Factors affecting entrepreneurial intent a study of business students in vietnam

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

Nguyen Thuy Phuong Thao
FACTORS AFFECTING ENTREPRENEURIAL INTENT:
A STUDY OF BUSINESS STUDENTS IN VIETNAM
ID: 22120031

MASTER OF BUSINESS (Honors)

SUPERVISOR:
Prof. Nguyen Dong Phong

Ho Chi Minh City – Year 2014
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ACKOWLEDGEMENT
This thesis could not be accomplished without the assistance, support, advice,
guidance and encouragement from many accompanists.

I wish to express my sincere gratitude to my co-advisers Prof. Nguyen Dong
Phong and Dr. Nguyen Phong Nguyen for their commitment and enthusiasm
in supervising process, even with my minor and unwise questions.

I wish to give a big thank you for my dear colleagues, friends and classmates
for their invaluable support and encouragement when I encountered a lot of
difficulties and stresses during the process of thesis writing.

Last but not least, I would like to thank all students, lecturers and staff from
International School of Business-UEH, ERC International, University of
Economics HCMC, and Foreign Trade University for their time with
facilitating and answering my questionnaires.


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ABSTRACT
The research examines the ability of attitude, social norms, perceived
behavioural control and proactive personality in predicting entrepreneurial
intent, in which the model is operationalized as a combination between
variables from Ajzen (1991) and Batteman and Crant (1993)’s theory. Using a
data set form a sample of 396 business students, the research adopts multiple
regression analysis to test the proposed model and its hypotheses. The result
shows that both theories can be applied in Vietnamese context, in which
attitude and social norms toward entrepreneurship and proactive personality
do affect the entrepreneurial intent of business students in Vietnam; whereas
perceived behavioural intention toward entrepreneurship does not. These
findings suggest that if business students in Vietnam are lack of confidence in
their ability to starting new businesses, and they should be trained/ educated in
a way of developing soft-skills rather than focusing only in textbook.
Keywords – Entrepreneurial intention, Theory of Planned Behaviour (TPB),
Proactive Personality


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ACKOWLEDGEMENT

ABSTRACT
TABLE OF CONTENTS
LIST OF FIGURE
TABLE OF CONTENTS
CHAPTER 1 ........................................................................................................................................ 8
INTRODUCTION ............................................................................................................................. 8
1.1

Background ........................................................................................................................ 8

1.1.1

History of entrepreneurship in Vietnam......................................................8

1.1.2 Entrepreneurial activities in Vietnam ............................................................10
1.2 Research gap .......................................................................................................................... 11
1.3 Research objectives .............................................................................................................. 12
1.4 Research scope ...................................................................................................................... 12
1.5 Contributions and implications ......................................................................................... 12
1.6 Structure of the research ..................................................................................................... 13
CHAPTER 2 ...................................................................................................................................... 14
LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT ................................. 14
2.1 Theoretical background ....................................................................................................... 14
2.1.1 The application of Ajzen’s (1991) Theory Planned Behaviour
(TPB) model in predicting entrepreneurial intent...................................................14
2.1.2 Proactive Personality (Batteman and Crant, 1993) in predicting
entrepreneurial intent ..............................................................................................18
2.2. Review on “Entrepreneurial intent” ................................................................................ 19
2.3 Hypotheses development .................................................................................................... 22
CHAPTER 3 ...................................................................................................................................... 28

RESEARCH METHODOLOGY ................................................................................................ 28
3.1 Research design ..................................................................................................................... 28


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3.2 Measurement scales.............................................................................................................. 28
3.3 Sampling design .................................................................................................................... 31
3.3.1 Population ......................................................................................................31
3.3.2 Sample size ....................................................................................................31
3.4 Sampling techniques ............................................................................................................ 32
3.5 Data collection methods ...................................................................................................... 32
3.6 Data analysis method ........................................................................................................... 33
3.6.1 Statistical method...........................................................................................33
3.6.2 Descriptive statistics ......................................................................................33
3.6.3 Reliability analysis.........................................................................................33
3.6.4 Exploratory factor analysis (EFA) .................................................................33
3.6.5 Multiple regression analysis ........................................................................................... 34
CHAPTER 4 ...................................................................................................................................... 35
DATA ANALYSIS ......................................................................................................................... 35
4.1 Descriptive analysis.............................................................................................................. 35
4.2 Assessment and refinement of measurement scale ...................................................... 36
4.2.1 Cronbach’s Alpha ..........................................................................................37
4.2.2 Exploratory Factor Analysis (EFA) ...............................................................39
4.3 Multiple Linear Regression ................................................................................................ 45
4.3.1 Test of assumptions .......................................................................................47
4.3.2 Regression analysis ........................................................................................47
CHAPTER 5 ...................................................................................................................................... 50
CONCLUSION ................................................................................................................................ 50
5.1 Summary of research finding............................................................................................. 50

