Academy of Entrepreneurship Journal (Print ISSN: 1087-9595; Online ISSN: 1528-2686)

Research Article: 2021 Vol: 27 Issue: 3S

The Effect of Entrepreneurial Motivation on Entrepreneurial Intention of South African Rural Youth

Mmakgabo Justice Malebana, Tshwane University of Technology

Abstract

The purpose of this paper is to investigate entrepreneurial motivation among final year commerce students in Limpopo and Mpumalanga, and to determine the relationship between entrepreneurial motivation, entrepreneurial intention and the antecedents of entrepreneurial intention. A cross-sectional survey was conducted on a sample of 496 students using a structured questionnaire. Data were analysed by means of SPSS Version 26. Findings revealed that the respondents valued both intrinsic and extrinsic rewards and the need for independence in their decision to start a business. Results show that entrepreneurial motivation had a statistically significant positive relationship with entrepreneurial intention and its antecedents.

Keywords

Entrepreneurial Intention, Entrepreneurial Motivation, Theory of Planned Behavior, South Africa.

Introduction

Entrepreneurial motivation is vital for the creation and growth of new ventures (Kuratko & Hodgetts, 2007; Delmar & Wiklund, 2008; Marques et al., 2013; Malebana & Nieuwenhuizen, 2015) and determines entrepreneurs’ decisions to search, evaluate and exploit entrepreneurial opportunities (Shane et al., 2003). Entrepreneurial motivation refers to the willingness of individuals to exert an effort to start their own businesses (Barba-Sánchez & Atienza-Sahuquillo, 2017). Motivation comprises internal factors that impel action and external factors that can act as inducements to action (Locke & Latham, 2004), and it also affects three aspects of action namely, choice, effort and persistence. While entrepreneurial motivation is significantly related to an individual’s intention to start a business (Achchuthan & Nimalathasan, 2013; Malebana, 2014), it also serves as a crucial link between entrepreneurial intention and action (Carsrud & Brännback, 2011). Entrepreneurial intention is defined as self-acknowledged convictions by individuals that they intend to establish new business ventures in the future (Thompson, 2009). Therefore, enhancing both entrepreneurial intention and motivation is vital for economic growth in terms of the establishment and growth of new ventures that would create job opportunities for the youth and the unemployed. Despite the fact that South Africa experiences high unemployment rates (Statistics South Africa, 2020), the decision for most individuals to engage in entrepreneurial activity is driven primarily by opportunity motivation rather than necessity motivation (Herrington & Kew, 2015/16). This means that these individuals want to pursue an opportunity and are not involved in entrepreneurship because they had no other options.

Carsrud & Brännback (2011) opined that tittle research efforts are targeted at understanding entrepreneurial motivation. Similarly, with regards to the South African context, research concerning the link between entrepreneurial motivation and entrepreneurial intention and its antecedents among the youth is still very scarce (Malebana, 2014). While some studies have investigated entrepreneurial motivation in South Africa (Mitchell, 2004; Fatoki, 2010; Hamilton & de Klerk, 2016) little research has been conducted regarding the relationship between entrepreneurial motivation, entrepreneurial intention and its theoretical determinants. As result, this study investigates the motives for starting a business among final year commerce students in Limpopo and Mpumalanga, and determines whether entrepreneurial motivation has a significant relationship with entrepreneurial intention and the antecedents of entrepreneurial intention based on the theory of planned behavior.

