THE IMPACT OF PSYCHOLOGICAL CAPITAL ON ENTREPRENEURIAL INTENTION

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

Tran Thi Hoang Dung

THE IMPACT OF PSYCHOLOGICAL
CAPITAL ON ENTREPRENEURIAL
INTENTION

MASTER OF BUSINESS (Honours)

Ho Chi Minh City – Year 2014


UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

Tran Thi Hoang Dung

THE IMPACT OF PSYCHOLOGICAL
CAPITAL ON ENTREPRENEURIAL
INTENTION
ID: 22120008

MASTER OF BUSINESS (Honours)
SUPERVISOR: Dr. NGUYEN THI MAI TRANG

Ho Chi Minh City – Year 2014

ACKNOWLEDGEMENT
I would like to express my great gratitude to my supervisor, Dr. Nguyen Thi Mai Trang
for her kindness, her professional guidance and encouragement as well as her valuable
comments and helpful advice through my thesis.

I am sincerely thankful to Professor Nguyen Dong Phong, Professor Nguyen Dinh Tho,
Dr. Tran Ha Minh Quan, Dr. Nguyen Phong Nguye and Dr. Tran Phuong Thao as proposal
examination committee. Their valuable comments and constructive suggestions contributed
significantly for me to complete this thesis with best results.

My special gratitude is extended to all instructors and staffs of School International
Scholl of Business – University of Economics Ho Chi Minh City which give us the right to
make the research for the thesis course so that we can have a chance to apply their theories to
practice business.

Finally, the deepest and most sincere gratitude go to my beloved family, my closest
friends for the boundless support, abundant love and encouragement throughout my period of
study. Therefore, I dedicate this work as a gift to them all.


ABSTRACT
This research explores factors related to psychological capital affecting on entrepreneurial
intention of undergraduate students through a survey of some 400 economics students in three
universities: University of Economics Ho Chi Minh City, University of Economics and Law,
International University – Vietnam National University Ho Chi Minh City. In additions, the
study also provides the impact of proactive coping factor on the relationship between
determinants of psychological capital and entrepreneurial intention. The collected data was
analyzed and evaluated by structural equation modeling (SEM) method through Analysis of
Moment Structures (AMOS software) at the sample size of 327. This study finds out three

independent variables (Self – efficacy, Hope and Resilience) have significant impact on
dependent variable: Entrepreneurial intention. Optimism is not positive related to
entrepreneurial intention.
Additionally, moderating variable does not have control the relationship between
independent variables (Self – efficacy, Optimism, Hope and Resilience) and dependent variable
(Entrepreneurial intention). It means that although one people have proactive coping high or
low, it is not vital. This study contributes for development organizations as well as
businessman. Students can indentify factors effecting on self – employed intention. Therefore,
students can take part in more extracurricular activities, subjects and skills to help them to
achieve the dream of becoming business owners.
Generally, the present study suggests important guideline for government, universities
and students as well as evaluating the strength of measurement scale, the sampling method as
well as the fitness between the research model and data. At the end, results in the valuable
directions for further researches in future and some limitations of this research.

Key words: psychological capital, proactive coping, entrepreneurial intention.


TABLE OF CONTENTS
ACKNOWLEDGEMENT
ABSTRACT
TABLE OF CONTENTS
LIST OF FIGURES
LIST OF TABLES
CHAPTER 1: INTRODUCTION ............................................................................................. 1
1.1 Research Background .................................................................................................... 1
1.2 Research Objectives ...................................................................................................... 7
1.3 Research Scope .............................................................................................................. 8
1.4 Research Significant ...................................................................................................... 8
1.5 Research Structure ......................................................................................................... 8

CHAPTER 2: LITERATURE REVIEW ............................................................................... 10
2.1 Entrepreneurship .......................................................................................................... 10
2.2 Entrepreneurial Intention ............................................................................................. 11
2.3 Psychological Capital .................................................................................................. 13
2.3.1 Self – efficacy ...................................................................................................... 14
2.3.2 Optimism .............................................................................................................. 16
2.3.3 Hope ..................................................................................................................... 17
2.3.4 Resiliency ............................................................................................................. 18
2.4 Proactive coping .......................................................................................................... 19
2.5 The research model and hypotheses ............................................................................ 20
CHAPTER 3: RESEARCH METHODOLOGY................................................................... 23
3.1 Research process.......................................................................................................... 23
3.2 Measurement scale ...................................................................................................... 25
3.3 Questionnaire design ................................................................................................... 27
3.3.1 Preliminary qualitative research ........................................................................... 28