5.1.1 The application of Ajzen’s planned behavior model on
entrepreneurial intent in Vietnam’s context ...........................................................50


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5.1.2 The application of proactive personality construct (Crant, 1993) in
Vietnam market.......................................................................................................52
5.1.3 Summary of findings .....................................................................................52
5.2 Managerial implications ...................................................................................................... 53
5.2.1 General managerial implications ...................................................................53
5.2.2 Implications for Educators .............................................................................53
5.2.3 Implications for Practitioners ........................................................................54
5.2.4 Implications for Public policy makers ...........................................................55
5.2.5 Summary of Implications ..............................................................................55
5.3 Limitation and further research direction ....................................................................... 56
APENDICES
Appendix A: Questionnaire (English and Vietnamese version)
Appendix B: Multiple Liner Regression


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LIST OF FIGURES
Figure 2.1: Shapero’s (1982) model of the “Entrepreneur Event” (SEE) .....................14
Figure 2.2: Ajzen’s theory of planned behavior (1991) ................................................15
Figure 2.3: The proposed model ....................................................................................28
Figure 3.1: Measurement scales ....................................................................................32
Figure 4.1: Cronbach’s Alpha of remaining variables ..................................................39
Figure 4.2: KMO and Bartlett’s Test of Dependent Factor (EI) and Total

Variance Explained of Dependent Factor..................................................................... 40
Figure 4.3: EFA result ...................................................................................................45
Figure 4.4: KMO and Bartlett’s Test of Dependent Factor (EI) and Total
Variance Explained of Independent Factor ...................................................................44
Figure 4.5: Multiple linear regression ...........................................................................48


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CHAPTER 1
INTRODUCTION
1.1 Background
1.1.1 History of entrepreneurship in Vietnam
During Vietnam’s Subsidy Period, everything was controlled by the
government, so foods, goods, and services were purchased with coupons or
food stamps. The country’s economy was close to nepotism and controlling
power manipulated by those with a position in government, i.e. they received
more coupons and had access to special shops. In contrast, for those without
special status, they spent almost a day waiting in line to buy rice and other
basic commodities. Ho (n.d) states that in 1986, Vietnam’s government
approved a strategy of gradual integration into the world economy by
launching a political and economic renewal campaign “Doi Moi” - a balanced
approach to develop both industry and agriculture with a mix of state,
collective, and private ownership, which facilitated the transition from a
centrally planned economy to form of a market socialism officially termed
"Socialist-oriented market economy - Kinh te thi truong". Since then, the
establishment and development of private business in the production of
consumer goods and foreign investment has played a crucial role in the
country’s economy growth. According to Library of Congress Federal
Research Division (2005), by the late 1990s, more than 30,000 private

businesses had been created, and the economy was growing at an annual rate
of more than 7%. However, according to report of Bertelsmann Stiftung’s
Transformation Index (BTI) in 2014, due to the key structural issue in the
banking sector and state-owned enterprises (SOEs), the economy expanded by
just 5.03% in 2012, the fifth consecutive year growth had been below the 7%
average of the 1990s and early 2000s. In contrast, the private sector has been
proved its contribution to the wealth of country by accounting for roughly
60% of the country’s GDP (Per capita GDP at current U.S. prices reached
$1,523 in 2012, up from $1,224 in 2010, the year Vietnam achieved middle-


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income status according to World Bank criteria), covering about 29% the
country budget in the form of taxes in 2010 (compared to 18% in 2006),
creating 3.2 million jobs during the 2006 - 2010 period (four times more than
state-owned businesses). The investment capital ratio of the private sector
stood at 36.1% in 2010 and 35.2% in 2011. Thus, it is said that Vietnam has
made impressive economic progress as demonstrated by the consecutively
positive record of the growth of gross domestic product (GDP) during the past
decade, and private enterprises have been contributing to the success and they
should be received an appropriate concern for its sustainable growth.
Company Law and Law on Private Enterprise first adopted in 1990, which
was revised into New Enterprise Law in 1999 created a desiring environment
for the development of entrepreneurial activities in Vietnam. The later law
version not only revoked unnecessary business licenses restrictions in 145
industries, trades and services to ease private entry in the market, but also
allowed private investment funds besides the unique source of public
investment capital financed by the state budget. For two years (2000 and
2001) after the New Enterprise Law’s implementation, the number of new

