Antecedents of Entrepreneurial Propensity: Findings from Singapore, Hong Kong and Taiwan

Lee, Lena and Wong, Poh Kam and Foo, Maw Der (2005): Antecedents of Entrepreneurial Propensity: Findings from Singapore, Hong Kong and Taiwan.

Abstract

The existing literature identifies a number of antecedent factors that positively influence the propensity of individuals to become entrepreneurs. Key among these are self-efficacy, prior knowledge of other entrepreneurs and perception of opportunities. At the same time, policy makers commonly identify fear of failure as a major deterrent factor for entrepreneurs taking the entrepreneurial plunge.

This paper examines the relative impacts of these antecedents and deterrent factor on entrepreneurial propensity, defined as the likelihood of starting one’s own business in the three East Asian newly-industrialised economies (NIEs) of Singapore, Hong Kong, and Taiwan. We also test for possible differences in the variables effects on opportunity vs. necessity entrepreneurial propensities. Our findings highlight significant location differences among the variables in the case of overall, opportunity and necessity entrepreneurship. Finally, we discuss the relevant policy implications from our findings.

• Item Type: MPRA Paper
• Language: English
• Keywords: Entrepreneurial Propensity; Self-Efficacy; Perception of Opportunities; Prior Knowledge of other Entrepreneurs; Fear of Failure; East Asia
• Subjects: M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M2 - Business Economics; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M2 - Business Economics > M20 - General

References

Acs, Z., Arenius, P., Hay, M., and Minnitti, M. 2004. GEM 2004 Executive Report. Babson College and London Business School.

Acs, Z., and Varga, A. 2005. Entrepreneurship, Agglomeration and Technological Change. Small Business Economics 24(3): 323-334.

Alba-Ramirez, A. 1994. Self-employment in the midst of unemployment: The case of Spain and the United States. Applied Economics 26: 189-204.

Aldrich, H. 1999. Organizations Evolving. London: Sage.

Amit, R. and Schoemaker, P. 1993. Strategic Asset and Organizational Rent. Strategic Management Journal 14(1): 33-46.

Ang, S.H. and Hong, D.G.P. 2000. Entrepreneurial spirit among East Asian Chinese. Thunderbird International Business Review 42(3): 285-309.

Appelbaum, S.H., Bregman, M. and Moroz, P. 1998. Fear as a strategy: effects and impact within the organization. Journal of European Industrial Training 22(3): 113-127.

Bandura, A. 1997. Self-efficacy: The Exercise of Self-Control, New York: W.H. Freedman.

Bates, T. 1995. Self-employment entry across industry groups. Journal of Business Venturing 10(2): 143-156.

Begley, T.M. and Tan, W.L. 2001. The Social-Cultural Environment for Entrepreneurship. A Comparison Between East Asia and Anglo-Saxon Countries. Journal of International Business Studies 32(3): 537-553.

Bhave, M.P. 1994. A process model of entrepreneurship venture creation. Journal of Business Venturing, 9: 223-242.

Bian, Y. 1997. Bringing strong ties back in: indirect connection, bridges, and job search in China. American Sociological Review 62: 366-385.

Bottomley, C., Cooper, S., and Gordon, J. 2002. Experiencing Entrepreneurship: Taking a step out of the classroom and up the ladder of learning. Paper presented at a Workshop on Research in Entrepreneurial and Policy, Vlerick Leuven Gent Management School, Leuven, Belgium.

Boyd, N.G. and Vozikis, G.S. 1994. The influence of self-efficacy on the development of entrepreneurial intentions and actions. Entrepreneurship Theory and Practice 18(4): 63-77.

Branstätter, H. 1997. Becoming an entrepreneur – a question of personality structure? Journal of Economic Psychology 18: 157-177.

Brockhaus, R.H., and Horwitz, P.S. 1986. The psychology of the entrepreneur. In D. Sexton and R. Smilor (eds) The Art and Science of Entrepreneurship, Ballinger Publishing Company, Cambridge, Mass: 25-48.

Boyd, N.G. and Vozikis, G.S. 1994. The influence of self-efficacy on the development of entrepreneurial intentions and actions. Entrepreneurship Theory and Practice 18(4): 63-77.

