Factors affecting students’ entrepreneurial intentions and their differences based on gender, tribe, and parents’ occupation: a cross-sectional study

Introduction

The prevailing patriarchal culture in Indonesia positions men as the family’s breadwinners, while women are expected to take care of the household. This fact can be seen from the Global Gender Gap Index, Indonesia in 2021 is ranked 92 out of 148 with a score of 0.697 (score 0 – 1).¹ This fact, whether the patriarchal culture adopted is an obstacle for women to enter the business world. Nevertheless, over the last three decades, entrepreneurship has emerged as an economic force in the world² and has become an important element for the economic growth and development of European countries.³ However, for developing countries, attention must be paid to the factors that may affect an individual’s intention to start a new business.⁴

The International Labor Organization,⁵ in its strategy to promote the development of women’s entrepreneurship, recognizes that women’s entrepreneurship can significantly contribute to increasing the economic welfare of families and communities, empowering women, alleviating poverty, and even promoting gender equality. Many countries, including Indonesia, choose to promote women’s entrepreneurship through education. Currently, the number of female students in Indonesia is 51.18%, higher than male students at 48.82% (PDDikti.go.id, 2022). This is an excellent opportunity to increase the role of women in entrepreneurship through higher education. Does education have an impact on women’s chances of entrepreneurship.

In 2012 in the European Union, the average education level of female entrepreneurs was higher than that of men, but the proportion of male entrepreneurs was higher than women, 19%, compared to 10% of women from the active workforce.⁶ The findings from the 2020 GEM report indicate that the entrepreneurial landscape differs across 26 countries in Europe, North America, South America, and the Caribbean, with a higher proportion of men compared to women engaging in Total Early-Stage Entrepreneurial Activity (TEA).⁷ However, the situation in Indonesia is different, as the proportion of women starting new businesses is slightly higher than men, and individuals with a bachelor’s degree are more likely to engage in entrepreneurship compared to those with lower levels of education.⁷ This data shows that there is still inconsistency between educational levels by the number of women entrepreneurs in different countries.

Readiness to enter the business world depends on the individual’s entrepreneurial intentions. Previous research has shown differences in entrepreneurial intentions between men and women.^4,8 Men’s entrepreneurial intentions are higher than women’s.^9–11 The fear of failure is more prominent as a barrier for women who are not entrepreneurs to realize their entrepreneurial intentions.¹¹ In a cultural context related to gender roles, women consider themselves less competent in entrepreneurship because they are seen as men’s duties.¹² In Arab tribes, most women see their role as the traditional wife, housekeeper, and mother.¹³ Cultural factors greatly influence women’s entrepreneurial choices and behavior.¹⁴ Furthermore, a society that adheres to the system of patriarchal culture, gender, ethnicity, and religion plays a vital role in the development of women’s entrepreneurship.¹⁵

This research is based on the assumption of the human capital theory that interest in entrepreneurship can be increased through entrepreneurship education. Research in recent years has proven a direct relationship between educational background, knowledge through behavioral characteristics, and entrepreneurial intentions. Karyaningsih et al.¹⁶ also stated that entrepreneurship education positively impacts entrepreneurial knowledge. Entrepreneurship education significantly increases entrepreneurial knowledge of forming, planning, running, or developing a business.¹⁷ Furthermore, entrepreneurial knowledge and skills influence career choices.¹⁸

Psychological factors such as self-efficacy are increasingly interesting to study concerning interest in entrepreneurship. Self-efficacy is a belief that encourages individuals to do and achieve something.¹⁹ Self-efficacy can make someone desire to do something because they have the knowledge, skills, and ability to deal with various problems. In addition, it is known that self-efficacy has a positive and significant effect on entrepreneurial intentions.^20,21 Entrepreneurial self-efficacy is the strongest predictor of entrepreneurial intention.²² However, other research states that the direct effect of self-efficacy on intention is not well established, but entrepreneurial self-efficacy can mediate the effect of self-efficacy on graduate students’ entrepreneurial intentions.²³ Recent research also proves that entrepreneurial self-efficacy moderates and strengthens the direct relationship between cognitive flexibility and entrepreneurial intention.²⁴ Also supported by other research²⁵ that entrepreneurial self-efficacy as a moderator and mediator influences individual beliefs to become entrepreneurs.