enterprises grew to 35,447, more new enterprises than were generated by the
former Company Law and Law on Private Enterprise in eight years. As a
result, there had been the birth of a new class/ career called “entrepreneur”
(“Doanh nhan khoi nghiep”). The entrepreneurship development in the form
of Small and Medium Enterprises (SMEs) has emerged as a strong agent for
socio‐economic diversification as it encouraged de‐collectivization. SMEs
were defined formally in document 681/CP-KNT issued by the government in
1998. Accordingly, SMEs are those independent business and production
establishments that have registered their business under the current legislation.
“Small Enterprises” are referred to those with registered capital less than
VND1 billion and number of maximum 50 employees, while “Medium
Enterprises” are referred to those that have capital ranging from VND1 to
VND5 billion with the number of employees ranging from 51 to 200 (Ho, n.d.,
p.1-2).


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1.1.2 Entrepreneurial activities in Vietnam
Pham Nhat Vuong - Vingroup, Đang Le Nguyen Vu - Trung Nguyen, Le
Phuoc Vu - Ton Hoa Sen, Bau Đuc - Hoang Anh Gia Lai to name a few, these
successful faces of the first entrepreneurial generation in Vietnam has been
recently followed by many popular entrepreneurs. It is said that
entrepreneurial activity has significantly increased and played an important
role in Vietnam’s economic map; it also become a trend for the youth,
especially university students. Two typical key words of entrepreneurial
activities in Vietnam like on searching engine like Google “Doanh nhan tai
Viet Nam” shows 14,400,000 results in .34 seconds or “Khoi nghiep kinh
doanh tai Viet Nam” shows 1,090,000 results in .51 seconds with hundreds of
websites, associations, clubs, competitions, activities and communities for

entrepreneurs in Vietnam. The result illustrates an eventful and dynamic of
entrepreneurial activities, ranging from university students to adults, from
local Vietnamese to Viet Kieu or foreigners; and startup is becoming a
tendency and facing strong expectations for their role to be key players these
days and in the upcoming time. There are many reasons leads to the trend of
being self-employed in the country such as current high rate of
unemployment, low opportunity cost of starting own businesses compared to
being employed, unfavorable policy for office worker, family tradition, etc.
Regarding this, Ngan (2013) figured out some figures from General Statistic
of Vietnam as a good explanation for the high rate of startups in Vietnam. In
2013, 76,955 enterprises were established (10.1% higher than 2012); however,
60,737 enterprises went bankrupt or stopped operating (12.0% higher than
2012). The reasons of declaring bankruptcy included continuing losses
(56.4%), management ability (5.1%) and lack of capital and market (38.5%).
Meanwhile, Diep (2013) pointed out the number of unemployment graduates
(21-29 age range) was up to 101,000, accounting for 9.89% the total
unemployment number.


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1.2 Research gap
According to Alfonso and Cuevas (2012), in recent decades, research field of
entrepreneurship phenomenon has significantly increased in both quantity and
sophistication. They argued that the rising interest in entrepreneurship parallel
with its “contribution in the economic growth, rejuvenation of productive
structure, relaunch of certain regions, dynamization of the innovative process
and generation of employment” (p.722). Krueger et al. (2000) argue that the
need to predict behavioral intentions of individuals has increased together
with the tendency of starting own businesses in society. According to Tung

and Mui (2011), a numbers of researches on personal and environmentalbased determinants of entrepreneurial intent such as personality traits, attitude,
or social environment have been extensively discussed (Davison, 1995;
Begley et al., 1997; Branstatter, 1997; Segal et el., 2005); yet, the results
obtained are inconclusive or even contradictory. Moreover, throughout history
of literature review on entrepreneurial intention, previous studies have also
demonstrated the insufficient explanation of external factor and the
fundamental role of cognitive-based factors. In Vietnam, paradoxically, while
creating new business venture has been becoming a tendency, the interest in
studying entrepreneur seems not to be thoroughly investigated. There have
been some researches about entrepreneurship in Vietnam (Do, 2009; Ho, n.d.),
yet the cognitive-based factors influencing in entrepreneurial intent have not
been identified. Therefore, to get the big picture of what leads to real venture
creation, the need of studying the cognitive-based factors affecting
entrepreneurial intention in Vietnam is in demand. The primary objective of
this study is to examine the degree to which the Ajzen model’s variables
(attitude, social norms and perceived behavioral control) and personality scale
(Batteman & Crant, 1993), as operationalized in this study, can be used to
predict entrepreneurial intention of business students in Vietnam. Moreover,
the research also proves that the combination between the four mentioned
antecedents is the new point in the history of literature.


