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Journal of Entrepreneurship in Emerging Economies: Article Information
Journal of Entrepreneurship in Emerging Economies: Article Information
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Theory of
An extended model of theory of planned
planned behaviour behaviour
Abstract
Purpose – The purpose of this study is to provide an extended model of the theory of planned behaviour
(TPB) and examine how institutional infrastructure and two social factors – peer effect and gender
discrimination – determine entrepreneurial intention in emerging economies such as India.
Design/methodology/approach – Using a structural equation modelling (SEM) approach, the proposed
model is tested on a sample of 265 post-graduate students from the Indian Institute of Management campuses in
India. Perceived gender discrimination is used as a grouping variable to test its impact in the model.
Findings – The study found that peer effect has positive association with an individual attitude towards
entrepreneurship. It also found positive moderating effect of institutional infrastructure on entrepreneurial
intention in a regional entrepreneurial ecosystem, but in case of entrepreneurial self-efficacy, the result is non-
conclusive. Further, our results establish that gender discrimination has varying influence but remains a
significant factor to choose entrepreneurial career in emerging countries such as India.
Research limitations/implications – The study adds to the understanding of drivers or antecedents to
entrepreneurial intention, especially in emerging economy context and finds its usefulness in country such as
India. It contributes to the existing model by empirically proving the role of peer effect and institutional
infrastructure in emerging economies which are characterised by weak institutions and inadequate access to
resources to start and sustain any entrepreneurial activity.
Practical implications – The results make several implications for academic institutions, entrepreneurial
ecosystem stakeholders and policy makers in emerging economies. The academic institutions, universities
and incubation hubs can consider promoting a peer-group culture that strengthens individual’s EI in
emerging economies. Policy makers and stakeholders should build an encouraging entrepreneurial ecosystem
with adequate institutional infrastructure to promote entrepreneurship.
Originality/value – The authors extend research on entrepreneurial intention beyond individual factors
(personal-level variables) and examine the contingent role of institutional infrastructure and socio-cultural
factors (peer effect and gender discrimination). Whilst TPB successfully predicted entrepreneurial intention in
Western settings, this study provides strong empirical evidence to this research in emerging countries.
Keywords Theory of planned behaviour, Emerging economies, Entrepreneurial intention,
Gender discrimination, Institutional infrastructure, Peer effect
Paper type Research paper
1. Introduction
Journal of Entrepreneurship in
The theory of planned behaviour (TPB) (Ajzen, 1991) is a widely accepted tool to predict Emerging Economies
intention and behaviour across a variety of settings and has been popularly used to examine © Emerald Publishing Limited
2053-4604
the entrepreneurial intention (Kolvereid and Isaksen, 2006; Solesvik et al., 2012). Individuals DOI 10.1108/JEEE-09-2018-0089
JEEE or groups display due intentions after examining the desirability (perception of an
individual appeal to start a business) and the feasibility (the degree to which one feels
capable of doing so) of choosing entrepreneurship as an individual career (Lee et al., 2011;
Krueger et al., 2000). Schlaegel and Koenig (2014) extensively reviewed the previous studies
on TPB and entrepreneurship event model (EEM) (Shapero and Sokol, 1982) in various
regions/countries. Despite its wide acceptance and application, many scholars believe that
research on entrepreneurial intention (EI) needs to focus beyond individual factors
(personal-level variables) and should explore the contingent role of the entrepreneurial
ecosystem where entrepreneurs receive required resources to start their ventures (Fayolle
and Liñán, 2014; Schlaegel and Koenig, 2014; Roundy, 2017). In response to this theoretical
limitation, a majority of entrepreneurship research has studied the entrepreneurial
ecosystem in developed countries (Schlaegel and Koenig, 2014), with a very limited focus on
emerging countries like India (Bruton et al., 2008). Mustafa et al. (2016) argue that such
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Entrepreneur Leaders Scorecard[1] indicates that India is the worst performer for women
entrepreneurs to decide and run a successful business (Srivastava and Misra, 2017).
There is a continuous struggle for setting up the culture for women entrepreneurs in
India (Jha et al., 2018).
