A review of entrepreneurial antecedents, and the appliance of the TPB on a group of entrepreneurs

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1 A review of entrepreneurial antecedents, and the appliance of the TPB on a group of entrepreneurs Abstract The benefits of entrepreneurial practices are an already established fact that moves part of the actual business market. It becomes then relevant to study the different factors that influence people found new firms. This work reviews the existing literature surrounding the entrepreneurship concept. In particular, it explores the different ways of analysing entrepreneurship, the main factors or antecedents and the recent models used to study this research field. In addition to the theoretical framework review, the main research contribution is to empirically analyse a group of 459 nascent entrepreneurs (non-students). The research uses the Entrepreneurship Intentions Questionnaire (Liñán and Chen, 2009) to collect data from a group of nascent entrepreneurs; and the Theory of Planned Behaviour serves as the theoretical framework to drive the empirical analysis. Results show that getting data from nascent entrepreneurs provides a wider view of the theoretical model. More precisely, the research is able to capture data from respondents in different aging stages what provides some relevant differences among them. In addition, the personal traits captured (sex, education and experience ) also help to understand some differences on the patterns or relationships between the constructs among the groups

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3 A review of entrepreneurial antecedents, and the appliance of the TPB on a group of entrepreneurs Executive summary This document is a research project on entrepreneurship. In particular, this paper provides a wide literature review about the field and implements a practical research process by analyzing Entrepreneurial Intentions through an entrepreneurship intention model (TPB). Compared to previous studies, the main contribution of this research is that it uses a sample based on nascent entrepreneurs instead of students. This is a pretty new approach in literature as only few researches have used samples of nascent entrepreneurs. The major steps in conducting a research project are the identification of research problem, literature review, specifying the purpose of research, data collection, analyzing and interpreting the data and reporting and evaluating research. The main findings of the research are the following. The first part of the research process comprehends a wide review of the state of the art of entrepreneurship behaviours giving a general idea of the current literature on the field. In particular, it outlines two ways of analysing entrepreneurship; through intentions and opportunities. It also identifies some factors that have contributed to explain entrepreneurship behaviours such as motivational antecedents, prior knowledge, personal traits, situational variables and demographic variables. Finally, it describes five entrepreneurship-intention models (Entrepreneurial Event Model, Theory of Planned Behaviour, Attitude Orientation Model, Entrepreneurship Potential Model, Davidsson s Model) that have been used in recent literature to explain entrepreneurship phenomenon. In the practical part of the project some hypotheses were formulated in order to empirically analyse the TPB (adapted to entrepreneurship) on a group of nascent entrepreneurs. Some conflicts were found when analysing the role of Social Norms; however, the TPB was found to be good approach to analyse entrepreneurship intentions Finally, the control variables collected from the respondents were analysed in order to identify common patterns among the sample. It was found that personal traits also play an important role in the study of entrepreneurship intentions

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5 A review of entrepreneurial antecedents, and the appliance of the TPB on a group of entrepreneurs Contents Abstract Executive summary Introduction Literature review How have entrepreneurship behaviours been measured? Entrepreneurship intentions Opportunities as a way to understand entrepreneurship behaviours What factors have been used for analysing entrepreneurship intentions and opportunities Motivational antecedents to intentions Prior knowledge effect on both entrepreneurship opportunities and intentions Personal traits and situational variables of entrepreneurs Demographic variables and cultural values Models generally employed for studying entrepreneurship The Entrepreneurial Event Model The Theory of Planned Behaviour Entrepreneurial Attitude Orientation Entrepreneurial Potential Model Davidsson s Model Some considerations and conflicts when approaching entrepreneurship models Conflicts in measurement Considerations on the samplings Research contributions or conflicts on the antecedents of the TPB on entrepreneurship Research gap, model and hypotheses Model and hypotheses

6 Carla Riverola Bataller 4 Research design Scenario and procedure Questionnaire and measures An overview on the sample and the data A comparison between the main characteristics of the sample and the GEM A first analysis of the data through the control variables Empirical results Measurement model: Psychometric analysis of the EIQ Structural model (SEM) Compared results for each subsample (for each control variable) Analysis of the relationship between SN and PA; and the relationship of SN and PBC Compared results for model A Compared results for model B Discussion A review on the findings of the empirical analysis An analysis on the personal traits of entrepreneurs Limitations and future lines of research Conclusions Conclusions on the model References List of figures List of tables Appendix Appendix A: List of the constructs and measures (in Catalan) Appendix B: Compared results for model A for each subsample ( gender, Age, Education and experience )

7 A review of entrepreneurial antecedents, and the appliance of the TPB on a group of entrepreneurs Appendix C: Compared results for model B for each subsample ( gender, age, education and experience ) Appendix D: Results among the different subsets Appendix E: Compared results for the three models for each subsample Appendix F: T-Tests for gender Appendix G: ANOVA tests for age Appendix H: ANOVA tests for education Appendix I: T-Tests for experience Appendix J: Summary table for the T-Tests