3.3.2 Quantitative research ............................................................................................ 31
3.4 Data collection method ................................................................................................ 31
3.5 Sampling design .......................................................................................................... 31
3.6 Data analysis method ................................................................................................... 31
CHAPTER 4: DATA ANALYSIS .......................................................................................... 34
4.1 Descriptive statistic...................................................................................................... 34
4.2 Reliability analysis ...................................................................................................... 35
4.3 Exploratory Factor Analysis ........................................................................................ 38
4.4 Evaluate the measurement by CFA ............................................................................. 40
4.5 SEM Testing and Hypothesis Testing ......................................................................... 45
4.5.1 SEM Testing......................................................................................................... 45
4.5.2 Hypotheses Testing .............................................................................................. 47
4.6 Bootstrap Method ........................................................................................................ 48

4.7 Results of Multiple Group Analysis ............................................................................ 48
CHAPTER 5: CONCLUSION, IMPLICATIONS, LIMITATIONS .................................... 3
5.1 Conclusion ................................................................................................................... 53
5.2 Managerial implementations ....................................................................................... 52
5.2.1 Self – efficacy ...................................................................................................... 54
5.2.2 Hope ..................................................................................................................... 57
5.2.3 Resiliency ............................................................................................................. 59
5.3 Limitations ................................................................................................................... 60
REFERENCES ........................................................................................................................... 62
APPENDICES ............................................................................................................................ 68


LIST OF TABLES
Table 3.1 Measurement scale ..................................................................................................... 26
Table 3.2 Guidelines for in-depth interview respondents’ information ..................................... 29
Table 4.1 Sample characteristics ................................................................................................ 35
Table 4.2 Reliability Test Results .............................................................................................. 37
Table 4.3 KMO and Bartlett's Test ............................................................................................ 38
Table 4.4 Rotated Component Matrix ........................................................................................ 39
Table 4.5 Standardized Regression Weights .............................................................................. 42
Table 4.6 Measure Correlations ................................................................................................. 44
Table 4.7 Regression Weights .................................................................................................... 47
Table 4.8 The results for Bootstrap estimation .......................................................................... 48
Table 4.9 The SEM results of variant and partial invariant model ........................................... 49
Table 4.10 The difference between fitness indices of variant model and partial invariant model
in term of proactive coping ........................................................................................................ 50
Table 4.11 Summary of hypotheses testing result ..................................................................... 52


LIST OF FIGURES

Figure 1.1: The number of new enterprises was registered period 1991-1999 and from 20002013 .............................................................................................................................................. 3
Figure 1.2: Business Registration Status ...................................................................................... 4
Figure 2.1: Research Model ....................................................................................................... 21
Figure 3.1: Research procedure .................................................................................................. 24
Figure 4.1: CFA for Entrepreneurial intention ........................................................................... 41
Figure 4.2: Structural.................................................................................................................. 46


CHAPTER 1: INTRODUCTION
1.1 Research background
In today’s world, the development of new businesses plays an important role in
stimulating the economy for every nation. Furthermore, there has been a significant increase
in the new generation of young businessmen. Accordingly, entrepreneurship has become
crucial to every country because the development of new companies will not only help
reduce unemployment rate, but enhance the economic prosperity as well. A great number of
successful young companies are a major contribution for a country’s total GDP and
economic growth; therefore, students should be encouraged and trained to become
successful entrepreneurs in the near future. Thus, universities need to add policies in
education programs to inspire students in pursuing these goals. For instance, nowadays, the
Global Business Challenge of Charted Institute of Management Accountants (CIMA) was
formed in accordance with the current economic changes. The CIMA Global Business
Challenge is an international business competition for undergraduates around the world,
designed to bring out the best in young business leaders of tomorrow. The CIMA Global
Business Challenge has grown year after year; from 8 participating regions in 2009 to 24 in
2014. This program brings many advantages for young students and provides them with
guidance and opportunities to become self-employed.
In Vietnam, it seems that universities and educational intitutions tend to organize
activities regarding entrepreneurial objectives for students. Thus, in order to encourage the
economic benefits of a national associated with the formation of new companies,
governments should encourage more students to consider self-employed as well as to

become entrepreneurs (Thanh Thúy, 2014). However, Vietnam has transited from planned
economies to market economies. That may become a leverage to help enterprises achieve
high performance, especially the private ones. Thus, it is necessary for supporting the
development of those firms in the recent trend. With the aim of upgrading the firms’
capabilities as well as increasing brand equity for each organization, entrepreneurial
intentions have recently become one of the important factors. Many organizations in
Vietnam are cooperating with universities to support students in providing creative ideas in