The rationale behind integrating these two social factors into TPB is that social influence
has a stronger effect on EI in a spatially closed setting (Kacperczyk, 2013). Studies that
followed Kacperczyk (2013) also provide the interconnection between social influence and
institutions. To this end, the proposed extended model of TPB is advancing our
understanding of the contextual role of institutions and social influence in an integrated
framework in the Indian context. The study is based on the data from senior post-graduate
students from four top management institutes in India who had shown interest towards
entrepreneurship. The organisation of this study is as follows. The following section
provides theoretical background and rationale to integrate institutional infrastructure and
social influence whilst examining the entrepreneurial intention. Next, we discuss research
method and report the results. Finally, the study presents the discussion of findings in the
Indian context and discusses limitations and suggestion for future research.
framework of TPB that explores influence of peer effect, perceived gender discrimination and
institutional infrastructure on individual EI. In the proposed model, peer effect and entrepreneurial
motivation influence attitude towards entrepreneurship which further influences EI.
Entrepreneurial self-efficacy also influences EI. Regional institutional infrastructure moderates the
relationship of attitude towards entrepreneurship, entrepreneurial self-efficacy (ESE) and EI.
Finally, gender discrimination is used a grouping variable on each path of the model.
In earlier studies, social norm was used as one of the antecedents of EI in TPB model.
Subsequent empirical studies had found little explanatory effect of social norms on EI
(Esfandiar et al., 2017; Krueger et al., 2000; Shook and Bratianu, 2010). As a result, majority
of studies subsequently removed social norms from the explanatory model (Schlaegel and
JEEE Koenig, 2014). The existing literature has devoted less attention to the role of peers’
influence in impacting entrepreneurial career choices and decisions (Nanda and Sørensen,
2010). Instead of focusing on the wider phenomenon of social norms, the present study
specifically focuses on the role of peer effect on attitude towards entrepreneurship to start a
new venture.
The analysis of social interactions has emerged to be an important area of research in
different disciplines in management. The endogenous social or peer effects refer to the
propensity of an individual to behave and varies with the behaviour of the group (Manski,
1993). In different words, peer effect is described as the extent to which the attitudes, beliefs
and actions of an individual are affected by peers (Weber, 2012). It is the influence of the
group that belongs to same age group, share similar interests, belong to same university or
workplace or are a part of the same socio-cultural category that they represent (Nanda and
Sørensen, 2010). Given the fact that an individual spends a large amount of productive time
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at the workplace, co-workers are very likely to influence his or her attitude and behaviour
(Elfenbein et al., 2010).
The influence of peers might affect how an individual makes a decision for
entrepreneurial career. In such setting, the influence of the peers’ career experience helps an
individual to learn either about the nature of entrepreneurship or regarding the market
conditions to begin a potential entrepreneurial career. Similarly, family and friends or role
models are more likely to influence the psychological tendency towards an entrepreneurial
career (Carr and Sequeira, 2007). The peer effect on entrepreneurial attitude formation in the
context of different regions can be understood with the example of the rise of Silicon Valley.
Saxenian (1990) explained that individuals employed in different firms in Silicon Valley
frequently moved between jobs, alternating between spells of entrepreneurship and
employment, and gained new knowledge. At the same time, they exposed their colleagues to
new ideas, networks and start-up experiences, and consequently, Silicon Valley had higher
rates of entrepreneurship than other regions of the USA. Based on the above arguments, the
study assumes that peer effect influences an individual’s attitude towards entrepreneurship.
Thus, the hypothesis:
H1b. Peer effect is positively related to the development of attitude towards
entrepreneurship.
H3b. An effective institutional infrastructure positively affects the ESE and EIs to start
a new venture.
predominantly through male networks, and female entrepreneurs are discriminated against
on the basis of their merit and ability to perform the task (Bird and Brush, 2002). This study
assumes that perceived gender discrimination has a moderating effect on individuals who
intend to start a new business. Emerging countries like India still struggle to set up an
encouraging culture for women entrepreneurs (Jha et al., 2018).
3. Methodology
3.1 Sample
The data were collected in early 2017 through a questionnaire survey of nearly 400 final-
year post-graduate students of Business Administration at four Indian Institute of
Management campuses in India. The participants were selected based on the condition that
he/she registered to any of the entrepreneurship-related courses or activities during his/her
post-graduate program. The entrepreneurship courses offered at the Indian Institutes of
Management not only focus on the academic teaching of the subject, but also proactively
helps students start their ventures through associate incubation centres. Such choice was to
ensure that the samples demonstrated some degree of EI (Krueger et al., 2000; Shinnar et al.,
2012). A self-administered machine-readable questionnaire in a sealed envelope was
distributed to students at the end of their entrepreneurship course, and subsequently
collected from respondents through post and at site. Due instruction was provided to the
respondent with the questionnaire, and confidentiality was maintained to remove any
possible sample-related biases.