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9 A review of entrepreneurial antecedents, and the appliance of the TPB on a group of entrepreneurs 1 Introduction New companies are creators of new jobs; therefore, entrepreneurship is considered an important economic force (Davidsson, 1995). In particular, according to Kuratko (2005) entrepreneurship practices are an integral part of the renewal process that pervades and defines market economies (in terms of technological change and productivity growth) and entrepreneurial firms are an essential mechanism that enables millions of people (including women, minorities, and immigrants) to access the pursuit of economic success. For this reason, the identification of factors predicting business start-up success has been an important theme in the literature in order to make more efficient the promotion polices. Over the years, the decision to become an entrepreneur has been analysed through different factors such as personality traits (McClelland, 1961), situational variables such as age, sex, education... (Reynolds et al., 1994), demographic variables (Robinson et al., 1991) or economic growth (Schumpeter, 1934) but in general, its predictive capacity was low. In an attempt to improve the predictive capacity, Gartner (1988) challenged the whole approach by arguing that the behaviour of creating a new venture should be fundamental to the definition of entrepreneurship. Thus, researchers have developed behavioural models in order to analyse both intentionality (Bird, 1988; Krueger et al., 2000; Dimov, 2007) and opportunity (Casson, 1982; Shane and Venkataraman, 2000; Eckhardt and Shane, 2003; Hansen and Shrader, 2007; Alvarez and Barney, 2007) of entrepreneurship through different factors or antecedents. However, most of the empirical research on these models has relied on data collected exclusively from samples of university students or existing entrepreneurs; and few studies have included nascent entrepreneurs. Consequently, there is still some controversy on the outlined factors predicting entrepreneurship intentions (McGee et al. 2009). The aim of this research is to review in detail the state of the art on the entrepreneurship field; and to make a practical contribution through a group of nascent entrepreneurs. Within the theoretical framework the document examines previous research on entrepreneurship from a behavioural point of view; based on both intentionality and opportunities research lines. The document also explores the recent entrepreneurial models developed; and revises their main contributions or conflicts. Within the practical part of the study, the research uses the Entrepreneurship Intentions Questionnaire (EIQ) developed by Liñán and Chen (2009) to collect data from a group - 9 -

10 Carla Riverola Bataller of nascent entrepreneurs. The sample will be used to empirically test an entrepreneurship-intention model in order to analyse the relationship among the different constructs of the model. The organization of the document is as follows. After this introduction, chapter two revises the state of the art of the entrepreneurship field. Chapter three describes the research gap and presents the theoretical model adopted and the proposed hypotheses. Chapter four defines the research design; including a description of the scenario and procedure, and the questionnaire that will be used. Chapter five describes the empirical analysis including both the measurement and the structural models. Chapter six discusses the results obtained in the data analysis and chapter seven describes the main limitations of the research. Chapter eight highlights the main conclusions of both the research and the master thesis project; and finally, chapter nine identifies some future lines of research

11 A review of entrepreneurial antecedents, and the appliance of the TPB on a group of entrepreneurs 2 Literature review Schumpeter (1934) defined entrepreneurs as individuals whose function was to carry out new combinations of means of production. Actually, he was among the firsts to identify the entrepreneur as an entity worthy to study. In this sense, the identification of factors predicting business start-up activities has been an important theme in the literature. First approaches on entrepreneurship were based on analysing some factors or common patterns among entrepreneurs. For instance, McClelland (1961) among others asserted that qualities associated with a high need for achievement (preference for challenge, acceptance of personal responsibility for outcomes, innovativeness) characterized successful initiators of new businesses. Similar researches were made by Litzinger (1965), Collins and Moore (1970), DeCarlo and Lyons (1979) and Cooper and Dunkelberg (1981) who attributed personal traits to entrepreneurs. In 1988, Gartner challenged the whole approach by arguing that the behaviour of creating a new venture, not the personality of the founder, should be fundamental to the object of study. He added that in behavioural approaches to the study of entrepreneurship; this is seen as a set of activities involved in organization creation, while in trait approaches an entrepreneur is a set of personality traits and characteristics. In consequence, he stated that research on the entrepreneur should focus on what the entrepreneur does and not who the entrepreneur is. Thus, researchers focused on measuring entrepreneurship activities through behaviours; in particular, through the analysis of intentionality (Bird, 1988; Krueger et al., 2000; Dimov, 2007) and opportunities (Casson, 1982; Shane and Venkataraman, 2000; Eckhardt and Shane, 2003; Hansen and Shrader, 2007; Alvarez and Barney, 2007). These two ways of measuring entrepreneurship are somewhat related. On one hand, there needs to be an intention to exploit an opportunity (Dimov, 2007); whereas, on the other side, opportunity perceptions reflect an intentional process (Krueger et al., 2000). In addition, in order to accomplish a better understanding of the different factors influencing either entrepreneurship opportunities or intentions, researchers have developed theoretical models (Shapero and Sokol, 1982; Ajzen, 1991; Robinson et al., 1991; Krueger and Brazeal, 1994; Davidsson, 1995). The organization of the chapter is as follows. Section 2.1 describes how entrepreneurship behaviours have been measured, focusing on both intentions and opportunities. Section 2.2 defines the main factors that have been used for analysing