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1.3 Research objectives
The objective of this research is to identify main contributions in the fields of
entrepreneurial intention models and to ascertain if they are able to predict the
startup initiative of business students in Vietnam. For this propose, the theory
of planned behavior by Ajzen (1991) will be used as it gathers specifically all
the factors largely taken into consideration in the literature throughout time

regarding entrepreneurial intention. In addition, this study also tests the effect
of proactive personality (Batteman and Crant, 1993) on entrepreneurial intent.
SPSS will be used to check whether determinant factors of entrepreneurial
intention actually influence over the entrepreneurial intention; additionally,
through the same method, the study will verify if entrepreneurial intention
really explained new venture creation behavior (i.e. starting up a business) of
business students in Vietnam.
1.4 Research scope
This study focuses on business students and alumni from undergraduate and
postgraduate programs of universities in Vietnam, both local universities and
foreign universities having campuses in Vietnam. Specifically, questionnaires
are collected from students of Advanced Diploma, Bachelor, MBA and
second-degree programs from University of Economics (UEH), International
Business School (ISB - UEH), ERC International Business School and
Foreign Trade University (FTU). The research time frames were July and
August of 2014.
1.5 Contributions and implications
This research contributes to the understanding of the cognitive processes
leading

to

entrepreneurial

activities,

their

measurement,

and

the

generalizability of the model applied in Vietnam. At the same time, it can
guide not only individuals in their decision-making process of becoming an
entrepreneur but also educators, investors, economists and policy makers in
their efforts to promote entrepreneurial activity and economic development.


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1.6 Structure of the research
The research is derived from general introduction to the literature review and
hypothesis development, and the research methodology. Chapter one named
“Introduction”, the research problem and importance of studying factors
influencing entrepreneurial intent in Vietnam are discussed. The section is
followed by chapter two named “Literature review” explaining some basic
concepts and hypothesis development related to research model. Following on
that, chapter three named “Research methodology” concerning how to
conduct the study and chapter four named “Data analysis” explaining the
collected data are discussed to provide insights for conclusion and
recommendation sections at the final chapter of the research.


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CHAPTER 2
LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT
2.1 Theoretical background

2.1.1 The application of Ajzen’s (1991) Theory Planned Behaviour (TPB)
model in predicting entrepreneurial intent
Many entrepreneurship studies have been done in an attempt to identify the
situational and environmental factors that predict entrepreneurial behavior.
However, Krueger et al. (2000) argue that “intentions are the single best
predictor of any planned behavior, including entrepreneurship” (p. 412) and
entrepreneurial activity is intentionally planned behavior. That is because
when behavior is difficult to observed, intentions offer crucial insights into
underlying process as exogenous factors only affect intentions and behavior
indirectly through attitude changes (Ajzen, 1991). In 2005, Segal et al. (2005)
in their study of motivation to become an entrepreneur reassures this
groundwork knowledge. They point out there is no relationship between these
external forces and entrepreneurial activity as external factors are just consider
as a “trigger” and provide a more conducive environment supporting
entrepreneurship. Later on, many of the recent entrepreneurship-related
models are developed based on cognitive process model, in which salient
beliefs in entrepreneurial performance are focal. Upon modest reflection,
Shapero’s (1982) model of the “Entrepreneur Event” (SEE) is an
entrepreneurial intention model which is also based on cognitive process
model, though not having be tested well. According Krueger et al. (2000), the
SEE (1982) figures out three factors that control the intention to become an
entrepreneur are perceived desirability (the degree to which an individual is
attracted by creating their own business), perceived feasibility (the perception
regarding his own capacity to become an entrepreneur) and propensity to act
upon opportunities (which depends on the desire to gain control by taking
action). Besides, the entrepreneurial intention can be increased when
“displacement” events occurs (i.e. social pressure) and influences the


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desirability of the individual. Another factor increases the desirability and
creditability of social pressure would affect the entrepreneurial intention is
having some family members who are self-employed. Shapero and Sokol
(1982) set up three steps in the venture creation process: (1) preliminary phase
including some “displacement” events would lead individual to create a
venture, (2) transforming phase including a set of circumstances (such as
training, studies, family or friends) would transform a possible to a potential
entrepreneur, and (3) deciding phase including a access to sources of finance,
human or technical would trigger the individual to become an entrepreneur.
Alfonso and Cuevas (2012) in summarize Shapero’s study, state that the intent
to launching a new venture is predicted by individual’s desirability and
feasibility towards that intent, which is triggered by propensity to act on
opportunities and a displacement event (p.723). Also, Krueger et al. (2000)
prove that SEE (1982) thus requires the potential venture creation to establish
before the displacement and a propensity to act afterwards.
Perceived
desirability
Propensity to act