The data are cleaned to check the completeness of answers. The final sample for the
study consisted of 265 respondents, out of all surveyed respondents. The demographic
distribution of the sample is as follows: 70 per cent of respondents are male; 64 per cent
respondents were in the age group of 18-24 years; 34 per cent were in the age group of 25-34
years; and only 2 per cent of respondents were above 35 years. In the sample, 59 per cent of
the participants had industry experience between 6 and 12 months; 35 per cent had
experience between 24 and 36 months; and remaining members had more than 48 months of
working experience. Nearly 29.5 per cent of the participants had a background in family
business and had been associated with the business in the past.
of the same socio-cultural group, on an individual, that alters their behaviour and attitudes
(Weber, 2012). The measurement scale used here assessed the influence of peer group on
individual intention. The seven items (Krueger et al., 2000) on a five-point Likert scale
measured agreeableness towards the peer effect (Cronbach’s a = 0.866)
Attitude towards entrepreneurship was measured using a scale developed by Gundry
and Welsch (2001) and later modified by Kolvereid and Isaksen (2006). It was measured
by five statements on a five-point Likert scale whereby one’s positiveness towards
entrepreneurship was assessed through a scale ranging from “extremely positive” to
“extremely negative” (Cronbach’s a = 0.753).
ESE is an individual’s belief that one can successfully accomplish a goal (Carr and
Sequeira, 2007). The respondents were presented with 18 items that capture the level of ESE.
The scale captured the confidence level in a five-point Likert scale (very little confidence –
complete confidence) (Cronbach’s a = 0.754).
Institutional infrastructure is part of the composite construct that captured
the regional competitiveness and conduciveness of starting and managing a new
venture effectively and easily. Considering the complexity of capturing regional
competitiveness towards new venture creation, only institutional factors were
considered in the present study. The factors include the financial institutions, industry
bodies, investors, academic institutions and role of social media that determine the
success of new ventures (Spigel, 2017; Stam, 2015). The construct was redeveloped
similar to the seven pillars of entrepreneurial ecosystem discussed by Stam (2015):
government agencies, financial institutions, media, industry bodies, investors,
academic institutions, non-governmental bodies. The respondents were presented with
seven statements along with a five-point Likert scale to capture their agreeableness to
impact of the above factors on entrepreneurial venture (Cronbach’s a = 0.753). After
running the confirmatory factor analysis, Cronbach’s a value for five items was found
satisfactory (> 0.650) here for this study presented in Table II.
Perceived gender discrimination is an individual’s perception that he or she is treated
differently or unfairly because of his or her group membership (Sanchez and Brock,
1996; Herrbach and Mignonac, 2012). The measure for perceived gender discrimination
was borrowed and adapted from the work of Foley et al. (2005) and Herrbach and
Mignonac (2012). The respondents were presented with four statements relating to
gender discrimination in entrepreneurial career choice. With reference to each
statement, a five-point Likert scale (strongly agree – strongly disagree) was used
(Cronbach’s a = 0.667).
Theory of
Standard factor
Construct loadings CR planned
behaviour
Entrepreneurial intention
I intend to be in the process of developing a product or service 0.708
I intend to be in the process of putting together a start-up team 0.758
I intend to be looking for a building or equipment for the business 0.858 0.820
I intend to be in the process of writing a business plan 0.781
Entrepreneurial motivation
Entrepreneurial career gives me sense of achievement and pride 0.645
As an entrepreneur, I can satisfactorily provide employment to others 0.675
Amongst various options, I would live a self-directed life 0.819
Being an entrepreneur, I have more authority in business 0.767
Self-realisation is factor for choosing entrepreneurial career 0.768
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H1. H2.
Peer Effects H1b. 0.176 (0.037) 0.415(0.001) 0.269 (0.020)
Figure 1.
Analysis of structural
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model
Note: **Accepted at 10 % level
H1 AE !
! EI 0.415 0.001
H1a EM AE 0.735 0.001
H1b PE ! AE 0.176 0.037 Table IV.
H2 ESE ! EI 0.269 0.020 Standardised path
H3a Moderating role of II on AE EI 0.334 0.001 coefficients in the
! proposed model
H3b Moderating role of II on ESE ! EI —0.399 0.001
institutional infrastructure affects the relationship between ESE and intention to start a new
business (b = — 0.399, p < 0.001); thus, H3b is accepted.