12 Carla Riverola Bataller entrepreneurship intentions and opportunities. Section 2.3 overviews the different models that have been developed and used in literature to predict entrepreneurship behaviours. Finally, section 2.4 revises some of the main conflicts on the models in order to define their main contributions and limitations to take into account. 2.1 How have entrepreneurship behaviours been measured? This section addresses the main ways or measures adopted when trying to understand entrepreneurship. In particular, the section focuses on reviewing the main issues on measuring entrepreneurship behaviours through intentions and opportunities Entrepreneurship intentions Although behaviour can result from unconscious and unintended antecedents, what is of interest here is a conscious and intended act of founding a firm (Bird, 1988; Krueger et al., 2000). Therefore, it seems reasonable to analyse how this decision is made. Focusing on the pre-decision stage of becoming entrepreneur intentions seem to be the best predictor of behaviour (Fishbein and Ajzen, 1975). Actually, intentions capture the motivational factors which influence behaviour, indicating the effort the individual plans to exert to put this behaviour into practice. So, the higher the intention to undertake the behaviour, the higher the probability of its performance will be (Ajzen, 1991). In turn, the intention of carrying out entrepreneurial behaviours may be affected by several factors, such as needs, values, wants, habits, and beliefs (Bird, 1988; Lee and Wong, 2004). In particular, the cognitive variables influencing intention are called motivational antecedents by Ajzen (1991). In consequence, more favourable antecedents would increase the entrepreneurship intention (Liñán, 2004). Understanding the consequences of intentions requires the understanding of the antecedents of intention. In fact, much of entrepreneurship is intentional; therefore, the use of well thought-out and research-tested intention models should provide a good means of examining the precursors to entrepreneurship (Krueger et al., 2000) Opportunities as a way to understand entrepreneurship behaviours Opportunities are also an emergent central concept for entrepreneurship researchers. However, little agreement exists about the definition and nature of opportunities (Hansen and Shrader, 2007); in fact, there is some controversy on the nature of opportunities and their source. The aim of this section is to overview the main ideas or

13 A review of entrepreneurial antecedents, and the appliance of the TPB on a group of entrepreneurs concepts giving special attention on the different approaches to the nature of opportunities, their source and the temporal dynamics of the process. Firstly, researchers have addressed the nature of opportunities through different points of view. From an instrumental or rational point of view, entrepreneurial opportunities are opportunities to bring into existence new goods services, raw materials and organizing methods that allow outputs to be sold at more than their production cost (Casson, 1982; Shane and Venkataraman, 2000; Eckhardt and Shane, 2003). To date, there are two competing explanations for how entrepreneurial opportunities are formed (Alvarez and Barney, 2007): the discovery theory and the creation theory. Both theories assume that the goal of entrepreneurs is to form and exploit opportunities (Shane and Venkatraman, 2000); and recognize that opportunities exist when competitive imperfections exist in a market or industry. However, these two theories differ in their analysis of the origin of these competitive imperfections. When opportunities are considered as a discovery, they are seen as a function of a tangible reality (opportunities are out there waiting to be found) whereas; when opportunities are seen as creations they reflect a function of enacted actions that occur during entrepreneurial processes. Of the two theories, discovery theory has received much more attention in the literature (Alvarez and Barney, 2007). The second theme in the literature surrounding the opportunity construct is their source. In particular, Eckhardt and Shane (2003) summarized the existing literature on four ways of categorizing opportunities by sources: Opportunities that result from asymmetries in existing information between market participants and opportunities that result from exogenous shocks of new information. Changes in technology, regulation and other factors generate new information about how resources might be used differently; allowing actors who have early access to the new information to use the information to create products or services and sell them at an entrepreneurial profit (Schumpeter 1934; Shane and Venkataramen, 2000). In contrast, Kirzner (1997) holds that opportunities exist even in the absence of this new information. Opportunities that result from changes generated on the supply or the demand side. The supply side refers to changes in inputs, ways of organizing, production processes or products; whereas the demand side can be generated through customer preferences (Schumpeter, 1934). Productivity-enhancing and rent-seeking opportunities. The pursuit of entrepreneurial opportunity has productivity enhancing outcomes, as economies

14 Carla Riverola Bataller are made more efficient; however, there are some opportunities that have generated personal value but no social value (Baumol, 1990). The initiator of the change. The different types of entities that initiate the changes and the type of initiator are likely to influence the process of discovery. Among the different types of actors that researchers have identified are noncommercial entities, existing commercial entities in an industry, and new commercial entities in an industry (Klevorick et al., 1995). Finally, another important theme surrounding opportunities nature is the temporal dynamics (Short et al., 2010). According to Hjorth (2007), the opportunity construct should be broadened to include the timing of opportunity creation. 2.2 What factors have been used for analysing entrepreneurship intentions and opportunities This section reviews the main factors used in literature to explain both intentions and opportunities research lines. In particular, this section describes the motivational factors used for explaining intentional antecedents and prior knowledge as an antecedent to both intentions and opportunities research lines. The section also includes a review on the main situational variables (such as age, gender, family, socioeconomic status, etc); and demographic variables. Thus, these concepts have made possible both the identification of some significant relationships between several traits; and demographic factors of individuals. However, from a theoretical point of view, these approaches implemented independently from a behavioural framework, have been criticized due to their methodological and conceptual problems, and for their low explanatory capacity (Robinson et al., 1991; Krueger et al., 2000) Motivational antecedents to intentions The intentions of carrying out entrepreneurship behaviours may be affected by several factors such as needs, values, wants, habits and beliefs (Bird, 1988; Lee and Wong, 2004). In particular the cognitive variables influencing intentions are called motivational antecedents by Ajzen (1991). Actually, the main motivational antecedents can be classified whether they address a Perceived Desirability or a Perceived Feasibility (Shapero and Sokol, 1982). On one side, factors influencing Perceived Desirability are usually related to an intuitive thinking affected by attitudes, values and feelings (Liñán and Santos, 2007)

