Antecedents to the Entrepreneurial Decision: An Empirical Analysis of Three Predictive Models
Posted: 1 Dec 2009
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Antecedents to the Entrepreneurial Decision: An Empirical Analysis of Three Predictive Models
Date Written: 2004
Abstract
The motivation for the decision to become an entrepreneur Is examined, and three intention-based models of the entrepreneurial decision are tested against an empirical data set. The research intends to answer two questions: (1) Why do individuals start new businesses? and (2) What factors influence that decision? The first phase of the research was a search and synthesis of literaturerelevant to the entrepreneurial decision that identified three the oretical models: (1) Ajzen's theory of planned behavior (TPB), (2) Shapero's model ofthe entrepreneurial event (MEE), and (3) Davidsson's determinants ofentrepreneurial intentions (DEI). The second phase collected 311 entrepreneurial profiles derived from the Panel Study of Entrepreneurial Dynamics (PSED).In the third phase, structural equation modeling pathanalysis was conducted on the responses. Overall fit, predictive power, andsignificance of paths were considered. Explanatory power and significance ofindividual paths were assessed. Analysis sought to determine the power of eachmodel to understand and predict entrepreneurial intentions and subsequententrepreneurial activities. Analysis found strengths and weaknesses with each model. The best fit withthe data was provided by Ajzen's TPB--MEE, and DEI failed to fit the data.Models were examined further for path significance and explanatory power. All three explained entrepreneurial activity equally well--i.e., when intention is considered, MEE and DEI improve in explanatory power. If the sole goal is prediction of entrepreneurial activity, the DEI is preferred. For a straightforward and parsimonious understanding of entrepreneurial intention andactivity, TPB is preferred. If high emphasis on maximum understanding isdesired, MEE (which is significantly more complex than the others) ispreferred. Limitations of the study and implications for future research arealso discussed. (TNM)
Keywords: Intentions, Firm success, Startups, Nascent entrepreneurs, Motivation, Management decisions, Individual traits, Behavior (individual), Firm performance, Panel Study of Entrepreneurial Dynamics (PSED)
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