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business through contests such as: Dynamic, SIFE, CFA, IRC, Startup Wheel etc.
Furthermore, Vietnam also has organizations which support students harboring the dream of
becoming entrepreneur. For instance, Business Start Up Support Center (BSSC) was
established in 2000 with wonderful mission and vision. Accordingly, the mission is
proposed that BSSC will help young people catch their business’s dreams. In addition, the
vision is guided that BSSC becomes the crossroads to transfer all the experiences,
knowledge and useful resources from individuals and organizations within and outside the
nation, in order to create a sustainable platform for the young entrepreneurs in Vietnam.
1.2 Research problem
A significant growth of unemployment rate in Vietnam has been observed in recent
years. For example, in quarter IV (2013), there were 900,000 unemployed people, 72,000 of
whom were graduated students (Hồng Hạnh, 2013); hence, this might become a serious
problem that people have to concern for the development of economies. In a different
manner, the increase of unemployed people year by year can lead to an adverse trend. In this
situation, these graduates can choose to be self-employed. Thus, students can set up
businesses by themselves that can help unemployment rate reduce partially. However, not
all people can become entrepreneurs because they must have the passion and me et
necessary and sufficient conditions. Therefore, each student and university needs to
understand deeply about the factors that affect entrepreneurial intentions, so that universities

can design suitable policies as well as guidelines for thier students. However, the proportion
of students choosing to be self-employed immediately after graduating is small (Hồng
Hạnh, 2013). In that research, it is also identified that many young people encounter with
the following barriers to become self-employed such as poor confidence, limited
knowledge, etc. It deals with the lack of primary factors. Those students can be potential
entrepreneurs but they are not aware of the career options that are given to them. As
becoming the entrepreneur can be one of the options; their intention of becoming selfemployed had prompted researchers to investigate particularly on the influence of
entrepreneurial characteristics and entrepreneurial intention among undergraduates towards
entrepreneurial activities.

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According to data of National Business Registration Portal, the number of new
companies that are established in Vietnam increases year after year. Many new enterprises
were founded in the year 2012 and 2013, the number of which was 69,800 and 76,900
respectively. In general, the number of enterprises was growing between 2000 and 2013
(see in Figure 1.1). Additionally, In January 2014, there were 6,866 new enterprises in
comparison to the number of newly established enterprises increased by 15.6% in December
2013 (see in Figure 1.2). The number of new companies has fluctuated in different periods
of time. Hence, self-employed is an integral part of a nation. There are more and more new
enterprises that help national firms reduce unemployment rate in the current time. Thus, this
is also a strong point for economic development. Moreover, senior students also should
focus on factors to become a successful entrepreneur. This situation may reduce
unemployment rate in Vietnam and encourage students to seek goals in their lives.
Therefore, entrepreneur intention for students’s future career path is considered as an
important role in the economic development of a nation.

Figure 1.1: The number of new enterprises was registered period 1991-1999 and
from 2000-2013

(Source: National Business Registration Portal, 2013)

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New enterprises
Registered capital

gure 1.2: Business Registration Status

(Source: National Business Registration Portal, 2014)

Figure 1.2: Business Registration Status
(Source: National Business Registration Portal, 2014)
The number of new enterprises is increasing substantially monthly, year by year;
therefore, the study of entrepreneurship plays a vital role in economy. That is a huge
contribution for such development. Therefore, studying entrepreneurial intention is also
necessary. For instance, in foreign countries, many of previous studies have focused on
various kinds of factors affecting on entrepreneurial intention. As Harun (2012) has stated
that, personality traits and environmental factors have effects on entrepreneurial intentions.
On the other hand, researchers seek to make several conceptual and empirical
contributions. This research looks into the following factors which have impacts on
entrepreneurial intention of students in Germany: attitude toward the behavior, subjective
norm, perceive behavior control, perceived desirability and perceived feasibility (Marina et
al., 2012).
Regarding this topic, in the USA, Mark et al. (2009).believe that it is important to
understand students’ issues across cultures. There are six factors that have influences on
self-employed in this study such as: culture/country, personal entrepreneurial exposure,
expected family support, entrepreneurial disposition, perceptions of motives and perception