15 A review of entrepreneurial antecedents, and the appliance of the TPB on a group of entrepreneurs In particular, attitudes reflect the degree to which an individual has a desirable or undesirable appraisal of the behaviour (entrepreneurship). Thus, the nature of attitudes was approached through Fishbein and Ajzen (1975) who defined a one-dimensional construct represented by affective reaction alone. However, other approaches have defined attitude as a combination of three types of reaction to everything: affect, cognition and conation (Shaver, 1987). In addition to attitudes influencing Perceived Desirability on intentions, Ajzen (1991) refers to the perceived social pressure from one s peers and significant others impacting one s intention to perform or not to perform a specific behaviour as Social Norms. It has been seen that Social Norms are less predictive of intentions (Fishbein and Ajzen, 1975). In this sense, Social Norms have alternatively been approached in literature as a mediating variable to the intention antecedents (Liñán and Chen, 2009). Social Norms would indirectly influence intentions through impacting onto the direct antecedents of intentions. On the other side, factors influencing Perceived Feasibility (Shapero and Sokol, 1982) have also been addressed in literature as the Perceived Behavioural Control (Ajzen 1991) and the Self-Efficacy (Bandura, 1997); and usually related to a rational thinking (Liñán and Santos, 2007). All three concepts refer to the sense of capacity regarding the fulfilment of firm-creation behaviours. Nevertheless, recent work has emphasized the difference between Perceived Behavioural Control and Self-Efficacy (Ajzen, 2002). In fact, Perceived Behavioural Control would include not only the feeling of being able, but also the perception about controllability of the behaviour Prior knowledge effect on both entrepreneurship opportunities and intentions Prior knowledge is defined as the individual s distinctive information about a specific subject matter (Venkataraman, 1997) and may be the result of previously attained work, experience, education, or other means, that influences the entrepreneurs ability to comprehend, interpret and apply new information (Shane, 2000; Soutaris et al., 2007). However, prior knowledge refers both to the existing knowledge and the exposure to external knowledge. On one side, individuals existing knowledge and abilities may be important drivers for their behaviour. In particular, a greater knowledge of different

16 Carla Riverola Bataller entrepreneurial aspects will surely contribute to more realistic perceptions about entrepreneurial activity (Ajzen, 2002) thus indirectly influencing intentions. Therefore, individuals may be more inclined to choose a career as entrepreneur if they have the confidence to be successful in this choice based on their current knowledge and skills, and on their exposure to others who can provide them with useful knowledge (Krueger and Brazeal, 1994). Grounded on Bandura (1978) assessment that prior knowledge influences one s confidence in his or her skills to successfully undertake career-related activities; Short et al. (2010) investigated the linkage between prior knowledge and intentionality through Self-Efficacy. They actually found that Self- Efficacy (usually considered one of the main antecedents to intentions) is affected by prior experiences. On the other side, the exposure to external knowledge may constitute, or lead to, knowledge that can be used for the good of the individual or the collective (Short et al., 2010). In particular, one s network relationships and access to external knowledge may be an important determinant for would-be entrepreneurs (Davidsson and Honig, 2003) not only because access to knowledge from other entrepreneurs may provide the prospective entrepreneur with useful skills and knowledge, and decrease the ambiguity inherent in the entrepreneurial process (Johannisson, 1996); but also because the exposure to others who have done it themselves, may lead to a stronger belief in the feasibility of a start-up. In addition, several scholars suggest that entrepreneurial learning should be considered as an experiential process were entrepreneurs develop knowledge both by utilizing their skills and knowledge in new projects, as well as developing new knowledge in the ventures they are involved in (Rae and Carswell, 2001; Minniti and Bygrave, 2001). This suggestion requires a distinction on the experience of an entrepreneur and the knowledge acquired thereby (Reuber and Fischer, 1994). One way to distinguish between these two concepts is to consider the experience of an entrepreneur as a direct observation of, or participation in, events associated with new venture creation, while the practical wisdom resulting from what the entrepreneur has encountered represents the knowledge derived from this particular experience (Politis, 2005). Finally, prior knowledge has also been related to opportunities. In particular, Shane (2000) stated that all individuals are not equally likely to recognize a given entrepreneurial opportunity, because people have different stocks of information. In a similar line, Shepherd and DeTienne (2005) associated prior knowledge with the

