari, Majid &
Ismail, 2012.

Ravindran & Iyer, 2014;


Roxas, 2014; Franco,
2010; Turker & Sonmez
Seluk, 2009;
Johannisson, 1991;
Wyrwich, 2015

Frese & Zapf, 1994;


ystein Widding, 2005.

Aspects of Entrepreneurial knowledge


studied
Statements/arguments

In terms of product, market, organizational and financial


level.
exploitation of resources, opportunity identification,
market analysis, planning for new venture creation,
financial planning, product designing, market
development, strategic policies and innovation practice

In terms of subject knowledge as marketing,


organizational behavior, strategic management,
finance, marketing and human resource
management
Growth management, idea generation and innovation,
risk and rationality, creativity and public relations, social
links and obligations

Reference
ystein Widding, 2005

Shane, 2000

Hindle, 2007

Agrawal, 2005; Fiet,


2001.

Personal Attitude
Statements/arguments

Attitude is mental status referring to the readiness level


based on the prior experience dictating an individuals
response and behavior to the objects and situation which
he/she encounters in everyday life.
It is the amalgamation of individuals emotional,
perceptual, motivational and cognitive processes in
relation to the place and society he/she belongs.
It refers to the probability of specific behavior an
individual shows in a specific situation.
Attitude is a psychological tendency of an individual to
show a degree of favor or disfavor in evaluating a
particular entity and are low at stability and high at endurance.

Reference

Allport, 1935.
Krech &Crutchfield,
1948
Campbell, 1950
Eagly & Chaiken, 1993;
Bem, 1970.
Schwarz & Strack, 1991

Categories of Attitude
Statements/arguments

Reference

Attitude guides an individuals behavioural decisions.


Attitudes differ in terms of the degree of strength,
centrality and crystallization yet studied as the best
indicators for action taking by an individuals.

Schwarz & Bohner,


2001;
Krosnick & Abelson,
1992; Petty & Krosnick,
2014

Clasification of Attitude:
1- classical conditioning refers to the attitude evoked by
previously neutral object either positively or negatively
2- Operant conditioning, the attitude and behavior are
the outcome of reward and appraisal.

Eagly & Chaiken, 1993

Structure of Attitude:
1- Intra attitudinal structure refers to the individual
attitude considered as single
2- Inter attitudinal structure refers to more than one
attitude and how they are related to each other and to
the individuals mind.

Eagly & Chaiken, 1993

Cont...

Statements/arguments

Reference

Entrepreneurs are significantly different


form other people in terms of cognitive
biases, heuristics abilities, or thinking
patterns, risk taking propensity, decision
making and problem solving.

Busenitz & Barney, 1997; Simon,


Houghton, & Aquino, 2000; Alvarez &
Busenitz, 2005; Markman, Baron &
Balkin, 2005;Baron, 2007; & Shaver &
Scott, 1991; Townsend, Busenitz &
Arthurs, 2010.

Personal attitude forms the basis for


entrepreneurial intentions which acts as
ones judgment to run and own a
business.

Krueger et al., 2000 ; Fatoki, 2010;


Cardon et al., 2009

Entrepreneurial Intention
Statements/arguments

Entrepreneurial intention, a power that dictates an


individual to think about an idea and bring it to
consideration and makes it workable. It may be
focused on either new venture creation or creating
values in the existing one.
Entrepreneurial intention represents the firm
persuasion of an individual and a strong faith to
start a new business venture in some future period
Intentions represents the availability of an
individual to an entrepreneurial activity and selfprediction to engage in a relative required
behaviour.
Entrepreneurial intentions represents ones desire to
start and own a business that is observed in terms
of specific set of behavior that an individual shows.
Intentions acts as conceptual hub for connecting
entrepreneurial behavior to wide range of factors
that may influence the entrepreneurial behaviour.

Reference

Bird (1988)
Thompson, 2009
Ajzen, 1991; Ajzen &
Fishbein, 1977
Krueger et al., 2000; Crant,
1996.
Bagozzi, Baumgartner & Yi,
1989.
(Krueger et al., 2000;
Carsrud & Brnnback, 2009
& Krueger, 1993).

Statements/arguments

Reference

Entrepreneurial intention are deeply fundamental to


human decision making and are deeply rooted into
individual personality so it bears links with decision
making under risk and uncertainty.
Entrepreneurial intentions are individuals judgments and
decisions to be the master of their own or owning ones
own business

Krueger, 2009
Fayolle & Lin, 2014.
Fatoki, 2010.

Entrepreneurship actually starts with firm intentions of an


individual where success is directly proportional to the
level of intention.
It is the key element in the firm creation.

Conner & Armitage,


1998; Krueger, 1993.

Entrepreneurial education is vital in developing intent,


the personal interests drag individuals to wards
entrepreneurship education, where this type of selection
is called Self selection bias.
While other researchers give less importance to
education.
Human capital theory states that the investment in
human capital leads to higher entrepreneurial intentions .

Lin, 2008;
Kolvereid & Moen,
1997;
Lin, 2004; McMullan
& Long, 1987, Noel,
2002
Grey, 2002

Bird, 1988.

Becker, 1975

Literature Gap

Entrepreneurship plays pivotal role in the


economic growth and development of any country
and considered to the engine of a healthy
economy. So, most of the successful SMEs are the
are the output of such entrepreneurial activities
with higher strength entrepreneurial intentions.
And it is observed that most of such initiatives are
undertaken by youth. Therefore, it is needed to
study the impact of entrepreneurial knowledge on
entrepreneurial intentions with the moderating
role of personal attitude.