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of barriers. These authors looked at various factors of impacting on entrepreneurial
intention.
Furthermore, higher education also impacts on entrepreneurial intention of
undergraduate students. According to the Wu & Wu (2008), there are three important
implications for higher education institutions and public policy arises from this study. First,
TPB model of Ajzen (1991) can also be used to predict entrepreneurial intentions of
students. Second, educational background has impact on entrepreneurial intentions.
Attitudinal factors, perceived behavioral control are different among students with different
educational backgrounds. Third, entrepreneurship education should pay attention to
entrepreneurial skills as well as inspiring students’ interest in entrepreneurship. Besides
education factor, other authors also have looked at different factors as risk taking tendency,
focus of control, need for achievement, autonomy of occupation, occupational challenges,
security in occupation and environment for starting business (Uddin et al., 2012).
In addition, previous research indicated that intentions have two dimensions: at first,
intentions have abilities to predict individual behaviors (Ajzen, 1991). Secondly, intentions
affect organizational outcomes. Previous contributions show that there are many factors
affecting entrepreneurial intention. According to the Theory of Planned Behavior, it can
predict student’s entrepreneurial intention. All factors impact on behavioral intention
indirectly through attitude, subjective norm, and perceive behavioral control (Ajzen, 1991)
are as antecedence of entrepreneurial intention. According to Dirzyte (2013), who
researched the trends on psychological capital in science and study intuitions in United
States of America; The paper gives some evidence on how psychological capital
components (self-efficacy, hope, optimism, psychological resilience) have been determined
to meet the criteria of being state-like/open to development, being theory/research-based,
having valid measurement, and having performance impact. Further, the relationship
between psychological capital and outcomes of work well-being and work life balance
among Chinese employees is also studied in the research of Siu (2013).

Although there are lots of research have been done, yet psychological capital factors
influencing on entrepreneurial intention of students have not much been studied. In this

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research, the author examines the impact of Psychological capital on entrepreneurial
intention among students. Psychological capital includes different components. Most
previous studies also mentioned on this construct. Previous research has consistently linked
psychological capital to workplace outcomes including employee attitudes, behaviors, and
performance. For example, Hodges (2010) investigated about psychological factor impacts
on performance, engagement and the contagion effect.
On the other hand, besides above factors, there are also various types of components
affected on entrepreneurial intention. Thus, capital which are just as vital to consider
including human, social, etc. The primary focus on this paper is on psychological capital
which is an important and popular subject for study in management. The author contends
that positive psychological capital performed by an entrepreneur. Psychological capital is
defined as a positive psychological of an individual in the process of developing and is
characterized by: having confidence (self-efficacy) to make on and out in the necessary
effort to succeed at challenging tasks; making a positive attribution (optimism) about
succeeding now and in the future, persevering toward goals and, when necessary,
redirecting paths to goals (hope) in order to succeed; and when beset by problems and
adversity, sustaining and bounding back and even beyond (resiliency) to attain success
(Luthans et al.,2007). Another factor which the author applied in this research is proactive
coping. It means that coping with a problem or situation in a proactive manner, as in doing
something constructive to deal with it rather than just worrying about it. Consequently,
universities in Vietnam need to understand clearly about the factors affecting student’s
entrepreneurial intentions in order to deliver an effective education program.
In Vietnam, some researchers have studied about this field but the number of scholars
are still limited. For example, Hoàng Thị Phương Thảo & Bùi Thị Thanh Chi (2012)

conducted research about six factors (push, pull, environment, initial capital) that affect
entrepreneurial intention of MBA female students. These four factors play a vital role for
MBA female students to become entrepreneurs. There are many factors affecting on selfemployed intention but it depends on individual and context; therefore, they should be
changed suitably. Moreover, Bùi Huỳnh Tuấn Duy, Lê Thị Lin, Đào Thị Xuân Duyên &

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Nguyễn Thu Hiền (2011) also investigated personal characteristics impacting on
entrepreneurial intention of students.
Besides, in Vietnam, another research is related to psychological capital, quality of
working life, and quality of life (Nguyen & Nguyen, 2012). However, that study examines
the roles of psychological capital in job performance and quality of work life of marketers
in a transitioning market in Vietnam. It also investigates the impacts of marketers’ quality of
work life on their job performances and quality of life. Researching in the field of
psychological capital as well as the quality of working life in the different industry is in
shortage status. Furthermore, the newest research related to job performance of employees
in banking industry in Vietnam, specify two factors that belong to psychological capital and
quality of working life (Nguyễn Thi Ngoan, 2010).
The mentioned above studies attempt to investigate potential antecedents that have
high power to explain entrepreneurial intention, this study employs the concept of
psychological capital. The impact of psychological capital on entrepreneurial intention has
received little attention from research scholar.
1.3 Research objectives
The overall objective of this study is to examine the impact of positive psychological
capital on entrepreneurial intention. Specifically, it investigates:
1. The relationship between self-efficacy with entrepreneurial intention
2. The relationship between optimism with entrepreneurial intention
3. The relationship between hope with entrepreneurial intention
4.