17 A review of entrepreneurial antecedents, and the appliance of the TPB on a group of entrepreneurs identification of a greater number of more innovative entrepreneurial opportunities and Corbett (2005) suggested that experiential learning can facilitate the opportunity recognition process Personal traits and situational variables of entrepreneurs The following section reviews the existing literature on personal traits and situational variables as additional factors that may have an influence on entrepreneurs. In fact, trait approaches assume that the entrepreneur has a particular personality type, a fixed state of existence, a describable species that one might find a picture of in a field guide, and the point of much entrepreneurship research has been to enumerate a set of characteristics describing this entity known as the entrepreneur (Gartner, 1988). Actually, entrepreneurship research has identified a number of personal characteristics such as: risk taking propensity, sex, age, religion, marital status, parent s occupation, education, previous job satisfaction, social background, independence, leadership, conformity, fear of losing job, self discipline, achievement, optimism, consciousness, etc; are believed to be instrumental in motivating entrepreneurial behaviour (e.g. McClelland, 1961; Litzinger 1965; Collins and Moore, 1970; Gomolka, 1977; DeCarlo and Lyons, 1979; Cooper and Dunkelberg, 1981) In addition, situational variables have been used in many researches to try to explain differences or particularities in entrepreneurial models. It has been shown that some situational variables have an indirect influence on Entrepreneurial Intentions that help to explain the outcomes. These are some relevant findings related to these traits and variables: Age. Levesque and Minniti (2003) showed that the relationship between this variable and the likelihood of starting a new business picks at a relatively early age and decreases thereafter. Gender. Langowitz and Minniti (2005) found that the factors influencing female and male entrepreneurship tend to be the same. In spite of these similarities, women participation rates in entrepreneurship are systematically below those of men. Education. The relationship between education and new firm formation is uncertain, except for richer countries were post graduate training has been shown to have positive effects on high-tech start-up rates (Blanchflower, 2004). Work status choice. Many researches stand for the relationship between an individual s decisions to become an entrepreneur and the availability of employment options. In fact, according to Blanchflower (2004), it is not clear

18 Carla Riverola Bataller whether high unemployment discourages entrepreneurship by reducing its potential markets or increases it by providing an income producing activity for otherwise displaced workers. Family background. According to literature, individuals who have family members and/or close friends who are entrepreneurs tend to be more likely to start their own business than those who have not experienced the same level of exposure to entrepreneurship. Between others, Crant (1996) studied 180 students from the USA and found that the children of entrepreneurs have higher Entrepreneurial Intentions than those without an entrepreneurial parent Demographic variables and cultural values Other additional factors that have been approached when identifying entrepreneurs; are cultural and demographic variables. Culture has been defined as the underlying system of values peculiar to a specific group or society (Mueller and Thomas, 2001). Thus, culture motivates individuals in a society to engage in behaviours that may not be evident in other societies. For this reason, the influence of culture on entrepreneurship has been of continued scholarly interest for over three decades. Researchers have explored the effect of national, regional, and organizational cultures on wealth creation through new venture creation, innovation, and risk taking. Using data from multiple countries and applying diverse research methods, organizational scholars have explored the relationship between cultural variables and entrepreneurial behaviour and outcomes. Empirical studies suggest that significant differences exist in the levels of new firm creation across countries (Blanchflower, 2004). Hofstede's (1980) extensive culture study, leading to the development of four culture dimensions (power distance, uncertainty avoidance, individualism and masculinity), provide a clear articulation of differences between countries in values, beliefs, and work roles. Although Hofstede (1980) did not specify the relationship between culture and entrepreneurial activity per se, his culture dimensions are useful in identifying key aspects of culture related to the potential for entrepreneurial behaviour. Most research about the influence of culture on entrepreneurship has followed Hofstede s (1980) cultural dimensions (e.g. Mcgrath et al., 1992; Mitchell et al., 2000; Hayton et al., 2002). In fact, Mcgrath et al. (1992) analysed 1,217 entrepreneurs and 1,206 non-entrepreneurs in eight countries. They argue that entrepreneurs would tend to exhibit certain levels of those dimensions: high power-distance (PDI+), low uncertainty- avoidance (UAV ), high individualism (IND+), and high masculinity (MAS+)

19 A review of entrepreneurial antecedents, and the appliance of the TPB on a group of entrepreneurs Mitchell et al. (2000), using data from seven countries, found support for the cognitive model across cultures. In the same line, Mueller and Thomas (2001) analysed a sample of more than 1,800 3 rd and 4 th year students at universities in nine countries; through scales for innovativeness and locus of control. They also supported that some cultures are more conducive for entrepreneurship than others according to Hofstede s (1980) cultural dimensions. 2.3 Models generally employed for studying entrepreneurship Several investigations have been contributing to the entrepreneurship literature with some models that try to explain the entrepreneurship phenomenon through the analysis of intentionality and its antecedents. According to Guerrero et al. (2008), in the eighties and nineties the five main models that have addressed entrepreneurship are: The Entrepreneurial Event Model (Shapero and Sokol, 1982), The Theory of Planned Behavior (Ajzen, 1991; adapted to entrepreneurship by Kolvereid, 1996), Entrepreneurial Attitude Orientation (Robinson et al., 1991), Entrepreneurial Potential Model (Krueger and Brazeal, 1994) and Davidsson Model (Davidsson, 1995). Figure 1 exposes the different models on a timing base. As it can be seen from the picture, both the Entrepreneurial Event Model and the Theory of Planned Behaviour are the base for the Entrepreneurial Model. In the same line, the Entrepreneurial Potential Model is the base for Davidsson s Model. Finally, the Entrepreneurial Attitude Orientation follows a different line focused on Personal Attitudes. The following sections overview these five models and provide some examples of researchers that have successfully used intentions models to examine Entrepreneurial Intentions

