Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)

Research Article: 2021 Vol: 20 Issue: 6S

Determinants of Entrepreneurial Intention of Local and International University Students: A Case From Jordan

Asaad Hameed Al-ali, Al-Ahliyya Amman University

Keywords

Entrepreneurial Intention, Local and International University Students, Jordan

Abstract

The main purpose of this empirical study is to understand the factors that may affect student’s Entrepreneurial Intention (EI) by using EIs self-administered Questionnaire (EIQ) to a convenient sample, 245 local and international undergraduate students at the first ranked private university in Jordan and the tenth Arab by the number of international students according to the QS (2020) report. The other purpose is to detect if there are differences in student’s EI from different colleges, considering that most previous research studies emphasized the EI for business students, supported with lack of empirical evidence on the variables that may influence the individual’s decision to start a venture, in addition to the traditional question, aspiring entrepreneurs do really have different demographic characteristics from those non-entrepreneurs. The findings show that entrepreneurial competencies, perceived behavioral control, personal intention and self-efficiency have significant statistical effect on EI. However, no significant statistical impact of entrepreneurial government support; social support and surprisingly entrepreneurial education on EI. According to Independent sample (t) test, there were statistically significant differences between Jordanian and non-Jordanian in EI in favor of Jordanian students, also, according to One-way Anova, the results indicate that there are statistically significant differences in some demographic variables in favor of business students and age group (22-24) years. All these results were by means of using SPSS version 25 and Smart PLS 3 to conduct Structural Equation Modeling (SEM). The author calls on both the Jordanian government and universities to educate and train students the basics to think and act as entrepreneurs so that upon graduation they can start up their own business, and to adapt non-standardized curriculum and special teaching strategies for entrepreneurship courses to different students in different colleges.

Introduction

The Jordanian economy is becoming increasingly competitive especially the labor market, at the same time tenths of thousands of new graduates enter the labor market every year. Among these are the international students who come to study and hopefully work in Jordan and also those people who migrate to Jordan due to the turbulent environment in the neighbor countries. In the last two to three decades, it was recognized that entrepreneurship and entrepreneurs are important drivers of economic growth, employment, innovation. Therefore, it is imperative to shed in-depth insights into students’ entrepreneurial intentions and activities for local and international students. Examining Entrepreneurial Intention (EI) can improve our understanding of the potential entrepreneurial behavior (Zhange et al., 2014). A large amount of literature reveals that entrepreneurship intention can be predicted through attitudes towards the behavior, subjective norms and perceived behavioral control and other factors. These factors are largely presented in Theory of Planned Behavior (TPB), (Ajzen, 1991; 2006) which is related strongly with the EI (Autio et al., 2001; Nieuwenhuizen & Swanepoel, 2015). The theory emphasizes that individuals are taking rational decisions which implies that either optimum results are expected or decision maker is aware of all the impacts and consequences (Dell, 2008). Nonetheless, some limitations can be identified from the past literature. Also, there are few mixed findings regarding the factors that may affect on intentions (Reitan, 1996; Krueger et al., 2000). Additionally, these scanty findings relate to developed economies, hardly enough empirical research has focused on developing countries, especially in Middle East.

In Jordan, the government has introduced various initiatives to overcome the chronic high unemployment level problem which reached 19 per cent and tried to cultivate entrepreneurial spirit among younger generations, especially university students. Officials’ despite their numerous efforts little is known whether university students today are entrepreneurial. In this study the basic questions to be investigated regarding the EI are as follows: What are the factors that may affect the entrepreneurial aspirations? Do EIs differ among local and international students, assuming that international students are more likely to envisage future careers as entrepreneurs and are more positive towards entrepreneurship than their local students (Davey et al., 2011), also to investigate the differences between business and other colleges’ students. A number of some general attitudes and traits that previous research suggests which may be affecting the entrepreneurial intention will be included in the context of this research. A validated entrepreneurial intent instrument will be administered to Al-Ahliyya Amman University students which was initiated in (1991) in Jordan as the first private university. The reason to choose a private university, not a formal one, is that most of international students in the formal universities are sent by their governments; this study will investigate the entrepreneurial intentions for private alimony and compare it with local students. There have been many researches on entrepreneurship intentions, to the knowledge of the researcher, no empirical work has been done in this area, and therefore, this study aims at filling this gap in literature. The researcher also hopes to offer many indicators for the faculty members, readers, policy makers, managers and academicians in general. Depending on the previous discussion the following hypotheses will be investigated.