The relationship between resiliency with entrepreneurial intention. Additionally, it
also examines the moderating role of proactive coping in the relationship between :
5a. Self – efficacy and entrepreneurial intention
5b. Optimism and entrepreneurial intention
5c. Hope and entrepreneurial intention
5d. Resilience and entrepreneurial intention

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1.4 Research scope
Third year students in economics business major of three universities (University of
Economics Ho Chi Minh City, University of Economics and Law, International University –
Vietnam National University HCMC) will be the objects of this research because these
above students gain more competency to become self-employed than others.
1.5 Research significance
According to the findings in the end of this research, the author hopes to provide a
general outlook about student’s entrepreneurial intention. Based on those, universities can
understand roles of self-efficacy, optimism, hope, resilience on an individual’s intention on
engaging in entrepreneurial intention; hence, universities and colleges may define critical
strategies or specific activities to help students improve those factors effectively. Further,
campaigns can be delivered to encourage students to make right occupational decisions in
the future.
In addition, this study is significant for the undergraduates on their future career path.
Accordingly, by identifying their strengths and weaknesses in becoming entrepreneurial
intention, students will be able to recognize their personal characteristics and attitudes that
will in turn help in figuring out their intention towards self-employed.
On the other hand, this research is also vital for policy implementation on future
development of entrepreneurial programs for undergraduates. By having a good

understanding about factors that have influences on entrepreneurial intention among
students; the government can easily have policies to inspire students for entrepreneur
programs, which can also increase new business venturing rates.
1.6 Research Structure
This thesis includes five chapters:
Chapter 1: Introduction
This chapter presents the research background of this study as well as the research
objectives, research methodology, scopes and research significance.
Chapter 2: Literature Review and Hypotheses

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This chapter reviews the literature on: psychological capital, entrepreneurial intention
and proactive coping. Besides, the definition and the literature review of the above
constructs also synthesized: self- efficacy, hope, optimism, and resiliency. This chapter also
describes a research model and proposed hypotheses.
Chapter 3: Research Methodology
Based on the research objectives, scopes and the research methodology mentioned in
chapter, this chapter introduces research design, research methodology and the processes of
conducting the research to test the hypotheses.
Chapter 4: Research Results
This chapter is designed to present the finding of data analysis. Accordingly, the result
hypotheses are tested.
Chapter 5: Conclusions, Implications and Limitations
The last chapter discusses main conclusions and implications based on the results of
the previous chapters. Lastly, the limitations are identified to recommend for further
research in the future.

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CHAPTER 2: LITERATURE REVIEWS
This chapter reviews and discusses about the theories of entrepreneurship,
entrepreneurial intention, self – efficacy, optimism, hope, resilience and proactive coping.
Accordingly, the proposed theories are related with each of the factors in the research. In
addition, the research model is also proposed. Simultaneously, its constructs and
relationship hypothesized among these constructs are also discussed that includes positive
impact of psychological capital on entrepreneurial intention based on present theoretical
foundations. It also points out the moderating effect of relationships between each
component of psychological capital and entrepreneurial intention.
2.1 Entrepreneurship
An entrepreneur is a person who undertakes the creation of an enterprise or business
that has the chance of profit (or success). Entrepreneurship is the art of turning ideas into a
business (Barringer & Ireland, 2010). In a different manner, entrepreneurship came from
French word “Entrepreneur”. It includes two parts in this word: “entre” and “preneur”
which can be translated as “to take between”. Besides, entrepreneurs are also known as selfemployed people. The theory of entrepreneurship is developed together with issues like as
defining opportunities, mobilizing resources and organizing the institution (Shane &
Venkataraman, 2000). Entrepreneurship is a scholarly field which seeks to understand how
opportunities can bring into the existence of ‘future’ goods and services; how they are
discovered, created and exploited; by whom; and with what consequences.
Additionally, there are sum of various definitions of entrepreneurs in each field."
Entrepreneurs face extreme situations because their work involves disruptive change. They
create new markets, disturb established markets, introduce new processes, and form new
organizations” (Baum, et al., 2007, p8). For examples, an economist defines an entrepreneur
as the one who create the combination of resources to make them valuable. While to a
psychologist, entrepreneur is typically driven by certain forces such as needs to obtain or
attain something, as well as to experiment and to accomplish targeted goal. To businessmen,
an entrepreneur may be a threat, an aggressive competitor but may also be an ally, a source