20 Carla Riverola Bataller Figure 1: Models developed in the eighties and nineties (based on Guerrero et al., 2008) The Entrepreneurial Event Model The first model is the Entrepreneurial Event Model (EE) developed by Shapero and Sokol (1982). This model (Figure 2) defines the interaction of cultural and social factors that can lead to a firm creation by influencing individual s perceptions. Entrepreneurial Knowledge Perceived Desirability Entrepreneurial intentions Perceived Feasibility Figure 2: Theory of Entrepreneurial Event Model (based on Shapero and Sokol, 1982) There are two basic kinds of perceptions: Perceived Desirability and Perceived Feasibility

21 A review of entrepreneurial antecedents, and the appliance of the TPB on a group of entrepreneurs Perceived Desirability, considered the intuitive thinking in the intentions process, is the product of individual s perceptions of desirability of entrepreneurship affected to Personal Attitudes, values, and feelings. In other words, Perceived Desirability measures the individual s perceived attraction towards a given behaviour (to become an entrepreneur) including both intrapersonal and extrapersonal impacts. Perceived Feasibility, considered the rational thinking in the intentions process, is related to an individual s perception of available resources. In other words, Perceived Feasibility measures the individual s personal perceived ability to carry out certain behaviour (entrepreneurship). The EE has been used in several occasions for analysing entrepreneur activities. For example Walstad and Kourilsky (1998) used the EE for analysing the Personal Attitudes and knowledge of ethnic entrepreneurship in USA. Their results showed that African-American youngsters have a stronger desire to start businesses, as well willingness for more entrepreneurship education at their schools. The EE was also used by Peterman and Kennedy (2003) who examined in Australia the effect of participation in an enterprise educational programme on perceptions of the desirability and feasibility of starting a business. The results reveal that the degree of change in perceptions is related to the positiveness of prior experience and the experience in the enterprise educational program The Theory of Planned Behaviour Nine years later, grounded on Fishbein and Ajzen s (1975) Theory of Reasoned Action (TRA), Ajzen (1991) defined the Theory of Planned Behaviour (TPB) with the premise that any behaviour requires a certain amount of planning and it can be predicted by the intention to adopt that behaviour. In other words, the TPB indicates the effort that the person will make to carry out that behaviour (entrepreneurship). The TPB model (Figure 3) assumes a relationship between intentions and behaviour (already defined in the TRA); where the individual intention towards a particular behaviour is directly related to that behaviour and implicitly involves a time effect

22 Carla Riverola Bataller Figure 3: Theory of Planned Behaviour (based on Ajzen, 1991) The model also identifies three attitudinal antecedents of intention (Ajzen, 1991). Two of the antecedents (also maintained from the TRA) reflect the Perceived Desirability of performing the behaviour: Personal Attitude (PA) toward the behaviour and perceived Social Norms (SN). A new antecedent, Perceived Behavioural Control (PBC) is included in the model to reflect the Perceived Feasibility of performing the behaviour. The description of these constructs is the following: Personal Attitude. The PA taps perceptions of the personal desirability of performing the behaviour (entrepreneurship). This attitude depends on expectations and beliefs about personal impacts of outcomes resulting from the behaviour (Fishbein and Ajzen, 1975). In other words, PA toward start-up refers to the degree to which the individual holds a positive or negative personal valuation about being an entrepreneur (Ajzen, 2001; Autio et al., 2001; Kolvereid, 1996). It includes not only affective (I like it, it is attractive), but also evaluative considerations (it has advantages). Social Norms. The perceived SN tap perceptions of what important people in respondents lives think about performing a particular behaviour (entrepreneurship). Included would be the individual s family expectations about the desirability of becoming entrepreneur. These Social Norms should depend on the expected support of significant others. In particular, to the perception that reference people would approve of