Outline of Presentation :

Introduction
Literature Review
Theoretical Framework and Hypothesis
Methodology
Results and Discussions
Recommendations and Conclusion

Theoretical Framework

Personal
Attitude
Entrepreneurial
Knowledge

Entrepreneurial
Intention

Hypothesis

No

Hypothesis

H1

There is a significant positive relationship between


entrepreneurial knowledge and entrepreneurial
intention.

H2

Personal attitude moderates the relationship between


entrepreneurial knowledge and entrepreneurial
intention.

Outline of Presentation

Introduction
Literature Review
Theoretical Framework and Hypothesis
Methodology
Results and Discussions
Recommendations and Conclusion

Research Design

Nature

Explainator
y

Study
Field Study
(Non
Contrived)

Investigatio
n

Purpose

Correlation
al

Hypothesis
Testing

Study Type

Quantitativ
e

Data

Time
Horizon

Primary

Crosssectional

Research
Inference

Minimal

Research
Design
Data Analysis SPSS 21
Software
Sampling Unit

Individual

Data Collection Survey Questionnaire- In Hard form.


Method
Population
Frame

Individuals enrolled in Business


Management Studies from public and
private universities from Islamabad,
Rawalpindi, Gilgit and Skardu out of 175
DAIs recognised by HEC.

Sample Size

331 / 500

Sampling

Non Probability
Sampling

Questionnaire
& Scale

Closed ended - 21 Items - 4 sections


Section

66.2% response rate


-

Simple Random

Outline of Presentation

Introduction
Literature Review
Theoretical Framework and Hypothesis
Methodology
Results and Discussions
Recommendations and Conclusion

Descriptive
Statistics

AGE

GENDER

EDUCATION EXPERIENC
E

331

331

331

331

Missing

Std. Deviation

.669

.500

.946

1.038

Variance

.448

.250

.894

1.077

Mean

2.16

.52

2.65

1.78

Valid

Age

Less than 20

Frequen Percent
cy
27
8.2

21-25

244

73.7

26-30

31-35

47

14.2

2.1

1.8

331

100.0

More than 35
Total

Education

Undergraduate
Graduate
Masters
Higher Studies
(M.Phil/PhD)
Total

EXPERIENCE

Less than
1
1-2
3-4

5-6
More than
6
Total

Frequen Percen
cy
t
52
15.7
69
152
58

20.8
45.9
17.5

331

100.0

Frequen Percent

cy
178
53.8

84
44
15
10

25.4
13.3
4.5
3.0

331

100.0

Gender

Frequen Percen
cy
t
158

47.7

Male

173

52.3

Total

331

100.0

Female

Reliability
Statistics
Construct
Entrepreneurial Knowledge
(I.V)
Personal Attitude (Mod.V)
Entrepreneurial Intention
(D.V)

Cronbachs
Alpha
.87

Number
of Items
6

.752

.881

Correlation
Analysis

Variables
1 Age
2 Gender
3 Education
4 Work Experience

Entrepreneurial
Knowledge

6 Personal Attitude

Entrepreneurial
Intention

Mean S.d
2.16
.52
2.65
1.78

.67
.50
.95
1.03

3.51

.88

-.034

.73

1

.170** 1
.369** -.012 1
.496**
.
.
173

3.84

**

288

**

-.112 .089

*
193**
.026
.
-.048 .060

379**

185**

3.80

.85

.009

**. Correlation is significant at the 0.01 level (2-tailed).


*. Correlation is significant at the 0.05 level (2-tailed).

-.036 .095

187**

533** 537**

Moderation Regression
Analysis

Predictors
Step 1:
Control variables
Step 2:
Entrepreneurial
Knowledge

.515***

Entrepreneurial
Intention
R2
R2
F

.044
.044

.292
.248
26.86

Step 3:
Personal Attitude

.517***

.302

.257

28.1

10.68

10.94

*p<.05, **P<.01, ***P<.001 (Control): Gender, Age, Qualification &


Step 4:

Experience

Entrepreneurial
Knowledge X Personal
Attitude

.604***

.381

.337

40.02
3

13.30

Status of Hypothesis

N
o

Hypothesis

H1 There is a significant positive relationship between


entrepreneurial knowledge and entrepreneurial
intention.
H2 Personal attitude moderates the relationship between
entrepreneurial knowledge and entrepreneurial
intention.

Status

(Accepted
)

(Accepted
)

Outline of Presentation :

Introduction
Literature Review
Theoretical Framework and Hypothesis
Methodology
Results and Discussions
Recommendations and Conclusion

Recommendations and
Limitations

This study was focused on variables, more important to individual


personality. There are many other variables that may directly or
indirectly influence the entrepreneurial intent.

Personal attitude is tested as a moderator, it may act as an


independent variable too. Future studies may test it with other
demographic variables.

The sample (331) was selected form few cities. Future studies may
increase the sample size and add other major cities and remote areas
too.

Quantitative approach were implied to collect data through closed


ended questionnaires. A qualitative approach may be more appropriate
in understanding intentions.

Conclusion

Knowledge is considered to be the basic ingredient in understanding any


subject matter; in this study entrepreneurial knowledge refers to the
level of understanding of an individual in terms of entrepreneurship and
entrepreneurial activities.
In light of results obtained from this study, entrepreneurial knowledge is
positively correlated to entrepreneurial intentions. The level of
entrepreneurial knowledge indicates the strength of entrepreneurial
intentions.
While testing the moderation effect of personal attitude it is observed
that entrepreneurial knowledge influences personal attitude too. It was
observed that participants who are more knowledgeable on
entrepreneurship shows more positive attitude.

A good knowledge base and a positive attitude may contribute


lot in shaping stronger entrepreneurial intentions whereas
these intentions conforms the establishment of new ventures.