H1: There is a significant statistical impact (α ≤ 0.05) for the independent variables (Entrepreneurial competencies, Entrepreneurial Education, Entrepreneurial Government Support, Perceived Behavioral Control, Personal Intention, Self-Efficiency and Social Support) on the dependent variable (Entrepreneurial Intention).

H2: There are significant differences between respondents to the dependent variable EI based on student nationality (local and international).

H3: There are a significant difference between respondents to the dependent variable EI based on age, faculty and other demographic variables.

Theoretical Framework and Previous Studies

Most previous research emphasized the EI for business students, see for example (Omer & Aljaaidi, 2020), few studies are related to non-business students like Iwu, et al., (2016) who investigated the determinants of EIs among engineering students and found that majority of the respondents had EIs and also the factors which contributed to their EIs are attitudinal factors which comprised of creativity, leadership, locus of control and the need for achievement. Aziz et al. asserted that students of technology colleges expected to contribute more into the field of entrepreneurship by utilizing their technical and innovative skills in entrepreneurship. Results showed that aspirants with positive attitude towards their personal future business endeavours demonstrate higher intent to establish their own business. In a new line of inquiry, experiential activities known to promote creative thinking exposure to other cultures, new experiences and art events were found to contribute to perceived entrepreneurial innovativeness (Ozaralli & Rivenburgh, 2016). Below is a summary of some of the most important factors addressed in the literature that can affect entrepreneurial intentions.

Most previous research emphasized the EI for business students, see for example (Omer & Aljaaidi, 2020), few studies are related to non-business students like Iwu, et al., (2016) who investigated the determinants of EIs among engineering students and found that majority of the respondents had EIs and also the factors which contributed to their EIs are attitudinal factors which comprised of creativity, leadership, locus of control and the need for achievement. Aziz et al. asserted that students of technology colleges expected to contribute more into the field of entrepreneurship by utilizing their technical and innovative skills in entrepreneurship. Results showed that aspirants with positive attitude towards their personal future business endeavours demonstrate higher intent to establish their own business. In a new line of inquiry, experiential activities known to promote creative thinking exposure to other cultures, new experiences and art events were found to contribute to perceived entrepreneurial innovativeness (Ozaralli & Rivenburgh, 2016). Below is a summary of some of the most important factors addressed in the literature that can affect entrepreneurial intentions. experience. According to Ritsila & Tervo (2002) there is a positive effect of personal unemployment on the intention of an individual to get engaged in entrepreneurial activities. We think that there has never developed a universally agreed complete list of personality traits of an entrepreneur.

Self-Efficacy

Self-efficacy is the strong personal belief in skills and abilities to initiate a task and lead it to success (Bandura, 1997). Self-efficacy is accumulated through the development of cognitive, social, linguistic and physical skills. Unlike other personality traits of entrepreneurship which are relatively static, self-efficacy is affected by contextual factors such as education and past experiences (Hollenbeck & Hall, 2004). This factor has been linked theoretically and empirically with many managerial and entrepreneurial phenomena (Krueger et al, 2000). According to Chen et al, individuals with high entrepreneurial self-efficacy are more likely to be entrepreneurs than those with low entrepreneurial self-efficacy. It is about an individual’s belief in his own ability to achieve intended goal through own efforts and actions (Bandura, 1997; Newman et al., 2019).