23 A review of entrepreneurial antecedents, and the appliance of the TPB on a group of entrepreneurs the decision to become an entrepreneur, or not (Ajzen, 2001). Interestingly, Social Norms are less predictive of intentions (Fishbein and Ajzen, 1975). Perceived Behavioural Control. As outlined, the Theory of Planned Behaviour is an extension of the Theory of Reasoned Action, earlier work by Fishbein and Ajzen (1975). The extended version included the addition of Perceived Behavioural Control to account for situations were non-motivational factors play a role in attitude turning into action. In this sense; according to Ajzen (1991), the PBC taps the perceived ease or difficulty of performing behaviour (entrepreneurship). Individuals usually elect to adopt behaviours they think they will be able to control and master. An example of the use of TPB on the field of entrepreneurship is Kolvereid (1996) that tried to predict the employment status choice of 128 Norwegian undergraduate business students. Tkachev and Kolvereid (1999) did a similar research investigating the employment status choice intentions of 512 Russian university students. In the same line, other researchers used the TPB as a framework to investigate on situational demographic variables. In particular, Autio et al. (2001) used the TPB to analyse factors influencing Entrepreneurial Intentions among university students; using international comparisons from Finland, Sweden, USA, and the UK. Finally, Liñán and Chen (2009) tested TPB on a sample of 519 students from two different countries (Spain and Taiwan). Results also indicated strong support for the TPB on entrepreneurships although they couldn t find significance between SN and EI. In conclusion, both TPB and EE have been widely used in literature for analysing entrepreneurship behaviours. In fact, they are both largely homologous to one another. Both contain an element conceptually associated with perceived Self-Efficacy (Perceived Behavioural Control in TPB; Perceived Feasibility in EE). TPB s other two attitude measures correspond to EE s Perceived Desirability (Liñán, 2004) Entrepreneurial Attitude Orientation In 1991, Robinson et al. generated the Entrepreneurial Attitude Orientation (EAO) scale that explains the attitude prediction through four different sub scales (achievement, self-esteem, personal control, and innovation) and three types of reactions (cognitive, affective or conative). The cognitive component consists of the beliefs and thoughts an individual has; the affective component consists of positive or negative feelings toward the object and the conative or behavioural component consists of behavioural intentions and predispositions to behave in a given way toward the object

24 Carla Riverola Bataller Although many researchers and theorists have recognized the importance of attitudes in understanding the entrepreneur (Drucker, 1970; Gasse, 1985; Greenberger and Sexton, 1987; Olson and Bosserman, 1984), few have recognized that attitude theory may be an alternative approach to personality-based psychological models. For this reason, the EAO has only been analysed in few occasions to study entrepreneurial attitudes. An example of the use of EAO in literature is Koh (1995), who investigated the factors associated with entrepreneurial orientation like psychological, demographic and family characteristics based on this model. This study was made with 200 undergraduate business students in Hong Kong. The most interesting result was that the entrepreneurial intention is significantly associated with a greater need of achievement, higher propensity to take risks, more tolerance of ambiguity and greater innovativeness. Also, the demographic and family characteristics seem to be associated with this inclination Entrepreneurial Potential Model On 1994, Krueger and Brazeal defined the Entrepreneurial Potential Model (EPM) using the previous models of Shapero and Sokol (1982) and Ajzen (1991) supporting their evidence from the corporate venture and enterprise development perspectives. Figure 4: Entrepreneurial Potential Model (based on Krueger and Brazeal, 1994) This model (Figure 4) was developed to seek more about the factors influencing entrepreneurs intentions. They suggest entrepreneurial potential as an antecedent to intentions with a precipitating event (displacement) required as the push or pull factor causing entrepreneurial intent

25 A review of entrepreneurial antecedents, and the appliance of the TPB on a group of entrepreneurs Some researchers have been approaching their investigations through Entrepreneurial Potential Model. An example is Veciana et al. (2005) who compared Puerto Rican and Catalan university students attitudes towards entrepreneurship (samples of business and engineer students). The basic result of this investigation was that attitudes towards entrepreneurship as well as its social function are influential factors for students to decide an entrepreneurial career. Here the results reveal that students have a positive vision of desirability to start a new firm, but they do not perceive it as feasible Davidsson s Model Finally, on the same line of analysing intentions on entrepreneurs; in 1995 Davidsson developed Davidsson s Model to test an economic-psychological pull of factors that influence individual s intentions to go into business. According to the model (Figure 5), intention can be directly influenced by two elements: individual s conviction that this career is a suitable alternative for him/her and situational factors like the current employment status. Figure 5: Davidsson s Model (based on Davidsson, 1995) The model also defines that intentions are indirectly influenced by three elements: general attitudes, domain attitudes and personal background. Firstly, general attitudes comprehend attitudes such as change-orientation, high valuation of money, achievement motivation and competitiveness. Secondly, domain attitudes refer to the following concepts:

26 Carla Riverola Bataller Payoff: a composite of beliefs concerning the workload, risk, and financial gain to be expected by a business founder. Societal contribution: the extent to which respondents perceive entrepreneurs actions as being valuable to society. Know-how: whether the respondent would know what to do if s/he came up with a good business concept and wanted to realize it. Finally, personal background is defined by the consistent relationships between certain personal background variables on one hand, and entrepreneurial behaviour on the other (Stanworth et al., 1989). This variable mainly depends on characteristics like age, gender, vicarious experience, education and radical change experience; which have already demonstrated significant influence on entrepreneurship (Blanchflower, 2004; Levesque and Minniti, 2003; Langowitz and Minniti, 2005). 2.4 Some considerations and conflicts when approaching entrepreneurship models As it has been seen in Section 2.3, there have been a number of developmental intention models; however, the central models used in literature for analysing Entrepreneurial Intentions are both the TPB and the EE (Liñán, 2004). Several investigations found a strong relationship between the TPB and the EE intention-based models; and findings stand that both models are largely homologous to one another (Liñán, 2004). For example, Krueger et al. (2000) compared in USA a sample of 97 senior university business students to understand the competition of the two intentional-based models. More particularly, Krueger et al. (2000) supported that constant advances in modelling intention antecedents have resulted in the current state of the art Ajzen s Theory of Planned Behaviour. For this reason, the research focus is on the TPB as a theoretical perspective to analyse entrepreneurship intentions. This section reports the difficulties or conflicts that researchers face when approaching entrepreneurship intentions. In line with the interest of the research, the analysis is done under the framework of the TPB model Conflicts in measurement According to literature, results have supported the applicability of the TPB to entrepreneurship, despite some conflicts between the various studies (Liñán and Chen, 2009). A good part of these differences may have been due to measurement issues