To facilitate further interpretation, the interaction of moderating variable institutional
infrastructure, attitude towards entrepreneurship and EI are plotted as suggested by
Brambor et al. (2006). As shown in Figure 2, the attitude towards entrepreneurship has a
positive relationship with EI when the institutional infrastructure is high. However, the EI
diminishes with poor support from institutional infrastructure.
Further, the significant interaction of institutional infrastructure, ESE and EI are plotted
in Figure 3. As shown in the figure, ESE positively affects the EI, even at low institutional
2
1.9
Entrepreneurial Intentions
1.8
1.7
1.6
Figure 2.
1.5
The moderating
1.4 Low Institutional Infra Structure effect of institutional
1.3 infrastructure on
High Institutional Infra Structure
1.2 attitude towards
1.1 entrepreneurship and
1 EI
Low Attitudes toward Entrepreneurship High Attitudes toward Entrepreneurship
JEEE infrastructure support. We expected the same to be true in case of high institutional support.
However the result is inconclusive.
The analysis suggests that interaction of institutional infrastructure and EI (attitude and
ESE) is positive; hence, H3a and H3b are confirmed.
Figure 3.
The moderating
effect of institutional
infrastructure on ESE
and EIs
Low GD High GD
Hyp. Hypotheses b (p-value) b (p-value)
H1 AE – EI 0.262 (0.041) 0.578 (0.001)
H1a EM – AE 0.969 (0.001) 0.610 (0.001)
Table V. H1b PE – AE 0.022 (0.820) 0.404 (0.004)
Grouping effect of H2 ESE – EI 0.401 (0.011) 0.058 (0.769)
perceived GD in the H3a Moderating role of II on AE to EI 0.452 (0.001) 0.109 (0.356)
proposed model H3b Moderating role of II on ESE to EI —0.566 (0.001) —0.150 (0.454)
negative, –0.566 (p < 0.001), if gender discrimination is low, whilst the effect is Theory of
nonsignificant if gender discrimination is high. planned
behaviour
5. Discussion
The objective of the study is three-fold: one, we try to explain the moderating effect of
institutional infrastructure on individual EI. Two, the classic TPB (attitudes, subjective
norm and PBC) model is revised and extended considering the theoretical rationale to
include entrepreneurial motivation and the peer effect on EI. Third, we looked at the entire
model with respect to the moderating (grouping effect) effect of gender discrimination. The
study confirms the role of perceived gender discrimination towards a negative intention in
an Indian context. The detailed discussion of the result follows:
The results establish the positive relationship between individual attitudes towards EI.
This relationship is also established in previous research with varying strength ranging
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from 30 to 45 per cent typical variance (Kautonen et al., 2015; Liñán and Chen, 2009; Van
Gelderen et al., 2008). The positive and significant relationship between these two variables
in the present data reconfirms the relationship in the Indian context, with 41 per cent
variance. Accordingly, a positive attitude towards the inclination to act indicates positive
influence towards EI. Further, attitude towards entrepreneurship is also influenced by two
other independent variables: entrepreneurial motivation and peer effect. Entrepreneurial
motivation was found to have positive influence on individual attitude in the present study
context. The results are consistent with other studies that demonstrated the similar result
(Collins et al., 2004; Solesvik, 2013). The results also reflect that individuals are attracted to
different types of careers other than entrepreneurship because of varying motivation factors
(Carsrud and Brännback, 2011; Hessels et al., 2008). This implies that individuals choose
hybrid entrepreneurial careers as they can start a new venture and work in a company
simultaneously (Folta et al., 2010).
The findings also suggest that peer effect positively influences individual’s attitude
towards EI (H1b). We know higher the peer effect, stronger will be the intention to start a
new business. An individual’s attitude to start a new venture is largely influenced by
interaction with friends, workplace colleagues, industry friends, role models, parents
(Anggadwita et al., 2017). For example, working alongside other employees who have prior
entrepreneurial experience enables an individual to learn critical business skills and become
more confident to start an entrepreneurial journey (Nanda and Sørensen, 2010) than
interacting with peers. The other possible reason of positive peer effect is that universities or
management institutes are an important setting for learning and skill development that may
3.5
3
Figure 4.
The moderating
2.5 effect of gender
2 discrimination on
1.5
peer effect and
attitude towards
1 entrepreneurship
Low Peer Effects High Peer Effects
JEEE spark entrepreneurial activity in groups to later start new ventures (Mustafa et al., 2016).
Individuals find entrepreneurship a more realistic career choice because they find their peers
in their social network as role models.