The Perceived Behavioral Control

Perceived behavioral control refers to the extent to which the individual feels capable of performing the behavior and representing the desire to be his own boss and having autonomy to pursue personal interest which is mostly based on the individual’s know how, experience and his or her appraisal of likely obstacles to performing the behavior. The greater the feeling of behavioral control the stronger will be the intention to perform the behavior (Samuel et al., 2013). By introducing “perceived behavioral control” to subjective norms and attitudes, TPB clearly explains the relationship between behavioral intention and actual behavior. It is widely used in social psychology and its applicability to the entrepreneurship domain, Ajzen's intentions-centered theory of planned behavior is attractive, well grounded in theory, and robustly predicts a wide variety of planned behaviors. Amongst the various factors influencing EI, motivation in the form of rewards has been studied. The motivational factors can be categorized into intrinsic rewards and extrinsic rewards. Intrinsic rewards refer to the psychological factors focusing on the satisfaction of being one’s own boss, being in control of one’s own destiny or taking full responsibility for the success of new venture and extrinsic rewards refer mainly to financial gain (Choo & Wong, 2006). While extrinsic goals concentrate on wealth and personal income, intrinsic goals focus on recognition, challenge, autonomy, family security, and excitement (Van Auken et al., 2006). The traits such as achievement orientation, willingness to take risks, and meeting challenges, are also considered as indicators of EIs (Raijman, 2001).

Entrepreneurial Competencies

It is a unique combination of various qualities and traits that are required to perform the job effectively. It may be the motive, traits, skills, aspects of self-image, or a body of knowledge which the person uses consciously or unconsciously to perform a given task successfully. Others asserted that it is the ability to recognize and evaluate opportunities in the market and the ability to develop relationships with other business people and also to persuade and discuss with various stakeholders and also to make sacrifices to ensure that the business gets started (Nieuwenhuizen & Swanepoel, 2015). Recent research at a university in Spain (Iglesias et al., 2019) analyzed the effects of training entrepreneurial competences on employability, considering entrepreneurship to be a transversal competence aimed at increasing employability. Several studies demonstrated how businesses growth is hindered by a lack of entrepreneurial competencies (Tehseen et al., 2019; Tehseen & Ramayah, 2015). Moreover, Hoffmann (1999) observed three different ways to define competencies; the standard of person’s performance, result or output; observable output or performance and knowledge, skills and abilities that represent the underlying attributes of a person.

Social Support

Subjective norms are sometimes viewed as perceived social pressure and norms determining an individual either to perform or not to perform a particular behavior (Aziz et al, 2019). That perceived social pressure may stems from family, friends or other relevant people such as teachers and experts and their perception concern the approve or not approve of the decision to become an entrepreneur (Costa et al., 2016). In Jordan, Jarrar surprisingly found that the effects of subjective norms for 411 students from two public universities were to be insignificant, with the exception of females in regard to the moderating level of analysis, which showed that while a woman’s family might not approve of her decision to become an entrepreneur, she would generally ignore their disapproval.

Entrepreneurship Education

Harvard Business School proposed the first entrepreneurship course by Myles Mace in 1947 (Katz, 2003). According to Izquierdo & Buelens (2008) entrepreneurship education can have an effect of EIs and attitudes have a stronger relationship with intentions. This was also supported by a recent study like Wu & Mao (2020). Block et al., (2013) confirmed the positive effect of education on the decision to become self-employed. Recent results show that a university education and support in entrepreneurship activities (such as incubator on campus) has a positive effect on the desirability and feasibility of starting a new business (Saleh & Salhieh, 2014; Asenge & Agwa, 2019; Sieger et al., 2019). Johnmark & Munene show that the more students value the entrepreneurial career path, the stronger their intentions to be entrepreneurs. Although a considerable amount of literature is available considering students attitudes and intentions through entrepreneurial education programs. However, there is still lack of empirical evidence to measure the relationship between growth in entrepreneurship and personal and environmental factors through education amongst university students from different colleges. For example, (Bae et al., 2014; Martin et al., 2013) have proven the existence of albeit small, positive relation between entrepreneurial education and EIs. In many countries, business schools have started offering entrepreneurship curriculum as part of their product portfolio. Their curriculum on ‘Entrepreneurship’ specific programs are not tailored for the specific needs for entrepreneurs and ‘Entrepreneurship’ specific programs aimed at producing managers not entrepreneurs (Siddiqui & Alaraifi, 2019; Mehtap et al., 2016) investigated 254 female business students from a private and public universities responded to a questionnaire that gauges their perceptions about potential barriers to entrepreneurship in Jordan and whether the business education they are receiving helps to prepare them for future entrepreneurial activity. Results showed that students are not aware of the opportunities available to them and are unable to make a proper assessment. We hope that this study will help in that direction.