27 A review of entrepreneurial antecedents, and the appliance of the TPB on a group of entrepreneurs (Chandler and Lyon, 2001). In fact, measuring cognitive variables implies considerable difficulty (Baron, 1998). Thus, the design of the empirical tests has differed widely. Krueger et al. (2000) used single-item variables to measure each construct. Kolvereid (1996) used a belief-based measure of Personal Attitudes. More recently, Kolvereid and Isaksen (2006) have used an aggregate measure for Personal Attitudes, but a single-item variable for intentions. Similarly, some of these studies used an unconditional measure of intention (Autio et al., 2001; Zhao et al., 2005), while others forced participants to state their preferences and estimated likelihoods of pursuing a self-employment career as opposed to organizational employment (Fayolle et al., 2006). To solve this conflict, in 2009 Liñán and Chen developed a measurement instrument for entrepreneurial intention and its antecedents: The Entrepreneurship Intentions Questionnaire (EIQ). In this sense, the EIQ aims to become a reference measuring instrument to study entrepreneurship intentions. Firstly, the questionnaire uses Likert-type scale to measure EI through sentences indicating different aspects of intention. A similar system was already used by Zhao et al. (2005). Secondly, grounded on Ajzen (1991, 2001) who stated that beliefs are the antecedents of Personal Attitudes and suggested using an aggregate measure for Personal Attitudes (beliefs would explain attitude, while attitude would explain intention); Liñán and Chen (2009) decided to measure the PA through an aggregate attitude scale. This is an important difference compared to other studies, such as those of Kolvereid (1996) and Fayolle et al. (2006), where a belief-based measure of PA was used. Thirdly, SN is approached through an aggregate measure of the kind what do reference people think? as previously assessed by Ajzen (1991). In practice, however, some researchers have simply omitted this element from the model (Krueger, 1993) or have posited answers to this question with their respective motives to comply (Kolvereid, 1996; Tkachev and Kolvereid, 1999; Kolvereid and Isaksen, 2006). Finally, as aggregate measures have been used for PA and SN, Liñán and Chen (2009) kept this scheme for PBC as well. However, the PBC is a concept quite similar to Self-Efficacy (Bandura, 1997), and to Perceived Feasibility (Shapero and Sokol, 1982). All three concepts refer to the sense of capacity regarding the fulfilment of firmcreation behaviours. In fact, Self-Efficacy measures have been used instead of Perceived Behavioural Control within the Theory of Planned Behaviour in several studies with positive results (Zhao et al., 2005)

28 Carla Riverola Bataller Considerations on the samplings Another consideration is the lack of diversity in those populations sampled and tested on the TPB on literature (McGee et al., 2009). For instance, much of the existing empirical research has relied on data collected exclusively from samples of university students (e.g., Begley and Tan, 2001; De Noble et al., 1999; Wilson et al., 2007) or small business owners (Baum and Locke, 2004; Forbes, 2005; Markman et al., 2002); but few studies have included nascent entrepreneurs (McGee et al., 2009). At first glance, it may appear that student samples are commonly used simply because most researchers have easy access to a large pool of candidates. However, the use of students should not be condemned out of hand when studying entrepreneurial intentionality. Indeed, university students enrolled in entrepreneurship courses typically exhibit characteristics of nascent entrepreneurial behaviour by engaging in coursework that will prepare them for entrepreneurial careers. However, student samples possess obvious limitations; as for example most students simply do not have the experience and resources to judge whether they can be successful entrepreneurs (McGee et al., 2009). Nascent entrepreneurs, on the other hand, are individuals who have yet to start a new business. However, they possess the desire to start a new business and are involved in specific activities that bring such desires to fruition (Carter et al., 1996). More precisely, Aldrich and Martinez (2001), describe nascent entrepreneurs as individuals who not only say they are currently giving serious thought to the new business, but also are engaged in at least two entrepreneurial activities, such as looking for facilities and equipment, writing a business plan, investing money, or organizing a start-up team. Therefore, it is suggested that nascent entrepreneurs should be the subject of empirical studies to better approach the TPB and in particular the PBC or Self-Efficacy (McGee et al., 2009) Research contributions or conflicts on the antecedents of the TPB on entrepreneurship A third conflict on literature is that previous research on the TPB found that the relative contributions between the three motivational factors to explaining Entrepreneurial Intentions are yet not clear. In fact, in the specific area of entrepreneurship research, only 8 out of the 17 studies previously reported included SNs in the analysis. However, two of them did not perform any regression analysis