Bygrave, W.D. 1994. The entrepreneurial process. In W.D. Bygrave (ed) The Portable MBA in Entrepreneurship, Wiley, New York: 1-25.

Caird, S. 1991. The enterprising tendency of occupational groups. International Small Business Journal, 9: 75-81.

Carter, N.M., Gartner, W.B., Shaver, G. and Gatewood, E.J. 2003. The Career Reasons of nascent entrepreneurs. Journal of Business Venturing 18(1): 13-39.

Casson, M. 1982. The Entrepreneur. Barnes and Noble Books, Totowa, NJ. Chatterjee, S., and Price, B. 1991. Regression analysis by example. New York: Wiley. Chen, C. C., Greene, P. G., and Crick, A. 1998. Does entrepreneurial self-efficacy distinguish entrepreneurs from managers? Journal of Business Venturing, 13(4): 295-316.

Chow, I.H.S., and Ng, I. 2004. The Characteristics of Chinese Personal Ties (Quanxi): Evidence from Hong Kong. Organization Studies 25(7): 1075.

Chua, B.L. 2003. Entrepreneurship in Hong Kong: Revistalizing Entrepreneurship. Mansfield.

Christensen, P.S., Madsen, O.O., and Peterson, R. 1989. Opportunity Identification: The Contribution of Entrepreneurship to Strategic Management. Aarhus University Institute of Management, Denmark.

Cooper, A. 1986. Entrepreneurship and high technology, the Art and Science of Entrepreneurship. In D. Sexton and R. Smilor (eds) The Art and Science of Entrepreneurship, Ballinger Publishing Company, Cambridge, Mass: 153-180.

Cromie, S., and Birley, S. 1992. Networking by female business owners in Northern Ireland. Journal of Business Venturing, 7(3): 237-251.

Davidsson, P. and Honig, B. 2003. The role of social and human capital among nascent entrepreneurs. Journal of Business Venturing 18: 301-331.

Davidsson, P. and Wiklund, J. 2001. Levels of analysis in entrepreneurship research: current research practice and suggestions for the future. Entrepreneurship Theory Practice, 25: 81-100.

Delmar, F., and Shane, S. 2003. Does Business Planning Facilitate the Development of New Ventures? Strategic Management Journal 24: 1165-1185.

De Noble, A. F., Jung, D. I., and Erhlich, S. B. 1999. Entrepreneurial self-efficacy: The development of a measure and its relationship to entrepreneurial action. In R. D. Reynolds, W. D. Bygrave, S. Manigart, S.M. Mason, G.D Meyer, H. J. Sapienza & K. G. Shaver (Eds.), Frontiers of Entrepreneurship Research, Waltham, MA: P&R Publication Inc., 73-87.

Dess, G.G., Lumpkin, G.T. and McGee, J.E., 1999. Linking corporate entrepreneurship to strategy, structure and process: Suggested research directions. Entrepreneurship Theory and Practice, 23(3): 85-102.

Dolinsky, A.L., Caputo, R.K., Pasumarty, K. and Quazi, H. 1993. The Effects of Education on Business Ownership: A Longitudinal Study of Women. Entrepreneurship Theory and Practice 18(1): 43-53.

Evans, D.S. and Leighton, L. 1990. Small Business Formation by Unemployed and Employed workers. Small Business Economics, 2(4): 319-320

Gartner, W.B., Shaver, K.G., and Carter, N.M., and Reynolds, P.D. 2004. Handbook of Entrepreneurial Dynamics: The Process of Business Creation. Sage Publications.

Gatewood, E.J., Shaver, K.G. and Gartner, W.B. 1995. A Longitudinal Study of Cognitive Factors influencing Start-up behaviours and success at Venture Creation. Journal of Business Venturing, 10(5): 371-391.

Gifford, S. 1992. Allocation of entrepreneurial attention. Journal of Economic Behavior and Organization , 19: 265-284.

Gompers, P., Lerner, J., Scharfstein, D. 2003. Entrepreneurial Spawning: Public Corporations and the Genesis of New Ventures, 1986-1999. National Bureau of Economic Research. Massachusetts, Cambridge.