Governmental Support

Many researchers claimed that entrepreneurship growth is promising if the government is playing its supportive role. Hamdan & Saberi (2018) found that governmental support has a significant moderating effect on the relationship between entrepreneurship and economic growth in the Gulf Cooperation Countries (GCC). The findings of Saleh & Salhieh (2014) framework which was tested on a large diversified multi-country sample from four Middle East countries (Jordan, Lebanon, Egypt, and Oman), stress the role of any government in creating a perceived climate that encourages entrepreneurship.

The proposed premises of this study concentrate on seven variables that may be related to the development of EIs: Entrepreneurial Self Efficiency; Entrepreneurial Competencies; Personal Intention; Perceived Behavioral Control; Entrepreneurial Government Support; Social Support and Entrepreneurial Education. The factors considered in this study are not considered to be exhaustive, but they are, however, believed to be some of the most critical factors in light of the literature review. This study also examined the influence of demographic factors on EI, specifically examined the effect of age, faculty, gender and education on EI.

Research Design and Methodology

Measuring entrepreneurship is of great importance for the creation and implementation of new and better programs, and enabling better evaluations. However, documenting, measuring and thereby understanding entrepreneurship is difficult because of the characteristic and dynamics involved. So, the available indicators try to measure things like personal attributes of the entrepreneur and the outcome of the entrepreneurial process (Banerjee & Duflo, 2011). This study is based on quantitative exploratory survey design using self-administered questionnaire to be distributed to the students with the help of academicians at the end of their respective classes by convenient sample method. The researcher distributed personally the questionnaire on the students who attend compulsory university courses, which are large in number of attendants and various nationalities such as tourism and antiquities.

Data, Measures and Questionnaire

The research holds a quantitative method to empirical support for the hypotheses. The empirical analysis was carried out with a survey on data collected from business and non-business undergraduate students of Jordanian and international students at Al-Ahliyya Amman University, the first private university (1991) in Jordan. To collect data, the research used the EIs Questionnaire (EIQ) designed and validated by Linan & Chen (2009) with additional variables and demographic questions by Costa, et al., (2016). Malebana also added questions to assess the effect of university education and Governmental Support Programs (GSPs) on EI. In the field of entrepreneurship research, the validity of student samples has been justified, emphasized, and used in previous research, for example, Jarrar, et al., (2019) and modified by several authors such as (Kolvereid, 1996a; Krueger, 2000; Chen et al., 1998; Saleh & Salhieh, 2014; Mehtap et al., 2016).

Data Analysis

IBM SPSS version 25 and Smart PLS 3 were applied on the collected data to conduct Structural Equation Modeling (SEM) for diagnosing not only the measurement model, but also the structure of the variables. SEM allows researchers to investigate the relationship between dependent and independent variables concurrently, and provide statistical procedures to deal with research models (Hair et al., 2014). Concerning the appropriate sample size, researchers have varied views about the suitable size especially when the study is based on SEM. For instance, Anderson & Gerbing (1988) pointed out that the appropriate size for research sample should be between 100 and 150 subjects’ minimum. While the sample size in many articles and published research ranged between 200 and 500 subjects (Lomax et al., 2004). To achieve research objectives, 260 questionnaires were distributed personally by the researcher before the outbreak of Covid-19 pandemic, 250 questionnaires were collected, 5 were excluded and accordingly with a 93% response rate. Table (1) shows the characteristics of the sample.

Table 1
SampleCharacteristics
  Variables Descriptive Frequency Percent Mean of EI
1 Gender Male 137 55.9 4.12
Female 108 44.1 4.04
2 Age 18 – lessthan 20 49 20 3.91
20 – lessthan 22 116 47.3 4.05
22 – lessthan 24 53 21.6 4.25
Above 24 27 11 4.21
3 Status Married 15 6.1 4.1
Single 230 93.9 4.08
4 Faculty Business 188 76.7 4.15
Engineering 6 2.4 3.35
Literature and science 8 3.3 4.1
Pharmacy 35 14.3 3.92
Law 4 1.6 3.57
Others 4 1.6 3.9
5 Do youpractice Entrepreneurship? Yes 95 38.8 4.18
No 150 61.2 4.02
6 Standard ofliving High 30 12.2 4.24
Medium 204 83.3 4.07
Low 11 4.5 3.82
7 Study Year Year 1 42 17.1 4.05
Year 2 67 27.3 3.99
Year 3 74 30.2 4.17
Year 4 62 25.3 4.09
8 StudentNationality Jordanian 181 73.9 4.13
International 64 26.1 3.94
9 Do you haveor practice Business? Yes 100 40.8 4.23
NO 145 59.2 3.98
Total 245 100%  