Literature Review

Intentionality of the Entrepreneurial Behavior

According to Kruege et al. (2000) & Liñán et al. (2013), entrepreneurial activity is an intentionally planned behavior. This view has been supported by recnt empirical studies which have shown the link between entrepreneurial intention and behaviour (Gieure et al., 2020; Yaseen et al., 2018; Aloulou, 2017; Kolvereid, 2016; Rauch & Hulsink, 2015; Kautonen et al., 2015; Kibler et al., 2014; Kautonen et al., 2013; Kolvereid & Isaksen, 2006). Additionally, there is evidence showing that individuals who have high preference for self-employment are more likely to be self-employed (Verheul et al., 2012). In line with Ajzen’s (2005) view, the results of these studies suggest that individuals’ actions follow reasonably from their intentions. As one of the most influential and popular frameworks for the prediction of intentions and human behavior (Ajzen & Cote, 2008), the theory of planned behavior suggests that entrepreneurial intentions can be predicted with high accuracy from attitude towards the behavior, subjective norms and perceived behavioral control (Ajzen, 2005; 2012). Attitude towards the behavior refers to the degree to which an individual is attracted to the act of starting a business, mainly due to the outcomes associated with running one’s own business and how positively or negatively one evaluates these outcomes. Perceived behavioral control refers to individuals’ assessments of their own capability of performing a given behavior, which is determined by perceived availability or absence of factors that can facilitate or impede the performance of the behavior (Ajzen, 2005; Ajzen & Cote, 2008). Subjective norms refers to the perceived social pressure to perform or not to perform the behavior, which depends on whether individuals think their social referents would approve of their decision to engage in that behavior and whether they want to comply with such social referents’ expectations (Ajzen, 2005).

In recent years there has been some concerted research efforts attempting to link entrepreneurial motivation to entrepreneurial intention and its antecedents (for example, Raza et al., 2018; Choudhury, 2017; Malebana, 2014; Solesvik, 2013). Despite the differences in the focus of analysis, research evidence suggests that entrepreneurial intention and its antecedents are positively related to entrepreneurial motivation (Raza et al., 2018; Purwana et al., 2018; Choudhary, 2017; Juneja, 2016; Malebana, 2014; Solesvik, 2013:264; Marques et al., 2013). While Carsrud & Brännback (2011) regard entrepreneurial motivation as a crucial link between entrepreneurial intention and action, the relationship between motivation and entrepreneurial intention is considered to be neither non-linear nor unidirectional. This means that entrepreneurial motivation can propel individuals who have strong entrepreneurial intentions to transform such intentions into new ventures. Alternatively, it can impact positively on entrepreneurial intention and its antecedents. Findings of prior research attest to these suppositions (Solesvik, 2013; Malebana, 2014; Raza et al., 2018). The findings of Wibowo et al. (2019) show that entrepreneurial motivation can influence the antecedents of intention and can also are determined by an individual’s intention. Additionaly, Choudhary (2017) reported that both opportunity and necessity motivation have a positive effect on entrepreneurial motivation, with opportunity motivation having a higher influence than necessity motivation.

Motivation to Start a Business

Entrepreneurial motivation has been studied from various perspectives including the reasons, motives, or goals of entrepreneurs (Hessels et al., 2008). Studies on the reasons, motives, or goals of entrepreneurs for starting a business indicate that individuals can be pulled or pushed into an entrepreneurial career (Wickham, 2006). Those who are pulled into entrepreneurship are driven by factors such as financial rewards, challenge and desire for independence, personal development, achievement and recognition. Pull factors that include the need for independence, the need for material incentives and the need for achievement were found to be primary motivators for South African entrepreneurs (Mitchell, 2004). Some of these pull factors have been stated as reasons for starting a business (Moore et al., 2010; Carter et al., 2003) or categorised into intrinsic, extrinsic and independence/autonomy motives (Choo & Wong, 2006). In their categorisations, Choo & Wong (2006) regard the need to receive a salary based on merit, to provide a comfortable retirement, need for money, need for a job and to realize a dream as extrinsic rewards whereas intrinsic rewards encompass the desire to have an interesting job, take advantage of one’s creative talents and the need for challenge. Malebana, (2014) found that the need for independence, the need for challenge and the need to take advantage of one’s creative talents were top motivators among final year commerce students in Limpopo, suggesting that these students were motivated primarily by autonomy and intrinsic factors. Extrinsic factors had lower mean scores compared to autonomy and intrinsic factors. Barba-Sánchez & Atienza-Sahuquillo (2012) found that entrepreneurs are primarily motivated by the need for achievement, self-realization, independence, affiliation, competence and power than by other reasons. Another study that was conducted in South Africa found that top motivators for Generation Y female students were independence and extrinsic motives while intrinsic motives scored the lowest (Hamilton & de Klerk, 2016).

Based on a discussion of the theory of planned behaviour and the pull factors or reasons for starting a business above, the conceptual model is indicated below together with the hypotheses that were formulated for the study.