10


of supply, a customer, or someone who creates wealth for others as well as finds better ways
to utilize resources, reduce waste, and provide jobs to others (Hisrich, 2005).
Further, nothing is born to grow immediately. Some people firmly believed that
entrepreneurs are born; they are not needed to be made. Moreover, many previous studies
proved that entrepreneurs can be made and are not hereditary (Barringer & Ireland, 2010).
Anyone who has the potential to become self-employed, especially for people having
undergone educational process in universities, will have the traits of becoming an
entrepreneur (Gelard & Saled, 2011; Ooi et al., 2011).
Entrepreneurship is like a transportation means that helps increase economic
efficiencies. The promotion of entrepreneurship is necessary for economic developments
and new employment opportunities (Henry et al., 2003). Economic benefits from
entrepreneurship include the creation of new jobs, productivity improvements and increased
regional growth rates. Entrepreneurs are more likely to be alert to opportunities and willing
to take risks (Schneider et al., 2007).
Entrepreneurship allows for an understanding of the factors that affect entrepreneurial
activity and studies on the topic have grown significantly in the past decade (Turan & Kara,
2007). Entrepreneurship can be seen as a result of a team of individuals that have a
willingness to expand their organizational efforts (Terjesen, 2008). Thus, entrepreneurship
is particularly important for enhancing a healthy economy and it is also a standard for
measuring achievement or success.
2.2 Entrepreneurial Intention
The theory of planned behavior is an extension of the theory of reasoned action
(Ajzen and Fishbein, 1980). The theory of reasoned action, which has its roots in social
psychology, is ‘‘based on the assumption that human beings are usually quite rational and
make systematic use of the information available to them...(and) that people consider the
implications

of their actions before they decide to engage or not engage in a given

behavior’’ (Ajzen and Fishbein,1980; p. 5). The theory of planned behavior has enormous
contribution compared with the theory of reasoned action because the theory of planned
behavior may control over behaviors while the theory of planned behavior does not.

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The theory of planned behavior suggests that the key to explaining behavior is
intentions. Intentions are shaped by (1) attitudes toward the behavior, (2) social norms, and
(3) perceived control over the behavior. Beliefs are the ultimate source of those attitudes,
norms, and perceptions. According to the theory, a relatively small number of concepts
predict and explain human behavior (Carpenter & Reimers, 2005).
Intention to act is believed as a central to understand the behaviors in which people
engage. While actual behavior may differ from original behavior, the intention to act toward
something in a certain manner is particularly planned behavior (Krueger, Reilly & Carsrud,
2000). Individual entrepreneurial intent has proven to be an important and continuing
construct in entrepreneurship theory and research (Carr & Sequeira, 2007). All new firms
are set up by individuals, or groups outside the formal context of existing firms, begin with
some degree of planned behavior on the part of those individuals (Shook, Priem, & McGee,
2003).
Further, entrepreneurial intention is defined as willingness of individuals to perform
entrepreneurial behavior and bring out actions to set up a new business (Dell, 2008). An
individual may have potential to be entrepreneur but do not make any transition into
entrepreneurship, unless they have such intentions. Therefore, understanding intentions can
help researchers and theoreticians understand all aspects of anything relating to such
phenomena. These include: the sources of ideas for a business venture, and how the venture
can become a reality. Previous research has investigated the different economic and
psychological capital of individual to lead self-employment (Douglas & Shepherd, 2002).

Additionally, Bird (1988) proposed that an entrepreneurial intention refers to
individual’s state of mind, so that could directly guide actions to establish new business, as
well as creating new values in existing firms. Intentional process often runs based on an
entrepreneur’s personal needs, values, habits and beliefs.
According to previous study, the internal and psychological aspects of human being
might influence an entrepreneur such as personal traits, demographics, theory of planned
behavior, self-efficacy and perceived desirability of students to become a self-employment
(Ajzen, 2002; Antoncic, 2009).