Intention

Perceived
feasibility
Figure 2.1. Shapero’s (1982) model of the “Entrepreneur Event” (SEE).
Source: Krueger et al. (2000)
The other intention model has been widely used as the main theory-driver
model is theory of planned behavior (TPB) (Ajzen, 1991). According to Engle
et al. (2008) in their study of predicting the behavior of people in twelve
countries about a specific action like venture creation, they state that one

approach used by researchers in an attempt to explain an individual’s
particular action is the application of cognitive theory. They find that although


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“cognitive processes include the perceiving, storing, retrieving, responding to,
and evaluating of information”, the emphasis on the cognitive process still
keep “human animal lost in thought” which may “potentially result in little
insight into the reasons for a person’s ultimate actions” (p.37). According to
Segal et al. (2005), along the history of researches on predicting behavioral
intention, the theories of reasoned action (TRA) (Fishbein & Ajzen, 1975;
Ajzen & Fishbein, 1980) and the theory of planned behavior (TPB) (Ajzen,
1987, 1991) are the most widely applied theories. The TRA includes two
construct called attitude towards the behavior and subjective norm. The TPB
(Ajzen, 1991) is an extension of the TRA and filled the limitation in the TRA
where it adds another construct called perceived behavioral control (PBC).

Attitude

Social norm

Behavioral
intention

Actual Action

Perceived
behavioral control
Figure 2.2. Ajzen’s theory of planned behavior (1991)

Attitude toward the behavior refers to the degree to which an individual has
favorable or unfavorable assessment towards a specific behavior which is
determined by the total set of beliefs to many outcomes and attributes (Ajzen,
1991). McClelland, Shapero, and Val Gelderen and Jasen (as cited in Engle et
al., 2008) found that the construct “attitude toward the behavior” consists of
three variables: autonomy, personal wealth and achievement motivation.
Specifically, autonomy includes the concepts of “independence” and
“freedom”, personal wealth is often accepted as a financial motivation and
achievement motivation can be described as the need an individual places on


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being successful, i.e., it is the degree to which one sets and strives to reach
goal. Generally, the more an individual believes in the positive result of an
intentional behavioral, the more he/she possesses a favorable attitude toward
that behavior.
Subjective norm refers to the “likelihood that important referent individuals
or groups approve or disapprove of performing a given behavior.” (Ajzen,
1991, p.195). It is related to the perception of the individual about what people
in his/her social environment support the behavior. Bandura’s observation in
1977b (as cited in Engle et. al., 2008) suggested that individuals are in favor
of adopting behavior observed in family and close friends or mentors,
especially when the outcomes of such behavior are positive. Furthermore,
Gopi and Ramayah (2007), in reporting study of Vankatesh and Davis (2000)
state that under the social influence and social pressure on behavioral
intention, the individual would perform the behavior even he/she are not in
favor of performing that behavior.
Perceived behavioral control reflects an individual’s perception concerning
his/her own capacity to achieve desired outcomes. Even an individual

possesses a positive attitude toward behavior and a supportive subjective
norm; the behavior could not be adopted due to the lack of opportunities and
resources. Based on previous model, Ajzen (1991) included other construct
so-called perceived behavioral control to deal with situation where the
individual is lack of complete volitional control over the behavior. Perceived
behavioral control can be accumulated from experience, information exchange
between individual and surrounding environment and factors influenced the
perceived difficulty of performing the behavior.
Entrepreneurship is a way of thinking emphasizes opportunities over threats,
which can be consider as an intentional process, and, therefore, intentions
consistently and robustly predict planned entrepreneurial activity. As proving
earlier in this study, while personal and situational variables typically have an