Johannisson, B. 1998. Personal networks in emerging knowledge-based firms: spatial and functional patterns. Entrepreneurship and Regional Development, 10(4): 297-312.

Kennedy, P. 1992. A Guide to Economic Methods. MIT Press, Cambridge, M.A. King, G., and Zeng L. 2001. Logistic Regression in Rare Events Data. Political Analysis 9: 37-63.

Koellinger, P., Minniti, M., and Schade, C. 2007. I think I can, I think I can’: Overconfidence and entrepreneurial behaviour. Forthcoming in Journal of Economic Psychology.

Kruger, N.F., and Brazeal, D.V. 1994. Entrepreneurial potential and potential entrepreneurs. Entrepreneurship Theory and Practice 18(3): 91-104.

Krueger, N. and Carsrud, A. 1993. Entrepreneurial intentions: applying the theory of planned behaviour. Entrepreneurship and Regional Development 5(4): 315-330.

Krueger, N.F. and Dickson, P.R. 1994. How believing in ourselves increases risk taking: perceived self-efficacy and opportunity recognition, Decision Science, 25: 385-400. Lau S. K. 2000. Short on Social Values. Sunday Morning Post.

Leong, C.C. 2004. Government development assistance programmes (GDAPs) for small and medium-sized enterprises (SMEs) in a knowledge-based economy. International Journal of Entrepreneurship and Innovation Management 4(2/3): 124-137.

Lin, C.C. 2001. A Comment on Labor Markets, Unemployment, and minimum wages: A New View, Eastern Economic Journal 27(1): 71 - 82

Lin, N. 1999. Social networks and status attainment. Annual Review of Sociology 25: 467-487.

Littunen, H. 2000. Networks and local environmental characteristics in the survival of new firms. Small Business Economics 15(1): 59-71.

Martinelli, A. 1994. Entrepreneurship and management. In Smelser. N. and Swedberg, R. (eds), The Handbook of Economic Sociology, Princeton, NJ: Princeton University Press.

Matthews, C.H and Moser, S.B. 1996. A longitudinal investigation of the impact of family background on gender on interest in small firm ownership. Journal of Small Business Management 34(2): 29-43.

Murray, G., and Perera, A. 1995. Singapore: the global city-state. St. Martin’s Press.

Nezlek, J.B., and Zyzniewski, L.E. 1998. Using hierarchical linear modelling to analyze grouped data. Group Dynamics: Theory, Research, and Practice 2: 313-320.

Ngiam, K.J. 2000. Coping with the Asian Financial Crisis: The Singapore experience, in Yu, T.S. and Xu, D. (Eds.), From crisis to recovery: East Asia rising again? World Scientific Publishing, Singapore.

Ray, S. and Cardozo, R. 1996. Sensitivity and creativity in entrepreneurial opportunity recognition: a framework for empirical investigation. Presented at the Sixth Global Entrepreneurship Research Conference, Imperial College, London.

Reynolds, P.D., Bosma, N., and Autio, E. 2005. Global Entrepreneurship Monitor. Data Collection Design and Implementation 1998-2003. Small Business Economics 24(3): 205-231.

Reynolds, P.D., Camp, S.M., Bygrave, W.D., Autio, A., and Hay, M. 2002. Global Entrepreneurship Monitor 2002 Executive Report. Kansas City, Ewing Marion Kauffman Foundation.

Reynolds, P.D., Storey, D.J. and Westhead, P. 1994. Cross-National Comparisons of the Variation in New Firm Formation Rates. Regional Studies, 28(4): 443-456.

Romanelli, E., and Schoonhoven, C.B. 2001. The local origins of new firms, in Schoonhoven, C.B and Romanelli, E. (Eds.), The Entrepreneurship Dynamic, Origins of Entrepreneurship and the Evolution of Industries. Stanford University Press.

Sarasvathy, S.D. 2004. Constructing corridors to economic primitives. Entrepreneurial opportunities as demand-side artifacts. In Butler, J.E. (Eds.), Opportunity-identification and entrepreneurial behaviour (pp. 291-312). Information Age Publishing Inc.