Increased entrepreneurial intentions can appear in the family environment. Several studies have proven the link between family and entrepreneurship. Entrepreneurial families provide experience and positively impact children’s intentions to become entrepreneurs. Furthermore, entrepreneurial family background has a positive impact on students’ entrepreneurial intentions,²⁶ has a positive impact on children taking risks.²⁷

This study tries to analyze whether the knowledge of entrepreneurship positively impacts the interest in entrepreneurship. This was deemed necessary because, since 2009, universities in Indonesia have been obliged to include entrepreneurship courses in the curriculum as compulsory subjects. This entrepreneurship education aims to equip students with the needed knowledge, attitudes, and skills. Another aim of this research is to look at the relationship between self-efficacy and interest in entrepreneurship, the role of moderating self-efficacy, and whether there are differences between entrepreneurial knowledge, self-efficacy, and entrepreneurial interest between gender, ethnicity, and parental occupation in the context of Indonesia, where ethnic groups generally adhere to a patriarchal culture.

Methods

Study design and sample

Research design in this study is correlational design. In correlational research design, researchers use the correlation statistical test to describe and measure the degree of association (or relationship) between two or more variables or sets of scores and not attempt to control or manipulate the variables.²⁸ In term of sampling technique used in this study, researchers employed convenience sampling procedure to gather data. In convenience sampling, researcher selects participants because they are willing and available to be studied.²⁸

Furthermore, in determining the minimum sample size, researchers utilized G*Power software.²⁹ Researchers employed α = 0.05 and power (1 – β) = 0.95, while the effect size = 0.15, with the purpose to achieve medium effect size (Figure 1).^30,31

Figure 1. Power results for required sample size.

This research included students at the Faculty of Economics, Medan State University, Indonesia. Data collection was carried out from September to November 2020 using an online survey platform.

Results

A total of 260 students returned the questionnaire. The female sample surpasses the number of the male sample (208 and 52, respectively). In total, 129 participants came from the Batak Toba tribe, 34 individuals came from Batak Karo, 15 were from Batak Simalungun, 4 were from Batak Dairi/Pakpak, 35 were Javanese, 7 were Melayu, 6 were Nias, 2 were Chinese, 14 were Batak Mandailing, 7 were Minang, and 3 were Aceh. A total of 4 individuals belonged to other tribes not described above.

For gender, there was no significant difference in the level of entrepreneurial knowledge, entrepreneurial intention, and self-efficacy (Table 1). When examining the students’ tribe, there was also no significant difference between entrepreneurial knowledge, entrepreneurial intentions, and self-efficacy (Table 2). The number of students was predominantly Toba Batak tribe at 49.62% followed by Javanese 13.46%, Batak Karo 13.08%. We observed that the average score of students’ entrepreneurial intentions from Chinese tribe was the highest at 4.085, and the lowest was Karo tribe at 3.451 (scale 1-5).

We observed that students’ entrepreneurial intentions based on their parents’ occupation have no significant difference. However, the average score of the entrepreneurial intentions, showed that for students whose parents have their own businesses scored 3.72, while students from white collar families scored 3.59. Familied who owned their own businesses consisted of entrepreneurs, farmers, and fishermen. Meanwhile, white collar families cooperated with other people or agencies such as state-owned enterprises employees, civil servants, soldier/police, and private employees.

Evaluation of model

Measurement models (outer)

The constructs in this study have reflective constructs (Figure 2). According to Hair,³¹ assessing reflective constructs involves convergent validity, internal consistency reliability, and discriminant validity. Regarding convergent validity, it is the degree to which a measure or indicator correlates with other indicators of the same construct, and the evaluation is by assessing loading factors and Average Variance Extracted (AVE) and requiring to exceed 0.5.³¹ The second examination is internal consistency reliability, a form of reliability used to determine whether the items measuring a construct are similar in their scores, requiring composite reliability and Cronbach’s alpha above 0.6.³¹ Moreover, the last evaluation in measurement models is discriminant validity. There are many approaches to evaluating discriminant validity, i.e., cross-loading,³⁵ Fornell-Larcker criterion,³⁶ and Heterotrait-monotrait ratio (HTMT).³⁷ However, HTMT is considered more accurate than the others since they suffer from recognizing the discriminant validity issues. Regarding the threshold, HTMT must not include 1, while to be conservative, 0.85 is preferable.³⁷

Figure 2. Research model for SEM-PLS analysis.