H1a: A significant positive relationship exists between the antecedents of entrepreneurial intention and entrepreneurial intention.

H1o: There is no relationship between the antecedents of entrepreneurial intention and entrepreneurial intention.

H2a: A significant positive relationship exists between entrepreneurial motivation and entrepreneurial intention.

H2o: There is no relationship between entrepreneurial motivation and entrepreneurial intention.

H3a: A significant positive relationship exists between entrepreneurial motivation and the antecedents of entrepreneurial intention.

H3o: There is no relationship between entrepreneurial motivation and the antecedents of entrepreneurial intention

Moreover, factors such as poor pay and lack of prospects, lack of innovation and negative displacement or lack of alternatives, unemployment and job insecurity can push individuals to become entrepreneurs (Wickham, 2006). According to Lucas et al. (2008) necessity influences the attractiveness of entrepreneurship and the intention to start a business. It has also been found that unattractive working conditions, job dissatisfaction, job insecurity, and personal factors that include debts can push an individual to engage in entrepreneurial behavior (Liang & Dunn, 2006; Henley, 2005). In contrast, the results of a study involving a representative sample of 1000 nascent entrepreneurs indicate that new ventures are started by individuals who leave their jobs despite being happy in those jobs (Schjoedt & Shaver, 2007) (Figure 1).

Figure 1: The Effects of Entrepreneurial Motivation on Entrepreneurial Intention

Sample

This study was carried out using a quantitative survey and included 496 final year commerce students at two universities in selected rural provinces in South Africa, namely Limpopo and Mpumalanga. This sample was obtained by means of convenience and purposive sampling techniques. The reason for choosing this group of students is that they were relevant for studying the factors that influence entrepreneurial motivation. As final year students who were facing important career decisions on completion of their studies, assessing entrepreneurial motivation of this sample was deemed appropriate. This is in line with other similar previous studies (Giacomin et al., 2011; Solesvik, 2013; Malebana, 2014). The second reason for using this convenience sample is the fact that they are a captive audience that represents the youth. Research findings from this sample would be valuable to policymakers who have the mandate to design and implement interventions for promoting youth entrepreneurship.

Data Collection

A structured questionnaire that was designed on the basis of validated questionnaires that were used in previous studies was distributed to students during their lectures. Students were informed about the purpose of the research and were asked to freely participate in the study by signing consent forms and completing the questionnaire. Entrepreneurial intention and its antecedents were measured using seven point Likert type questions that were adopted from Liñán & Chen’s (2009) entrepreneurial intent questionnaire. Entrepreneurial motivation was measured on the basis of 10 questions that were adopted from Malebana, (2014); Choo & Wong (2006); Carter et al. (2003) using a seven point Likert scale. Demographic data of the sample which were used as control variables were collected using nominal scales. These control variables included gender, employment status, prior entrepreneurial exposure such as business ownership, entrepreneurial family background and prior start-up experience. Prior research has shown that these variables are associated with entrepreneurial intention and its antecedents (Liñán & Chen, 2009; Mohamad et al., 2015; König, 2016; Entrialgo & Iglesias, 2016; Aloulou, 2017; Malebana & Zindiye, 2017).

Data Analysis and Results

The Statistical Product and Service Solutions (SPSS) Version 27 was used to analyses the data. The analysis of the data relating to the characteristics of the sample was conducted by means of descriptive statistics while hierarchical regression analysis was used to test the hypothesized relationships among variables.

Profile of the respondents

Of the 496 respondents, as shown in Table 1, 61.3% were female and 38.7% were male. In terms of age 25.6% were in the age category between 18 and 21 years, 62.7% of the respondents were in the age category between 22 and 25 years, 7.5% were between 26 and 30 years, 2.4% were between 31 and 35 years, while 1.8% were over the age of 35 years. These statistics mean that about 98.2% of the respondents were the youth as defined earlier. About 5% of the respondents were employed at the time of the survey. In terms of prior exposure to entrepreneurship, 6.3% were running their own businesses, 33.7% had tried to start a business before, while 32.3% had an entrepreneurial family background.