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Entrepreneur or top management team of an entrepreneurial venture is demonstrated
by positive psychological capital. Furthermore, while financial, human and social capital
resources can vary in degrees among top management, all members must demonstrate high
level of positive psychological capital to ensure entrepreneurial intention (Envick, 2005). In
that perspective, entrepreneurial intention could be described as personal psychological
condition and cognition to start up new business (Shook et.al , 2003).
2.3 Psychological Capital
PsyCap is the abbreviation for Psychological Capital. It is a creative and flexible
adaptive mechanism of entrepreneurs. Several related concepts that describe the relationship
between PsyCap and entrepreneurs can be found in the literature on positive organizational
behavior such as psychological ownership (Avey et al., 2009), PsyCap (Luthans et al.,
2008). Hence, the four components of hope, confidence, resilience and optimism are tested
in order to include the concept of psychological capital for an entrepreneur. These
components can be defined as:
An individual’s positive pyschological state of development is characterized by: (1)
having confidence (self-efficacy) to take on and put in the necessary effort in order to
succeed in challenging tasks; (2) making a positive attribution (optimism) about succeeding
now and in the future; (3) perserving towards goals and, when necessary, redirecting paths

to goals (hope) in order to succeed; and (4) when beset by problems and adversity,
sustaining and bouncing back and even beyond (resiliency) to attain success. (Luthans,
Youssef, & Avolio, 2007).
As mentioned above, the linkage of hope, self-efficacy, optimism and resiliency has
strong affection on entrepreneurial intention. PsyCap is a new construct for gaining wide
acceptance in Organization Behavior. This study is among the first method to test this
construct influencing on entrepreneurship. PsyCap is based on Positive Organizational
Behavior (POB) and positive psychology, which focus on strengths and justify from “What
can go wrong with people” to “What can go right for people”. PsyCap recognizes moving
from “who you are” or actual self to “who you are becoming” or possible self (Avolio &

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Luthans, 2006). Thus, if PsyCap is found to be related to entrepreneurship; hence, then
training in PsyCap in universities could bring benefits for future entrepreneurs.
2.3.1 Self-efficacy
Self-efficacy (confidence) refers to a positive belief; it could be and is defined for the
workplace as the employee's conviction about his or her abilities to mobilize the motivation,
cognitive resources or courses of action needed to successfully execute a specific task
within a given context. Bandura (2000) claimed that efficacy beliefs affect self-motivation
though goals and aspiration. This component has already been supported by a research of
Armstrong et al. (2003, p. 34): "The world is full of people who are trying to purchase self
confidence, manufacture it, or simply posture it; but you can not fake confidence, you have
to earn it, and they only way to do that is work".
In addition, the concept of self-efficacy in entrepreneurial research is introducing a
social learning theory perspective for entrepreneurial behaviors. Besides, model of
entrepreneurial intentions of Bird (1988) includes self-efficacy is expanded. They made a
conceptual case for entrepreneurial self-efficacy. Self-efficacy influences on emergent
entrepreneurs who are trained and are developed for venture creation and for the individual

level, entrepreneurial intention is the single best predictor of subsequent entrepreneurial
behaviour (Krueger et al., 2000) and for employment choice intentions (Segal et al., 2005).
In the first of two previous studies, these authors found that entrepreneurial selfefficacy was positively related to the intention to start becoming a self-employ (Chen et al.,
1998). Furthermore, from the results of a study by Markman et al. (2002) on patent
inventors proved that inventors who started their own businesses have a vitally higher selfefficacy than other individuals. For this reason, individuals with higher self – efficacy are
likely to be entrepreneurs. An individual of being an entrepreneur has the belief for
performing entrepreneurship roles and tasks successfully. High self-efficacy individuals
evaluate the business environment as same as low self-efficacy individuals perceive the
same environment as full of obstacles.
Efficacy beliefs affect how individuals perceive and interpret events. Those with low
efficacy are easily convinced that efforts to address difficult challenges are futile so are

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more likely to experience negative stress symptoms, while those with higher levels of
efficacy are more likely to perceive challenges as surmountable given sufficient
competencies and effort (Bandura, 2008). From that, self-efficacy belief of the individual is
perceived to execute the required activities for the entrepreneurship, positively affects the
entrepreneurial intention.
Besides, self-efficacy is known as the expectation of success for the reason based on
individual’s activities. Self-efficacy is defined as “the employee’s conviction or confidence
about his or her abilities to mobilize the motivation, cognitive resources or courses of action
needed to successfully execute a specific task within a given context” (is cited in James,
2007). Based on that theory, when individuals complete successfully a task, they are likely
to have confidence; therefore, they can complete it again. The development of self-efficacy
inside one people can coach to inspire any one to achieve a success. They can master their
mind and control their jobs in the future.
Additionally, a study by Chen, Greene and Crick (1998) (cited in Hayek, 2012) found
that founding entrepreneurs indicated higher levels of self-efficacy of innovation and risktaking than managers and non-founding entrepreneurs. According to Segal (2005), people

with a sense of entrepreneurial self-efficacy may be drawn to self-employment’s desirable
opportunities and benefits, in comparison to the availability of these interests gained
through working for others. People who have high levels of self-confidence tend to become
an entrepreneur easier than others. Self-efficacy has been found to be significantly related to
stated occupational interest and choices.
In addition, based on studies of DeNoble (1999), these studies show that the people
who have higher self-efficacy levels can attain higher levels of successfulness in life. From
these studies, it can be included that entrepreneurial self-efficacy is likely to have a
significant impact on one’s intention to start a business. Therefore, the first hypothesis is
proposed:
Hypothesis 1: Self-efficacy is positively related to entrepreneurial intention.