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indirect influence on entrepreneurial activity, intention-based models offer not
only insights into psychological aspect of targeted individuals but also
mechanisms to assess exogenous parties influencing creating new ventures
(Krueger et al., 2000). The Ajzen’s (1991) TPB model is probably the most
widely accepted approach in predicting the intention to create new venture,
even it not purely emphasizes on entrepreneurial behaviour but in all kind of
conducts (Alfonso & Cuevas, 2012). Empirically, the application of Ajzen’s
(1991) model has been proven through many research in entrepreneurial
intention along the literature history in both micro and macro scale (Krueger
and Brazeal, 1994; Kruegr et al., 2000; Engle et al., 2008) and the
overwhelming majority of these studies support the usefulness of Ajzen’s
theory and his view that behavioral intent is a powerful predictor of the
targeted behavior. Following on that, Christopher and Michael (2014) in their
findings of the meta-analyses about the application of Ajzen’s model (1991)

also summarize that the relationship between attitude and entrepreneurial
intent,

between

social

norms

and

entrepreneurial

intent,

between

entrepreneurial intent and perceived behavioral control are all positive and
statistically significant.
2.1.2 Proactive Personality (Batteman and Crant, 1993) in predicting
entrepreneurial intent
Batteman and Crant (1993) develop the Proactive Personality concept with a
measurement scale of 17 items, which is a relatively stable behavioural
tendency and separate from self-consciousness, need for achievement, need
for dominance, and locus of control. People with so-called “proactive
behaviour” directly alters environments and “proactive personality is one who
is relatively unconstrained by situational forces, and who effects
environmental change” and they “scan for opportunities, show initiative, take
action, and persevere until they reach closure by bringing about change”
(p.105). Crant (1996) also point out that more proactive people tend to

envision seeking out the desirable environment surrounding him/her to


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capitalize on individual strengths and needs. In contrast, people without
proactive personality show little initiative and fail to seize the opportunities,
they even passively endure circumstances and rely on others to be forced to
change. Regarding the relationship with entrepreneurial intention, Timmons
(1994, p.7, as cited in Becherer & Maurer, 1999) define an entrepreneur as
someone who “pursues an opportunity regardless of the resources they
control” which fits the proactive personality’s definition. Crant (1996) finds
that proactive personality is positively associated with entrepreneurial
intention and its measurement scale explain a significant amount of additional
variance in entrepreneurial intention even when other variables like gender,
education and having entrepreneurial parents are added in regression model.
2.2. Review on “Entrepreneurial intent”
Entrepreneurship. Entrepreneurship can be defined as the transformation of
innovation into a new product, service, or business in order to take advantage
of market opportunity (McGuire, 2003, as cited in Prabhu et al., 2011).
Entrepreneurship is a way of thinking that emphasizes opportunities over
threats. The opportunity identification process is “clearly an intentional
process, and, therefore, entrepreneurial intention clearly merit our attention”
(Krueger et al., 2000, p.411). Moreover, they also point out that “much of
human behavior is planned” and a nascent firm is not simply launched as a
conditioned response to a stimulus. In favor of this, Alfonso and Cuevas
(2012) state that intention to start a firm can precede any attempt in
entrepreneurial behavior and it is influenced by different factors; thus, “it is
assumed that we can manage these elements in order to affect the
entrepreneurial intent in a positive way, and, indirectly, over the venture

creation and entrepreneurial behavior in a given territory, as well as over the
economic growth at the same time” (p.722).


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Conceptions of Individual Entrepreneurial Intent. According to Thompson
(2009), although the “intentionality” of would-be entrepreneurs has long been
stressed as an important variable in understanding the formation of new
business ventures, the term “entrepreneurial intent” has been closely used as
some concepts such as career orientation, vocational aspirations, nascent
entrepreneurs, outlook on self-employment, and the desire to own a business.
Hence, the need to clarify the concept of individual entrepreneurial intent is
required. Firstly, he argues that the intent to own a business or to be selfemployed are quite different from entrepreneurially setting up a new firm, e.g.
an individual can own a firm by simply buying an existing firm and then
retain or put in place managers to run it without undertaking any activities
associated with entrepreneurship, or by buying a franchise or right to sell.
Secondly,

he

distinguishes

the

term

“nascent

entrepreneurs”

from

“entrepreneurial intent”. “Nascent entrepreneurs” is often referred to
“individual whose conscious intention to set up a business has progressed
from an early stage of initial interest and formative plans onto a relative
advanced stage at which concrete actions are being undertaken to effect the
reasonably imminent possible birth of a new firm” (p. 674). He also cited
other studies which refer nascent entrepreneurs to those who show interest in
starting a firm but may not have yet reached a “relatively advanced stage at
which concrete action are being undertaken to affect the reasonably imminent
possible birth of a new firm” (p. 674). Specifically, when an individual
involves in a process of many stages, in which first stage is being conscious of
intending to become an entrepreneur and last stage is “a period of setting up
and operating a new firm, such as creating a legal structure, hiring personnel,
or renting space are undertaken” (p.675) – the individual can be termed as a
nascent entrepreneur. Thirdly, he stated that entrepreneurial intent
differentiates from entrepreneurial disposition or personality. Individuals with
entrepreneurial intent have given some degree of conscious consideration to
the possibility of starting a new business at some stage in the future and they
have not rejected such a possibility; meanwhile, those with just an