The reflective measurement model analysis results can be seen in Table 4. All of the measurement does meet the threshold required. All indicators of entrepreneurial intention, entrepreneurial knowledge, and self-efficacy have loading and AVE above 0.5. Table 4 also shows that all constructs have adequate composite reliability and Cronbach’s Alpha. Regarding discriminant validity, no variables with HTMT confidence interval include 1. The further details of HTMT results can be seen in Table 5. After all of the outer model evaluation is confirmed, the evaluation process can move to the structural model.

Structural model (inner)

Only after the measurement models (outer) are proven to be reliable and valid, then the inner model estimates can be examined to answer the hypothesized relationships among constructs.^31,38 However, to be noticed, PLS-SEM is not the same as the CB-SEM counterpart. This situation makes the inner model goodness-of-fit from CB-SEM not fully employed in PLS-SEM. The assessment of goodness-of-fit in this study follows the recommendations from Chin & others,^39,40 Henseler et al.,³⁵ and Hair Jr et al.³¹ by assessing the f² and Q² effect size. To assess f², values between 0.02 and 0.15 can be considered small effect sizes. Values between 0.15 and 0.35 are considered medium effect size, while over 0.35 is a large effect size.^41,42 In term of Q² (also known as the Stone-Geisser’s Q²), follows a blindfolding procedure to estimate the omitted part by the estimated parameters.⁴² The omission distance used was 7, following the recommedation by Chin,³⁹ while Henseler recommended berween 5 and 10. As the threshold, the Q² above 0 means the model has predictive relevance and vice versa.

Furthermore, the goodness-of-fit of this study was also evaluated by the coefficient of determination (R² value).³¹ This coefficient represents the variance in the endogenous constructs explained by all of the exogenous constructs linked to it.³¹ As a cut-off, 0.20 are considered adequate.³¹ SRMR has also been used to know the root mean square discrepancy between the observed and model-implied correlations.³¹ SRMR is an absolute measure of fit. It means if the value is zero, it indicates a perfect fit. Following a conservative approach, 0.08 indicates a good fit.

The hypotheses were evaluated using standardized path coefficients and significance levels with 5,000 bootstrapping. Table 6 presents the path coefficients and also the significance levels. In terms of direct effects, self-efficacy has a more substantial effect on entrepreneurial intention (β = 0.546, p < 0.001) compared to entrepreneurial knowledge (β = 0.236, p < 0.05). Furthermore, self-efficacy does not moderate the relationship between entrepreneurial knowledge on entrepreneurial intention (β = 0.035, p > 0.05). The effect size of entrepreneurial knowledge on entrepreneurial intention is considered small, as well as the moderating effect of self-efficacy (to be noticed, self-efficacy was found to have no moderating effect). However, self-efficacy has a medium effect size. Table 6 also shows that the Q² effect size of exogenous constructs of the model has medium effect size. Furthermore, R² effect size is also known to be adequate. Moreover, the last goodness-of-fit assessment is by evaluating the SRMR coefficient. From Table 6 can be seen that the SRMR coefficient is 0.065, which is a good fit.