Table 1: Demographic Characteristics Of Respondents
Variables Description Frequency Percentage (%)
Gender Male 192 38.7
Female 304 61.3
Total 496 100
Age 18-21 years 127 25.6
22-25 years 311 62.7
26-30 years 37 7.5
31-35 years 12 2.4
Above 35 years 9 1.8
Total 496 100
Entrepreneurial family background Yes 160 32.3
No 336 67.7
Total 496 100
Runs own business Yes 31 6.3
No 465 93.7
Total 496 100
Tried to start a business before Yes 167 33.7
No 329 66.3
Total 496 100
Employment status Yes 25 5
No 471 95
Total 496 100

Reliability and Validity of the Results

The reliability of the measuring instrument was tested by means of Cronbach’s alpha. Cronbach’s alpha values for the variables, as shown in Table 2, were 0.777 for entrepreneurial intention, 0.782 for attitude towards becoming an entrepreneur, 0.880 for perceived behavioral control, 0.674 for subjective norms, and 0.847 for entrepreneurial motivation. Since these values were between 0.6 and 0.880, the measuring instrument was considered having moderate to very good internal consistency reliability and therefore acceptable for use in this study (Hair et al., 2016; Field, 2013).

Table 2: Descriptive Statistics And Reliability Results
Variables Mean Standard Deviation Cronbach Alpha
Entrepreneurial intention 2.18 0.962 0.777
Attitude towards becoming an entrepreneur 2.13 0.962 0.782
Subjective norms 2.73 1.76 0.674
Perceived behavioural control 2.06 0.968 0.88
Entrepreneurial motivation 2.23 0.958 0.847

Exploratory factor analysis was also conducted using principal component analysis which extracted a seven-factor solution with eigenvalues greater than one, which in combination accounted for 69.7% of the variance. Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy was 0.855, which was well above the acceptable limit of 0.5, suggesting that the sample size was sufficient to conduct factor analysis (Field, 2013). Bartlett’s Test of Sphericity was highly significant with the probability of less than 0.5 (X2 = 2541.997, df = 406; p < 0.001), indicating that some correlations exist amongst the variables and therefore factor analysis could proceed (Burns & Burns, 2008). Data were also tested for the independence of errors and multicollinearity. The values of the Durbin-Watson statistic ranged from 1.711 to 2.082, which were well within the acceptable range from 1 to 3 as suggested by Field, (2013). Therefore, the data did not violate the assumption of independence of errors. Tolerance values ranged from 0.827 to 0.979, and since they were larger than 0.2, this means that multicollinearity was not a problem. This suggests that multiple correlations with other variables were not high (Pallant, 2016). Variance inflation factors (VIF) ranged from 1.024 to 1.481, which were also highly satisfactory since they were below 10 (Field, 2013; Pallant, 2016). This means that there were no high correlations between variables.

Entrepreneurial Motives of the Respondents

The results in Table 3 indicate that the top entrepreneurial motives (based on the mean scores) for the respondents were the need to be independent (own boss) (Mean=5.85), the need for challenge (Mean=5.80), the need to take advantage of one’s creative talents (Mean=5.77), followed by the need to earn more money (Mean=5.77), and the need to have an interesting job (Mean=5.74). The findings suggest that the respondents valued both intrinsic and extrinsic rewards and the need for independence in their decision to start a business, indicating that pull factors outweighed push factors among the respondents. The need for a job and the need to maintain a family tradition were the lowest ranking motives for starting a business among the respondents.

Table 3: Entrepreneurial Motives Of The Respondents
N Minimum Maximum Mean Std. Deviation
To be my own boss 486 1 7 5.85 1.593
To challenge myself 488 1 7 5.8 1.575
To take advantage of my creative talents 486 1 7 5.77 1.558
To earn more money 486 1 7 5.77 1.705
To have an interesting job 485 1 7 5.74 1.67
To follow the example of a person I admire 486 1 7 5.53 1.771
To take advantage of a market opportunity 485 1 7 5.57 1.658
To increase my status/prestige 486 1 7 5.37 1.835
The need for a job 482 1 7 5.13 1.886
To maintain a family tradition 485 1 7 4.89 2.053

Regression Analysis Results

The results (Table 4, Model 1) indicate that control variables explained 5.6% of the variation in entrepreneurial intention (F (5,490) = 5.828; p<0.001). Of the control variables, only having tried to start a business before had a significant positive effect on entrepreneurial intention (β = 0.174, p<0.001). No statistically significant relationship was found between gender, current employment status, current ownership of a business, having family members who are running businesses and entrepreneurial intention.