21

entrepreneurial disposition may either possess any consciousness of a possible
startup or even reject such possibility when it comes. In light of the above
findings, this study supports the concept of individual with entrepreneurial
intent is the one who meets three criteria cited in Thompson (2009)’s study.
Definition of Individual Entrepreneurial Intent. Following on the above

discussion, Thompson (2009) defines the construct as a self-acknowledged
conviction of a person who possesses intent to start a business venture and
consciously plan to do so at some point in the future, they even not actually
set up a new business due to unpredictable circumstances. In case those
individuals undertake some advanced actions to go further on the process of
setting up new firms, they may advance to being nascent entrepreneurs; and
entrepreneurial intent becomes a necessary condition for a nascent
entrepreneur while the vice versa is not true. Prabhu et al. (2011) are in the
same page with the above idea when stating that individuals with
entrepreneurial intent process much more readily than people without any
intent to start a new business. Individual’s actual behavior may differ from
intended one, the intent to act toward a planned behavior can predict actual;
meanwhile, “entrepreneurial intent refers to the intention of an individual to
start a new business” (Engle et al., 2008, p. 38). However, the above definition
seems to be right, but not enough when applying in Vietnam market because
entrepreneurs in this developing market is a diversified community founded
from many classes, and is different from developed countries, which the
definition of “entrepreneurial intent” comes from. Do (2009) stated that
entrepreneurs in Vietnam can be identified by three criteria: (1) their activities
and behaviors aim at earning profit by delivering products or services to
market; (2) they possess conditions to run their own business and
appropriately psychological characteristics to the business (time, capital,
material, point of view, knowledge and skills, etc., i.e. they meet the standard
of entrepreneur characteristics; (3) their own business is the main income, i.e.


22

it can secure both their life and their family’s life and create a chance for their
development (My translate).

Definition of “Individual entrepreneurial intent” applied in the study. In
this paper, individual with “entrepreneurial intent” is defined as who wishes to
start a business venture and consciously plan to do so at some point in the
future, they even not actually set up a new business due to unpredictable
circumstances - the new business should meet the three criteria stated above,
i.e. if one possesses a business with too small scale, too low-skilled
manufacturing level, or even does not supply any products or services in the
market, he or she should not be considered as an individual with
entrepreneurial intent.
2.3 Hypotheses development
Hypotheses development. In the words of Ajzen when explaining the
relationship between variables in his theory of planned behaviour (1991), he
stated that an individual possesses a stronger intent to perform the behaviour
when the three antecedents are more favourable, and, at the same time, “the
stronger the intention to engage a behavior, the more likely should be its
performance” (Ajzen, 1991, p. 188) . Specifically, Ajzen’s theory stated that
behavioral performance can be predicted from a person’s plan and intention
towards the behavior. Intentions are therefore:
[. . .] assumed to capture the motivational factors that influence
behavior; they are indications of how hard people are willing to try, of
how much effort they are planning to exert, in order to perform a
behavior. As a general rule, the stronger the intention to engage in a
behavior, the more likely should be its performance (Ajzen, 1991,
p.181, as cited in Engle et al., p.38).
Attitude toward entrepreneurship. In TRA, attitude is preferred as the
evaluation of an individual in performing a particular behavior; it can be either


23

positive or negative feeling (Fishben & Ajzen, 1975). The definition has been
considered as the most updated one in which attitude is the degree an
individual feel towards a psychological object, it can be favorable or
unfavorable (Ajzen & Fisben, 2000). This construct can be described as the
need of being successful, i.e. the effort of a person to achieve set goals.
Similarly, attitude toward entrepreneurship defined in this paper is the degree
of an individual feel toward entrepreneurship, it can be favorable or
unfavorable.