Discussion

The desire to increase women’s participation in Indonesia’s political and economic sectors can be done through higher education. This desire gained momentum as women’s participation in higher education continued to increase and women’s achievements were on par with men. In fact, it has been observed that women’s academic achievement is higher than men.⁴³ In terms of self-efficacy, there is no difference between genders. Instead, women have a more adaptive approach when doing learning tasks.^44,45 The problem lies in increasing women’s intention to be active in the economic field and how to eliminate the fear of failure, which is a barrier to entering the business world. This study analyzed whether there are differences in the level of entrepreneurial knowledge, entrepreneurial intentions, and self-efficacy between genders. However, it was observed that there is no significant difference between the two. When viewed from the average score of entrepreneurial intentions, women have a slightly higher score, with a score of 3.69, as compared to men who have a score of 3.65. This is a valuable asset that should encourage women to become entrepreneurs, because the results of previous researches stated that the entrepreneurial intention of male students was higher than female students’^{10,11, 46} as well as women having lesser intentions to starting a business.⁴⁷ Therefore, this study has implications for how to design entrepreneurship education that can change the orientation of female students to become entrepreneurs.

In Indonesia, women are more interested in becoming teachers than entrepreneurs. In 2020, the number of female teachers was at a percentage of 69.84%, while that of male teachers was 30.16%. At the tertiary level, female students in education majors are also higher in number. This situation buttresses the fact that women’s intentions to become entrepreneurs are still low. Davis and Shaver⁴⁸ explained that women are less likely than men to increase entrepreneur numbers. One solution that can be proffered is for the government and all stake holders to provide entrepreneurship education to women so as to increase their entrepreneurial intentions. This is important because as Oosterbeek et al.⁴⁹ and Westhead Solesvik⁵⁰ opined, entrepreneurship education is designed to be better able to increase the entrepreneurial intention of the male students. Gender stereotypes may make women to consider themselves as less competent than men in entrepreneurship.⁵¹ Not only that, barriers to women’s entrepreneurship can be in the form of social, economic exclusion, and inequality.⁴⁶

In this study, the respondents were divided into 12 tribes. The Toba Batak tribe consisted of the majority of the study population (49.62%), which was almost half of the respondents. This study found no significant differences in terms of the level of entrepreneurial knowledge, entrepreneurial intentions, and efficacy when viewed from the category of tribe. However, when viewed from the average score for the three aspects, it would be observed that the Chinese tribe had a higher scores than other tribes. However, the accuracy is low due to the minimal number of samples for the Chinese tribe. This information aligns with business practices so far, at least in Indonesia, which is more dominated by Chinese ethnic groups.⁵² When analyzed further, the number of students’ in the ethnic groups of the Batak tribe was far greater, consisting of the Toba Batak, Karo, Simalungun, Dairi/Pakpak, and Mandailing Batak. The number of Batak respondents was 196 (75.38%). The Batak tribe adheres to traditional culture. In the patrilineal system, the men’s position is more dominant than the women’s position, and boys will become family heirs.^53,54 Therefore, this inequality gives rise to the following question: does this position harm women’s entrepreneurial intentions? Our study did not analyses this question; however, it will be interesting to further study the situation, especially the role of families in preparing their offspring for the future. Are there differences in educating children from various tribes? Is there any tribe that focuses more on educating its children to become entrepreneurs? These are questions that need to be answered.

Table 1 shows no difference in entrepreneurial knowledge, entrepreneurial intentions, and self-efficacy between female and male students. It is hoped that women’s entrepreneurial intentions will increase in order to encourage them to be better prepared to become entrepreneurs. This is because previous research show prove that men and women are both high achievers, but men are more likely to be accepted when applying for a job.⁴⁵ Furthermore, women and men are treated differently in the workplace. Sometimes, women are treated less favorably than men.⁵⁵ This situation should challenge women to focus more on entering into entrepreneurship rather than applying for jobs.

Entrepreneurial intentions can also be seen from the perspective of the correlation between parents’ work and the level of their children’s entrepreneurial intentions. This is considered essential because it helps us to know how families educate children and prepare them for the future. Family is an effective and efficient place to build entrepreneurs, and the family can be a model for entrepreneurs.⁵⁶ Parents who work as entrepreneurs are also known to be one of the factors that encourages children’s intentions to become entrepreneurs.^57,58 An entrepreneur family background encourages a higher entrepreneurial intensity score.⁵⁹ Family support is also known to be positively related to the success of women entrepreneurs.⁶⁰