Scott, M.G and Twomey, D.F. 1988. The Long-Term Supply of Entrepreneurs: Students’ Career Aspirations in Relation to Entrepreneurship. Journal of Small Business Management 26: 37-44.

Shane, S. 2000. Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science 11(4): 448-469.

Shane, S. 2002. Network ties, reputation, and the financing of new ventures. Management Science 48(3): 364-81.

Shane, S. 2003. A general theory of entrepreneurship. The individual-opportunity nexus. Edward Elgar Publishing, UK.

Shane, S. and Venkataraman, S. 2000. The promise of entrepreneurship as a field of research. Academy of Management Review 25(1): 217-226.

Shapero, A. 1981. The role of entrepreneurship in economic development at the less-than-national level, in R. Froedman and W. Schweke (eds) Expanding the Opportunity to Produce: revitalising the American economy through new enterprise development. The corporation for Enterprise Development, Washington D.C: 25-35.

Shaver, K.G. and Scott, L.R. 1991. Person, process, choice: the psychology of new venture creation. Entrepreneurship Theory and Practice 16(2): 23-45.

Simon, M., Houghton, S.M. and Acquino, K. 2000. Cognitive biases, risk perception, and venture formation: How individuals decide to start companies. Journal of Business Venturing 14(5): 113-134.

Soubbotina, T. and Sheram, K. 2000. Beyond Economic Growth. Meeting the challenges of global development, Washington, DC: World Bank.

Steier, L. 2000. Entrepreneurship and the evolution of angel financial networks. Organization Studies 21(1): 163-92.

Sternberg, R., and Wennekers, S. 2005. Determinants and Effects of New Business Creation Using Global Entrepreneurship Monitor Data. Small Business Economics 24(3): 193-203.

Stevenson, H.H., Roberts, M. J. and Grousbeck, H. I. 1985. New Business Ventures and the Entrepreneur. Irwin, Homewood, IL.

Stewart, W., Watson, W., Carland, J., Carland., J. 1999. A proclivity for entrepreneurship: A comparison of entrepreneurs, small business owners, and corporate managers: A meta-analytic review. Journal of Applied Psychology 86(1): 145-153.

Sweeney, G.P. 1985. Innovation is entrepreneur-led. In G.P. Sweeney (ed) Innovation Policies: International Perspective (pp. 80-113). Frances Pinter, London.

Tan, W.L. 2003. Entrepreneurship challenges ahead for Singapore. Mansfield.

Tan, W.C.M. and Tay, R.S.T. 1994. Factors contributing to the growth of SMEs: the Singapore case, Proceedings of Fifth ENDEC World Conference on Entrepreneurship, Singapore: 150-161.

Thaler, R.H. 2000. From homo economicus to homo sapiens. The Journal of Economic Perspectives 14(1): 133–141.

Timmons, J. 1999. New venture creation: Entrepreneurship for the 21st century. Boston: Irwin/McGraw-Hill.

Walker, G., Kogut, B. Shan, W. 1997. Social capital, structural holes and the formation of an industry network. Organization Science 8: 109-25.

Wong, S. L. 1988. Emigrant Entrepreneurs. Shanghai Industralists in Hong Kong. Hong Kong. Oxford University Press.

Wong, P.K and Ng, C.Y. 2001. Industrial Policy, Innovation and Economic Growth: The Experience of Japan and the Asian NIEs. Singapore University Press, National University of Singapore.

Wood, R. and Bandura, A. 1989. Social cognitive theory of organizational management. Academy of Management Review 14(3): 361-384.

Wu, R.I. and Huang, C.C. 2003. Entrepreneurship in Taiwan: Turning Point to Restart: Mansfield Foundation.

Yu, T.F.L. 2000. Hong Kong’s entrepreneurship: behaviours and determinants, Entrepreneurship & Regional Development 12: 179-194.

Yu, W. and Su, K. 2004. On one’s own: Self-employment activity in Taiwan. In Richard, A. and Mueller, R (Eds.) The Return of Self-Employment: A Cross-National Study of Self-Employment and Social Inequality (pp: 386-425). Princeton: Princeton University Press.