Table 4: Hierarchical Regression Models For The Effect Of Entrepreneurial Motivation
Entrepreneurial intention Attitude Perc. Beh. control Subjective norms
Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Model 7
Control variables:
Gender 0.078 0.008 0.01
Currently employed 0.003 0.01 0.013
Currently runs a business 0.017 0.007 0.007
Family members run a business 0.075 0.027 0.022
Has tried to start a business before 0.174*** 0.078* 0.077*
Independent variables:
Attitude towards becoming an entrepreneur 0.464*** 0.451***
Perceived behavioural control 0.261*** 0.253***
Subjective norms 0.035 0.031
Entrepreneurial motivation 0.056 0.289*** 0.323*** 0.290***
0.120**
Multiple R 0.237 0.672 0.674 0.289 0.323 0.29 0.12
R Square (R2) 0.056 0.452 0.455 0.084 0.104 0.084 0.104
Δ Adjusted R2 0.046 0.443 0.445 0.082 0.102 0.082 0.012
Δ F-Ratio 5.828 50.148 44.971 45.159 57.405 45.355 7.238
Significance of F 0.000*** 0.000*** 0.000*** 0.000*** 0.000*** 0.000***

In Model 2 the theoretical antecedents of entrepreneurial intention were added to control variables, which increased the proportion of the variation in entrepreneurial intention from 5.6% to 45.2% (F (8,486) = 50.148; p<0.001). The results show that having tried to start a business before (β = 0.078, p<0.05), attitude towards becoming an entrepreneur (β = 0.464, p<0.001) and perceived behavioral control (β = 0.261, p<0.001) were significantly positively related to entrepreneurial intention. Subjective norms were not significant in predicting entrepreneurial intention. These results partially support hypothesis H1a.

The results in Model 3 indicate that the addition of entrepreneurial motivation to control variables and the theoretical antecedents of entrepreneurial intention slightly increased the explanatory power of the model by 0.3% from 45.2% to 45.5% (F (9,485) = 44.971; p<0.001). However, entrepreneurial motivation had no significant effect on entrepreneurial intention. Findings revealed that having tried to start a business before (β = 0.077, p<0.05), attitude towards becoming an entrepreneur (β = 0.451, p<0.001) and perceived behavioral control (β = 0.253, p<0.001) had a significant positive effect on entrepreneurial intention.

Models 4 to 7 show the results of the effects of entrepreneurial motivation on entrepreneurial intention and its antecedents. Entrepreneurial motivation had a significant positive relationship with entrepreneurial intention (β = 0.289, p<0.001), accounting for 8.4% of the variance in entrepreneurial intention (F (1,494) = 45.159; p<0.001). Findings revealed that entrepreneurial motivation is significantly positively related to the attitude towards becoming an entrepreneur (β = 0.323, p<0.001), and explained about 10.4% of the variance in the attitude towards becoming an entrepreneur (F (1,494) = 57.405; p<0.001). The results indicate that entrepreneurial motivation had a significant positive effect on perceived behavioral control (β = 0.290, p<0.001). About 8.4% of the variance in perceived behavioral control was accounted for by entrepreneurial motivation (F (1,494) = 45.355; p<0.001). Additionally, entrepreneurial motivation had the lowest significant positive effect on subjective norms (β = 0.120, p<0.01), and accounted for 1.4% of the variance in subjective norms (F (1,493) = 7.238; p<0.01).

Therefore, these results support hypotheses 2a and 3a. As shown in Model 3, the results suggest that the impact of entrepreneurial motivation on entrepreneurial intention diminishes when analyzed jointly with the theoretical antecedents of entrepreneurial intention. This means that entrepreneurial motivation can only have an effect on entrepreneurial intention when it is analyzed as the sole independent variable.

Limitations

Since the study did not test the relationship between entrepreneurial motivation and entrepreneurial behavior, no causal relationships can be inferred. Future studies should examine the link between entrepreneurial motivation and the creation of new ventures in order to shed light on how entrepreneurial motivation influences entrepreneurial behavior. The use of convenience sampling limits generalizability of the findings to all final year students in South Africa.