Based on Table 3, there is no difference in the entrepreneurial intentions between students who have entrepreneur parents or non-entrepreneur parents. This indicates that the work of parents has no impact on the level of students’ entrepreneurial intentions. If we look at the average score of entrepreneurial intentions, students who have entrepreneurial parents only have a score that is 3.62% higher. This research’s findings provide an early indication that parents do not direct their children to follow their work. On the other hand, it seems that parents often give freedom to their children to determine their own future work. The results are quite impressive because there is no difference in the entrepreneurial intentions, while other researches generally state that women’s entrepreneurial intentions are lower.^50,61 These findings indicate that the patriarchal culture adopted by college students generally does not have a negative impact on women’s entrepreneurship. However, further investigation needs to be done to determine whether there is a role for informal education that takes place within the family system.

From the results of the hypothesis testing, entrepreneurial knowledge has a positive and significant effect on entrepreneurial intentions. This explains that people in charge of running a business are better able to run the business. This condition encourages higher entrepreneurial intentions. The level of entrepreneurial learning achievement also contributes to students’ entrepreneurial intentions,⁶² because entrepreneurship learning achievement is a description of the entrepreneurial knowledge that is owned.

Entrepreneurial knowledge can be increased through entrepreneurship education. The European Union provides entrepreneurship education to equip knowledge and encourage entrepreneurial careers’ attractiveness to the younger generation.⁶³ Entrepreneurship education can develop entrepreneurial intentions.^64–71 This research strengthens the theoretical foundation that increasing students’ entrepreneurial intentions can be done by implementing entrepreneurship education. Entrepreneurship education should not be limited to business education, but it can start from primary education to higher education with a design that is adjusted to the level of education and the clusters of knowledge being held.

Furthermore, self-efficacy is proven to have a positive and significant effect on entrepreneurial intentions. Thus, this study’s results strengthen the research that stated that self-efficacy is positively and significantly related to entrepreneurial intentions.^20,21 When students possess self-efficacy, it helps them to build a belief that enables them to do and achieve things. This belief is what drives the intention to become entrepreneurs. These findings explain that increasing entrepreneurial intentions can be done by increasing self-confidence. Self-efficacy can be built by increasing knowledge about business management through apprenticeships in the business world and successful entrepreneur models.

Moreover, when the self-efficacy variable was used as a moderating variable for the entrepreneurial knowledge variable on entrepreneurial intentions, it was found that self-efficacy did not play a role in increasing entrepreneurial intentions. However, entrepreneurial self-efficacy can mediate the effect of psychological capital on entrepreneurial intentions, where low psychological capital can be enhanced by the mediating role of entrepreneurial self-efficacy.⁷² According to Bandura’s¹⁹ definition of self-efficacy, self-efficacy refers to the belief in a person’s ability to carry out the necessary actions to produce something. The cause of self-efficacy is not a moderating variable. It can be presumed that the level of self-efficacy is influenced by the level of knowledge about managing the owned business.

Conclusions

This study examined the impact of entrepreneurial knowledge and self-efficacy on entrepreneurial intentions and whether self-efficacy acts as a moderating variable. It also analyzed the level of knowledge, self-efficacy, and entrepreneurial intentions based on gender, ethnicity, and parent’s occupation. This study’s findings are: (1) Entrepreneurial knowledge and self-efficacy positively and significantly affect entrepreneurial intentions; (2) Self-efficacy is not proven as a moderating variable; (3) The level of entrepreneurial knowledge, self-efficacy, and entrepreneurial intentions did not differ significantly when it was observed between gender, ethnicity, and parents’ occupation. Thus, efforts to increase women’s role in entrepreneurship won’t be too difficult to achieve because the entrepreneurial intentions of women are not lower than the men’ as in previous studies. Nevertheless, we need to know the impact of informal education that occurs within the family system. Also, it will be interesting to know the differences that abound in families educating their children based on culture (patrilineal) and parents’ work. This study’s results cannot be generalized because it only involved one field of science, namely economic education. However, this study provides information on the importance of entrepreneurship education, so as to increase the entrepreneurial knowledge and self-efficacy of women. For this reason, it is necessary to create entrepreneurial education designs that can increase entrepreneurial intentions, especially for women.

Data availability