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2.3.2 Optimism
Optimism is a one of a Psy Cap construct. It is defined as positive outcome outlook
and thinking about events, including emotions and motivation and being realistic (Luthans,
2002a). Optimism is described as a concept that linked to the human performance processes
and gets achievements personality. Specifically, optimists build plan to cover obstacles that
might prevent them from getting their goals. They also express the confidence to handle
difficult things to persist their tasks.
Optimists viewed bad events as external (not their fault), unstable (temporary setback),
and specific (a problem only in context) attributions. On the other hand, pessimists access
bad events in point of view of internal (their own fault), stable (will last for a long time),
and global (will undermine everything they do). Optimists tend to remain positive about
future events while the pessimists tend to internalize the negative aspects of their lives.
(Seligman, 1998).
Optimism has been linked to a variety of workplace outcomes such as performance,
job satisfaction, work happiness, and organizational commitment (Luthans & Youssef,

2007). Furthermore, optimism is similar to self-efficacy and hope in the sense of orientation
to pursue personally valuable goals but it extends sources based on internalized self to
external factors. Entrepreneurs tend to be optimistic individuals, and their optimism has
been related to venture outcomes (Hmieleski & Baron, 2009a). For example, optimistic
entrepreneurs attract prospective investors by being willing to accept payment for
inventions contingent on the success of the invention (Dushnitsky, 2010). According to
Cassar 2010, he stated that "Those who are optimistic about their life expectancy or those
who have higher self-efficacy are more likely to be an entrepreneur than to be in career
employment".
In addition, entrepreneurs have reportedly demonstrated a greater tendency towards
excessive optimism, compared to non-entrepreneurs. Hence, optimism might be critical in
providing the motivating behavior to enable the individual entrepreneur to exist through
opportunities, evaluation and particularly progress of the new venture process (is cited in
James, 2011). Thus, when entrepreneurs are optimists, it may let them face uncertainty or

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setback and focus on what is good in a situation. The optimism component not only helps
entrepreneur to face drawbacks situation but also gives opportunities for the individuals to
take seatbacks easily. Furthermore, some authors claimed that optimism was connected with
positive outcomes of entrepreneurship as well as success of entrepreneurs. Therefore,
optimism has been linked also to entrepreneurs.
Additionally, “Hành trình khởi nghiệp” newspaper stated that optimism when facing
difficulties make them become easier. An optimism attitude is synonymous with positive
attitudes. This characteristic plays a vital role for any entrepreneur. Some authors suggested,
however, that entrepreneurs, “driven by wishful thinking” (Arabsheibani et al., 2000) are
over-optimistic when compared to non-entrepreneur wage-earners, who tend to be more
pessimistic and realistic (Fraser &Greene (2006). Furthermore, Puri & Robinson’s (2007)
research demonstrates that entrepreneurs are more optimistic than others with similar

demographic characteristics. This research on entrepreneurs and optimism suggests that it is
likely that entrepreneurial intention will be associated with one’s belief that and optimism
that among entrepreneurs is not “foolhardy, excessive optimism.”Therefore, the second
hypothesis is investigated:
Hypothesis 2: Optimism is positively related to entrepreneurial intention.
2.3.3 Hope
Hope is obviously a popular term in English language with different meanings in
various contexts. Hope is conceptualized and operationalized in various ways by different
people. Much of the academic research on hope over the last 20 years has been associated
with Snyder, one of the pioneers of the Positive Psychology movement, who introduced his
cognitive theory of hope. Conceptualized as expectations or feelings about goals and the
future (Edwards, 2009), hope is defined as “a positive motivational state that is based on an
interactively derived sense of successful (1) agency (goal-directed energy) and (2) pathways
(planning to meet goals)” (Snyder et. al, 2002, p. 277). Based on Luthans & Youssef (2004),
hope as a factor in human and social capital management referred to as positive
psychological capital. It is similar to self-efficacy, it focuses on goal directed motivations
and behaviors but differs in the set of mechanisms through which these goals are achieved.

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