Furthermore, the results find positive association between ESE and EI (H2). With
increase in one’s ability, an individual will have stronger intention to start a new venture
and be ready to face all the challenges or barriers that need to be overcome to succeed in the
business. Our results are again consistent with previous studies that support that
individuals rely on their abilities to start an entrepreneurial career in an emerging country
(Liñán and Chen, 2009; Shook and Bratianu, 2010).
Our results suggest institutional infrastructure positively moderates the relationship
between attitude towards entrepreneurship and EI (H3a). However, the moderating effect on
ESE and EI is non-conclusive (H3b). The positive moderating effect of institutional
infrastructure implies that the stronger institutional support system strengthens individual
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attitudes and intention to start a new business in the familiar region. The interaction
amongst entrepreneurial actors, organisations, institutions and entrepreneurial processes
increases performance and success of entrepreneurial ventures in regional entrepreneurial
environment (Mason and Brown, 2014). Thus, individuals are influenced by evolving and
encouraging institutional support in India and decide to choose entrepreneurial career in
future. Over the last few decades, India has emerged as a hotbed for the growth of
entrepreneurial start-ups in different sectors of business. Both central and state
governments are supporting entrepreneurship and start-ups by initiating a number of
institutional reforms, creation of special start-up financing hubs and incubations centres
(Srivastava and Misra, 2017). As a result, India has emerged as an entrepreneurial hub and
has influenced many aspiring entrepreneurs in the country (e.g. 11 unicorns have emerged
between year 2000 and 2015).
On the contrary, the non-conclusive effect of institutional infrastructure on ESE and EI
implies that individuals have self-efficacy to begin business, but institutional infrastructure
is poorly supportive in their efforts. Individuals attribute higher level of competition and
more significant barriers to in emerging economies such as India (Bosma, 2013). Apart from
that, the negative perception of local institutional infrastructure owing to high failure of new
ventures and high perceived market risks might constrain an individual’s intention to start
an entrepreneurial career in emerging economies (Kibler, 2013). Thus, despite poor role of
institutional infrastructure, an individual’s self-efficacy does not reduce, and he/she keeps
working to achieve success.
institutional infrastructure and EI, advising intervention to reduce such social factor for
improvement in venture start-up in emerging countries. Finally, the moderating effect of
institutional infrastructure on ESE and EI was found non-conclusive. This relationship is
not influenced by gender discrimination. It implies that this relationship does not have any
bearing at regional level. The social negative effect of gender discrimination is so strong that
an institutional support system is unable to attract and influence individuals to choose an
entrepreneurial career.
5.2 Implications
Our study has theoretical and practical implications to start a challenging entrepreneurial
career in emerging economies. On a theoretical level, the study adds to the understanding of
drivers or antecedents to EI, especially in an emerging economy context. Previous studies
have examined EI using TPB in developed countries. In contrast, this study finds the
usefulness of TPB in the emerging countries such as India. In addition, the study is
contributing to the existing models by empirically proving the role of peer group effect and
institutional infrastructure in emerging economies where these factors are critical to choose
an entrepreneurial career. Emerging economies are characterised by weak institutions and
inadequate access to resources to start and sustain any entrepreneurial activity (Mustafa
et al., 2016). These characteristics may ultimately pose as barriers to individuals to choose
an entrepreneurial career. Further, the study also provides additional insights about existing
influence of perceived gender discrimination on starting a new venture in emerging
economies.
Lastly, several implications for academic institutions, entrepreneurial ecosystem
stakeholders and policy makers in emerging economies arise from the results from our
study. The results strongly affirm that different peer groups influence individuals to go for
entrepreneurial career because peers share their relevant experience, provide potential
information and encourage their colleagues in decision-making. In particular, academic
institutions, universities and incubation hubs can consider promoting a peer-group culture
that strengthens an individual’s EI in emerging economies. At the same time, policy makers
and stakeholders should focus to build an encouraging entrepreneurial ecosystem with
adequate institutional infrastructure, easy way of starting and doing business and a spirit of
entrepreneurship culture.
Note
1. www.dell.com/learn/us/en/vn/corporate ~ ~
secure en/documents ~
2015-gwel-scorecard-executive-
summary.pdf (accessed 7 July 2018).
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Chi-square thresholds
differences
90% confidence 6,212.07 2,014 Any chi-square more than the
Difference 0.100 threshold will be variant for a
95% confidence 6,213.20 2,014 path by path analysis. This is
Difference 0.050 only applicable to models
99% confidence 6,216.00 2,014 where you are changing one Table AI.
Difference 0.010 path at a time (i.e. have a Group difference
difference of one df) statistics
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