Krueger et al. (2000) empirically show that intentions

successfully predict behavior, and attitudes successfully predict intentions
(over 50.0% of the variance in intentions). Alfonso and Cuevas (2012)
conclude that Latin America has quite favorable attitudes toward
entrepreneurship and starting a business in those countries is a common event;
and, the higher the attitudes towards entrepreneurship, the stronger the
entrepreneurial intention; and consequently, the stronger the possibilities of
initiating a business. Another research also proves the positive relationship
between attitude and entrepreneurial intent of students from three universities
in the Ukraine (Solesvik , 2012), which indicates that if they perceives doing
business in a country as being difficult, unattractive, risky, or bringing low
benefits, their attitude towards entrepreneurship might be negative.
Krueger et al. (2000) also point out that an individual’s attitudes lead to the
decision to start a business long before many entrepreneurs scan for
opportunities. It can be explained by we “learn to favor behaviors we believe
have largely desirable consequences and we form unfavorable attitudes
towards behaviors we associate with mostly undesirable consequences.”
(Ajzen, 1991, p. 191), i.e., those entrepreneurs expect that the outcomes of the
behavior will satisfy their needs and wants. Following on that, Krueger et al.
(2000) also argue that samples of university business students with favorable

attitudes toward entrepreneurship will reveal vocational preferences at a time
when they face important career decisions. Generally, the paper supports the
hypothesis stating that the more an individual believes in the positive result of


24

becoming an entrepreneur, the more he/she possesses a favorable attitude
toward entrepreneurship
H1:

There

is

a

positive

relationship

between

attitudes

toward

entrepreneurship and entrepreneurial intention.
Social norms toward entrepreneurship. The second construct named social
norms or subjective norms of model refers to the likelihood that important

referent individuals or groups approve or disapprove of performing a given
behavior (Krueger et al., 2000). Similarly, the construct is defined in this
paper as the likelihood of important referent individuals or groups approve or
disapprove an individual in setting up a new business. It is related to the
perception of the individuals about what family members, friends and mentors
think and evaluate the behavior (Ajzen, 1991). Studies have shown mixed
result regarding subjective norm as a predictor of intention. Gopi and
Ramayah (2007) point out some studies have shown no significant
relationship between social norms and intention and some studies have shown
significant relationship between them. In addition to this, they also state that
models using the TRA and TPB framework have shown social norms to have
significant relationship with intention. Engle et al. (2008), in the research
about entrepreneurial intent of twelve countries including Bangladesh, China,
Costa Rica, Egypt, Finland, France, Germany, Ghana, Russia, Spain, Sweden
and USA, they reassure “All 12 countries had social norms as a significant
predictor (in Costa Rica it alone accounted for 40 percent of the variance in
entrepreneurial intent)” (p.50). Hence, it can be said social norms have an
effect on individuals’ intent to start own business. Some people even have the
intent to establish their own business when unfavorable conditions exist just
because they have observed the experience of operating own businesses from
their family members or friends. This original construct from TRA also shows
that an individual would processes the entrepreneur intent under significant
social influence and social pressure, and would perform the process of
establishing their own business, even though he/she is not in favor of being an


25

entrepreneur (Gopi & Ramayah, 2007). According to Alfonso and Cuevas
(2012), this may well be the explanation for the situation in many high-income

European countries where the absence of a so-called “Entrepreneurial
Culture” weakens the intention of becoming an entrepreneur. This is because
in those countries, existing huge red tapes and excessive protection of workers
assumes a high cost of opportunity of self-employment in comparison with
alternative forms. This study is in favor of supporting the hypothesis in which
social norms are positively associated with entrepreneur intent.
H2: There is a positive relationship between social norms toward
entrepreneurship and entrepreneurial intent.
Perceived behavioral control toward entrepreneurship. Alfonso and Cuevas
(2012) notice some studies show that even if an individual has a good attitude
and favorable support from close people, the behavior cannot take place
necessarily due to some factors such as opportunities and resources (money,
time, skills, etc.). Ajzen (1991) also recognize the limitation of TRA model, so
he review it and add a new factor determining the intent called perceived
behavioral control which “reflects the individual’s perception concerning the
ability to achieve the specific result” (p.724). Thus, this new model fulfills the
gap of the previous one by setting as general rule that, in the words of Ajzen,
“the more favorable the attitude and subjective norm with respect to a
behavior, and the greater the perceived behavioral control, the stronger should
be an individual’s intention to perform the behavior under consideration”
(Ajzen, 1991, p. 181); and, at the same time, “the stronger the intention to
engage a behavior, the more likely should be its performance” (Ajzen, 1991,
p. 188). By other words, it is the degree to which one feels personally capable
of

starting

a

business

and

appears

central

to

intentions

toward

entrepreneurship (Scherer et al., 1989, as cited in Krueger and Brazeal, 1994).
This construct is alternatively called self-efficacy (Byabashaija & Katono,
2011) and represents a distinctive trait distinguishing entrepreneurs from
population (Krueger and Brazeal, 1994). In other word, depends on the extent