Result Analysis

Convergent validity was examined by calculating factor loadings for instrument items. All factor loadings ranging from 0.501 to 0.836 and exceed minimum recommended level 0.5 (Steenkamp & Van, 1991; Hair et al., 2014). Cronbach’s alpha was applied to investigate internal consistency. The values of alpha test ranged between (0.6012) and (0.8245) which is considered as an acceptable level of reliability according to Sekaran & bougie (2016). The Average Variance Extracted (AVE) for each latent variable was above 0.50 which show good level of convergent validity according to (Hair et al., 2014). Moreover, Composite Reliability (CR) was also applied to check internal reliability and it indicates a good internal reliability if CR value greater than 0.7 (Hair et al., 2014). Table (2) summarizes these results.

Table 2
Alpha, Cr AndAve
Construct Alpha CR AVE
EntrepreneurialCompetencies 0.6846 0.8108 0.5231
EntrepreneurialEducation 0.812 0.8688 0.5704
EntrepreneurialIntention 0.8245 0.8753 0.5467
EntrepreneurialGovernment Support 0.6138 0.7942 0.5641
PerceivedBehavioral Control 0.7625 0.8372 0.5074
PersonalIntention 0.6764 0.803 0.5097
Self-Efficiency 0.6012 0.7776 0.5414
SocialSupport 0.6224 0.7951 0.5642

Discriminant validity through correlation coefficients between research variables ranged from 0.3094 to 0.5851. This increased the confidence of discriminant validity as Kline (2010) noted that correlation coefficients less than .80 suggest evidence of discriminant validity. Table (3) summarizes the result of correlation test.

Table 3
Correlationsof Study Variables
S. No Variables 1 2 3 4 5 6 7 8
1 EntrepreneurialCompetencies 1              
2 EntrepreneurialEducation 0.4348 1            
3 EntrepreneurialIntention 0.5482 0.4375 1          
4 EntrepreneurialGovernment Support 0.3977 0.3605 0.4544 1        
5 Perceivedbehavioral control 0.4185 0.3094 0.6022 0.4351 1      
6 PersonalIntention 0.5145 0.4529 0.5851 0.3966 0.5371 1    
7 Self-Efficiency 0.4579 0.2712 0.5101 0.3842 0.5213 0.3476 1  
8 SocialSupport 0.4291 0.3301 0.4956 0.5073 0.5131 0.4814 0.324 1

The previous findings allocate evidence of discriminant and convergent validity for the proposed model indicates that the researcher can move ahead with further analysis.

Hypothesis Testing

Bootstrapping method was conducted to investigate the first hypothesis and to provide more understanding concerning the relationship among these variables. The results presented in Figure 1 and Table (4) below provide details for hypotheses result which show that this hypothesis was proven for variables :Entrepreneurial competencies, Perceived Behavioral Control, Personal Intention, Self-Efficiency.

Figure 1: Research Path Model

Table 4  
Direct PathHypothesis Result
Independentvariables Dependentvariables t-value StandardDeviation P Supported ornot
EntrepreneurialCompetencies EntrepreneurialIntention 2.846 0.057 0.0046 Supported
EntrepreneurialEducation 1.7824 0.0599 0.0753 Not
EntrepreneurialGovernment Support 0.932 0.0657 0.3518 Not
PerceivedBehavioral Control 3.8023 0.0621 0.0002 Supported
PersonalIntention 2.9181 0.0699 0.0037 Supported
Self-Efficiency 2.6518 0.0607 0.0083 Supported
SocialSupport 1.4359 0.0616 0.1517 Not

In order to test the second hypothesis, Independent T test was applied. The results presented in Table (5) below provided details for hypotheses result.

