An investigation of undergraduate student self-employment intention and the impact of entrepreneurship education and previous entrepreneurial experience

  • Dell McStay

Student thesis: Doctoral Thesis


Entrepreneurship is a worldwide phenomenon with economic growth across the globe positively impacted by the emergence of new and innovative business start-ups. These new small businesses play a significant role in job creation, influencing politicians to recognise and support entrepreneurial start-up activity due to its positive contribution to the economy. Historically, economists have supported the view that entrepreneurship is responsible for economic expansion (Cole, 1965; Weber, 1930) due to its association with profit orientation, capital investment and the creation of new markets (Cantillon, 1755; Schumpeter, 934). Australia is documented as a country populated with a significant number of small businesses (Landstrom, 2005. p115). In reference to the number of businesses, their proportion of employment and GDP in 2006 was approximately 1.8 million small businesses (ABS) in a population of approximately 20 million residents. The past decade has seen an increasing acknowledgement by the Australian government of the need for entrepreneurial activities as a means to global competitiveness (NICTIA, 2007). The Global Entrepreneurship Monitor (GEM) is a research program providing an annual assessment of the national level of entrepreneurial activity. The GEM (2006), including research collected from over forty countries, states that as much as one-third of the differences in economic growth among nations may be due to differences in entrepreneurial activity. Thus, governmental units, society, and educational institutions worldwide have documented that the individual entrepreneur is critical in the development of new business ventures (Hisrich, Peters and Sepherd 2005). Entrepreneurship as an academic discipline is still considered relatively new although its origin can be traced back to the seventeenth century, when economist Richard Cantillon coined the term, ‘entrepreneur’ (Cantillon, 1755). The individual entrepreneur has been studied in numerous studies using a variety of different methodologies and yet, arriving at the conclusion that one psychological profile or definition of the entrepreneur exists has been a seemingly impossible task (Begley and Boyd, 1987; Brockhaus, 1982; Low and MacMillan, 1988). Thus, the psychological approach in entrepreneurship research has moved away from the investigation of personality traits alone, to the exploration of behaviour, motivation and cognition (Shaver and Scott, 1992). Research into the motivation and cognitions of entrepreneurs is an approach that attempts to understand more about the antecedents to entrepreneurial behaviour than the personality characteristics/profile of entrepreneurs. Studies considering individuals’ entrepreneurial intentions is one of the more recent approaches to understanding the entrepreneurial process and has been adopted by several authors (Autio et al., 2001 Davidsson, 1995; Krueger and Brazeal, 1994; Peterman and Kennedy, 2003; Shapero, 1982; Zhao et al., 2005). An individual’s entrepreneurial intention claims to be a moderate predictor of future entrepreneurial behaviour (Ajzen, 1991; Kim and Hunter, 1993). Using a sample of American students facing career decisions Krueger et al. (2000) found that intentions models offered strong statistical support for predicting entrepreneurial behaviour. Understanding the antecedents of entrepreneurial intentions increases our understanding of intended entrepreneurial behaviour. Accordingly, entrepreneurial intentions helps explain why many entrepreneurs decide to start a business even before they begin an opportunity search (Krueger et al., 2000). The development of a new business requires individuals to make conscious choices and decisions and is a deliberate behaviour that is intentional by nature. Therefore, it would seem logical that intentions could provide valuable insights into the type of individuals attracted to becoming entrepreneurs. Shapero and Sokol (1982) have developed a model of 'entrepreneurial event formation’ considering life-path changes and their impact on the individual’s perceptions of desirability and perceptions of feasibility related to new venture formation. This model assumes that lifechanges (displacement) precipitate a change in entrepreneurial intention and subsequent behaviour. Displacement can occur in either a negative form (e.g., loss of a job) or a positive form (e.g., financial support). The intention to become self-employed and form a new venture and/or business therefore depends on the individual’s perceptions of desirability (e.g., ‘do I want to do it?’) and feasibility (e.g., ‘do I have the resources to do it?’) in relation to the activity of starting a business. The Theory of Planned Behaviour (Ajzen, 1991) is another intentions model and has been used for its predictive power and applicability across a variety of content domains including entrepreneurship. Based on the beliefs, attitudes and intentions relationship, a person’s beliefs and attitudes regarding a particular behaviour inform their intention to perform that behaviour. In the entrepreneurship context this means an entrepreneurs’ beliefs and attitudes regarding entrepreneurship form their intention to become self-employed and create new ventures. Krueger et al. (2000) examined the Theory of Planned Behaviour’s predictive ability in relation to intentions to start a business and confirmed that attitude and perceived behavioural control were significantly related to entrepreneurial intention. Researchers in the field of entrepreneurship have used both or a combination of the Shapero and Ajzen models with results indicating that for self-employment intentions the two models can be successfully integrated into one (Kolveroid et al., 2006; Krueger et al., 2000). Previous research has shown that numerous forces play a significant role in determining whether a person chooses to be self-employed or to work for some-one else. It would appear that career choice is a cognitive process driven by beliefs, attitudes and experiences and prior research confirms that entrepreneurial careers fit a similar pattern (Davidsson 1991; Katz 1992; Shaver and Scott 1992). Social Cognitive Career Theory (SCCT) also provides a framework to understand the processes through which individuals form interests and make choices in relation to occupational pursuits (Lent, Brown and Hackett, 1994). SCCT focuses on an individual’s personal background and learning experiences as influencing factors on career choice behaviour. This research considers the influence of both entrepreneurship education and previous entrepreneurial experience as exogenous factors that may shape an individual’s cognitive process of self-employment intention. Krueger et al. (2000) found that personal and situational variables indirectly influenced entrepreneurial intentions through influencing key attitudes and perceptions. Accordingly, entrepreneurship education and previous entrepreneurial experience will affect entrepreneurial intentions only if they change key attitudes and perceptions such as, perceived desirability of self-employment and perceived entrepreneurial self-efficacy. This research explores the role of these exogenous factors in the formation of undergraduate students’ self-employment intentions. Hatten and Ruhland (1995) reported that participation in a Small Business Institute educational programme enhanced senior students’ entrepreneurial attitude. This study and others (Krueger, 1993; Peterman and Kennedy, 2003) suggest that entrepreneurship education is an important exogenous factor to include in entrepreneurial intentions models as an event influencing participants’ attitude towards and perceptions of entrepreneurship.
Date of Award31 May 2008
Original languageEnglish
SupervisorMichael Harvey (Supervisor)

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