Conclusion

The purpose of this study was to identify the motives for starting a business among final year commerce students in Limpopo and Mpumalanga. The study also determined whether entrepreneurial motivation has a significant relationship with entrepreneurial intention and the antecedents of entrepreneurial intention based on the theory of planned behavior. High ranking motivators among the respondents were the need to be independent (own boss), the need for challenge, the need to take advantage of one’s creative talents, followed by the need to earn more money, and the need to have an interesting job. These results corroborate the findings of Hamilton & de Klerk (2016) in terms of the importance of independence and extrinsic motives but differ on intrinsic motives. This means that the respondents were more likely to be pulled into entrepreneurship rather than being pushed into it. They wanted to become entrepreneurs in order to be independent and achieve both intrinsic and extrinsic rewards. These findings concur with those that were reported by Malebana, (2014). In line with the results in the Global Entrepreneurship Monitor reports, the findings in this study indicate that despite the high unemployment rates in the country, most individuals engage in entrepreneurial activity because of opportunity motivation rather than necessity motivation (Herrington & Kew, 2015/16).

The results revealed that entrepreneurial motivation had a significant positive effect on entrepreneurial intention and all three antecedents of entrepreneurial intention. The results are also in line with those of Achchuthan & Nimalathasan (2013); Solesvik, (2013); Wibowo et al. (2019) who reported a positive relationship between entrepreneurial motivation, entrepreneurial intention and the antecedents of entrepreneurial intention. Additionally, Raza et al. (2018) found that entrepreneurial motivation has a significant positive effect on entrepreneurial intention. However, the impact of entrepreneurial motivation on entrepreneurial intention diminished when analyzed together with the theoretical antecedents of entrepreneurial intention. Despite the differences in the focus of analysis, these results contradict those of Malebana, (2014) where the relationship between entrepreneurial motivation and perceived behavioral control was not significant. Findings indicate that prior start-up experience is significantly positively related to entrepreneurial intention. This means prior experience of having started a business before equips an individual with the knowledge that inspires one to try again. The results support those of prior research which found a positive relationship between start-up experience and entrepreneurial intention (Mohamad et al., 2015; García-Rodríguez et al., 2015; Malebana & Zindiye, 2017). With regards to the theory of planned behavior, the results have shown that entrepreneurial intention of the respondents is determined by attitude towards becoming an entrepreneur and perceived behavioral control. Subjective norms were not significant in predicting entrepreneurial intention. Hence the results provide partial support for the theory of planned behaviour. The results corroborate those of Entrialgo & Iglesias (2016); Liñán & Chen (2009); García-Rodríguez et al. (2015) which have shown that subjective norms were not significant in predicting entrepreneurial intention. The results therefore, contribute to the advancement of the theory of planned behavior and entrepreneurial motivation literature that is based on this theory by indicating significant positive relationships between entrepreneurial motivation, entrepreneurial intention and the antecedents of entrepreneurial intention.

These findings suggest that efforts that are directed at increasing the attractiveness of the entrepreneurial career and enhancing the capability for starting a business are vital in order to stimulate entrepreneurial intention. Therefore, adopting student-centred and practice-oriented entrepreneurship education would provide students with the opportunity to learn about what it what takes to start a business, which ultimately would positively affect their intention to start their own businesses. Universities should partner with business support institutions to ensure that resources are easily accessible for students to experiment with their ideas during their studies. The fact that entrepreneurial motivation is positively related to entrepreneurial intention and its antecedents implies that entrepreneurship educators can play a vital role in guiding students towards the entrepreneurial career path. Among others, they could emphasize the benefits of entrepreneurship and use entrepreneurs as guest speakers during lectures and case studies that portray the benefits of entrepreneurship. Such a persuasive environment with continuous interactions with entrepreneurs is more likely to impact positively on entrepreneurial motivation, which in turn, will directly influence entrepreneurial intention and its theoretical antecedents. Policymakers can increase entrepreneurial motivation and enhance the formation of entrepreneurial intention by designing and implementing support programmers that could encourage the youth to start their own businesses and positively change the antecedents of entrepreneurial intention.

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