Table 5
Independent TTest For Nationality
Variable Nationality N Mean Std.Deviation F T Sig. Result
EntrepreneurialIntention Jordanian 181 4.135 0.5224 5.418 2.36 0.021 Supported
International 63 3.944 0.639

The result in table (5) shows that there are a statistically significant differences between respondents to the dependent variable EI based on the demographic variable (Nationality, Jordanian and International students) and the differences were to "Jordanian" group based on t value "2.360" and the Sig. value less than "0.05". Accordingly, hypothesis (2) was supported and accepted.
In order to test the third hypothesis, One Way ANOVA test was applied to investigate whether there are statistical differences between respondents to the dependent variable EI based on specifically, student age, faculty and other demographic variables. The results presented in Table (6) below provided details for hypotheses result.

Table 6
One Way AnovaTest For Age And Faculty
Variable(Age)
  Sum ofSquares Df Mean Square F Sig.
BetweenGroups 3.548 3 1.183    
Within Groups 72.618 241 0.301 3.925 0.009
Total 76.166 244      
Variable(Faculty)
BetweenGroups 6.164 5 1.233    
Within Groups 70.001 239 0.293 4.209 0.001
Total 76.165 244      

The result in table (6) shows that there are a statistically significant differences between respondents to the dependent variable El based on the demographic variables (Age, faculty) according to f and the Sig. values. In addition, the “post hoc” test “scheffe” shown that the differences were to (22-24) group and to “Business faculty”. Accordingly, hypothesis (3) was supported and accepted. Moreover, the result of other demographic variables (Gender, status, study year…etc.) show that there are no statistically significant differences between respondents to the dependent variable EI.

Discussion

According to Ajzen's Theory of Planned Behavior the intent is the immediate predecessor of behavior. This theory is widely used to predict and explain a wide range of people’s behaviors and intentions. The intent is influenced by factors such as investigated in this study and also stimulated by the events in life. This study allowed the confirmation of the findings of previous studies concerning the relationship between the EI and the attitudes towards entrepreneurship, the most important are: entrepreneurial competencies, perceived behavioral control, personal intention and self-efficiency, all have significant statistical effect on EI. Thus, it is suggested that the greater the student’s attitude towards the entrepreneurship, the greater the entrepreneurial intention is. For example, perceived behavioral control was found to have a significant impact on entrepreneurial intention among undergraduate students. Hence, if the students perceived that it is easier to become an entrepreneur, it will motivate them to become an entrepreneur. However, no significant statistical impact of entrepreneurial government support; social support and surprisingly entrepreneurial education on EI. This last result varies from most other research in this field especially (Newman et al., 2019). That reveals a less social and cultural pressure on the students for entrepreneurial career. According to independent sample T test, there were statistically significant differences between Jordanian and international university students in EI in favor of Jordanian students. This result can be linked to the country’s effort to enforce the university entrepreneurship ecosystem that nurtures entrepreneurial potential as well as stimulating skills to create entrepreneurial mind-sets that drive innovation. The results of One-way ANOVA revealed that there are statistically significant differences in the means of the respondent of EIs according to faculty (Business, non-business) and age variables, suggesting that business students have more EI than non-business ones. This result can be explained as students at business college are taking compulsory courses in entrepreneurship and small business management. However, these results are inconsistent with the results of some previous studies, which indicated that students of scientific or Arts and Humanities colleges are more inclined to entrepreneurship than other students like (Iwu et al., 2016; Aziz et al., 2019; Gimartin et al., 2019; Sieger et al., 2016; Sieger et al., 2019). The results also indicate students at (22-24) year group have more EI than other age groups. The other demographic variables under investigations were gender, marital status, practicing entrepreneurship, standard of living, study year and experience in doing business shown that there are no statistically significant differences between respondents to the dependent variable EI.

Recommendations

The study calls on both the Jordanian government and universities to educate and train students the basics to think and act as entrepreneurs from schools so that upon graduation they can start up their business, and to adapt non-standardized curriculum for entrepreneurship courses to different students in different colleges. Although the researcher took the necessary measures to assure standard results such as testing data validity, the small sample size in this research may pose some challenges to generalize the research findings, although the author still thinks that the results are accurate representation of the factors affecting the general community of local and international students with regards to entrepreneurial intention in Jordan, but more private and public universities from which samples should be included. For future research, the author thinks it will be more effective to follow the entrepreneurial students after graduation to make a comparative study of future validity for the proven determinants of entrepreneurial intention locally, and to investigate other new variables like the economy conditions.

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