UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Tran Thi Hoang Dung THE IMPACT OF PSYCHOLOGICAL CAPITAL ON ENTREPRENEURIAL INTENTION MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2014 TIEU LUAN MOI download : skknchat@gmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Tran Thi Hoang Dung THE IMPACT OF PSYCHOLOGICAL CAPITAL ON ENTREPRENEURIAL INTENTION ID: 22120008 MASTER OF BUSINESS (Honours) SUPERVISOR: Dr. NGUYEN THI MAI TRANG Ho Chi Minh City – Year 2014 TIEU LUAN MOI download : skknchat@gmail.com ACKNOWLEDGEMENT I would like to express my great gratitude to my supervisor, Dr. Nguyen Thi Mai Trang for her kindness, her professional guidance and encouragement as well as her valuable comments and helpful advice through my thesis. I am sincerely thankful to Professor Nguyen Dong Phong, Professor Nguyen Dinh Tho, Dr.
Tran Ha Minh Quan, Dr. Nguyen Phong Nguye and Dr. Tran Phuong Thao as proposal examination committee. Their valuable comments and constructive suggestions contributed significantly for me to complete this thesis with best results.
My special gratitude is extended to all instructors and staffs of School International Scholl of Business – University of Economics Ho Chi Minh City which give us the right to make the research for the thesis course so that we can have a chance to apply their theories to practice business. Finally, the deepest and most sincere gratitude go to my beloved family, my closest friends for the boundless support, abundant love and encouragement throughout my period of study. Therefore, I dedicate this work as a gift to them all. TIEU LUAN MOI download : skknchat@gmail.com ABSTRACT This research explores factors related to psychological capital affecting on entrepreneurial intention of undergraduate students through a survey of some 400 economics students in three universities: University of Economics Ho Chi Minh City, University of Economics and Law, International University – Vietnam National University Ho Chi Minh City.
In additions, the study also provides the impact of proactive coping factor on the relationship between determinants of psychological capital and entrepreneurial intention. The collected data was analyzed and evaluated by structural equation modeling (SEM) method through Analysis of Moment Structures (AMOS software) at the sample size of 327. This study finds out three independent variables (Self – efficacy, Hope and Resilience) have significant impact on dependent variable: Entrepreneurial intention. Optimism is not positive related to entrepreneurial intention.
Additionally, moderating variable does not have control the relationship between independent variables (Self – efficacy, Optimism, Hope and Resilience) and dependent variable (Entrepreneurial intention). It means that although one people have proactive coping high or low, it is not vital. This study contributes for development organizations as well as businessman. Students can indentify factors effecting on self – employed intention.
Therefore, students can take part in more extracurricular activities, subjects and skills to help them to achieve the dream of becoming business owners. Generally, the present study suggests important guideline for government, universities and students as well as evaluating the strength of measurement scale, the sampling method as well as the fitness between the research model and data. At the end, results in the valuable directions for further researches in future and some limitations of this research. Key words: psychological capital, proactive coping, entrepreneurial intention.
TIEU LUAN MOI download : skknchat@gmail.com TABLE OF CONTENTS ACKNOWLEDGEMENT ABSTRACT TABLE OF CONTENTS LIST OF FIGURES LIST OF TABLES CHAPTER 1: INTRODUCTION. 8 CHAPTER 2: LITERATURE REVIEW .5 The research model and hypotheses. 20 CHAPTER 3: RESEARCH METHODOLOGY.1 Preliminary qualitative research. 28 TIEU LUAN MOI download : skknchat@gmail.4 Data collection method .6 Data analysis method.
31 CHAPTER 4: DATA ANALYSIS .3 Exploratory Factor Analysis .4 Evaluate the measurement by CFA .5 SEM Testing and Hypothesis Testing .7 Results of Multiple Group Analysis. 48 CHAPTER 5: CONCLUSION, IMPLICATIONS, LIMITATIONS. 68 TIEU LUAN MOI download : skknchat@gmail.com LIST OF TABLES Table 3.2 Guidelines for in-depth interview respondents’ information .2 Reliability Test Results .3 KMO and Bartlett's Test .4 Rotated Component Matrix .5 Standardized Regression Weights .8 The results for Bootstrap estimation .9 The SEM results of variant and partial invariant model .10 The difference between fitness indices of variant model and partial invariant model in term of proactive coping .11 Summary of hypotheses testing result. 52 TIEU LUAN MOI download : skknchat@gmail.com LIST OF FIGURES Figure 1.1: The number of new enterprises was registered period 1991-1999 and from 2000- 2013 .2: Business Registration Status .1: CFA for Entrepreneurial intention.
46 TIEU LUAN MOI download : skknchat@gmail.com CHAPTER 1: INTRODUCTION 1.1 Research background In today’s world, the development of new businesses plays an important role in stimulating the economy for every nation. Furthermore, there has been a significant increase in the new generation of young businessmen. Accordingly, entrepreneurship has become crucial to every country because the development of new companies will not only help reduce unemployment rate, but enhance the economic prosperity as well. A great number of successful young companies are a major contribution for a country’s total GDP and economic growth; therefore, students should be encouraged and trained to become successful entrepreneurs in the near future.
Thus, universities need to add policies in education programs to inspire students in pursuing these goals. For instance, nowadays, the Global Business Challenge of Charted Institute of Management Accountants (CIMA) was formed in accordance with the current economic changes. The CIMA Global Business Challenge is an international business competition for undergraduates around the world, designed to bring out the best in young business leaders of tomorrow. The CIMA Global Business Challenge has grown year after year; from 8 participating regions in 2009 to 24 in 2014.
This program brings many advantages for young students and provides them with guidance and opportunities to become self-employed. In Vietnam, it seems that universities and educational intitutions tend to organize activities regarding entrepreneurial objectives for students. Thus, in order to encourage the economic benefits of a national associated with the formation of new companies, governments should encourage more students to consider self-employed as well as to become entrepreneurs (Thanh Thúy, 2014). However, Vietnam has transited from planned economies to market economies.
That may become a leverage to help enterprises achieve high performance, especially the private ones. Thus, it is necessary for supporting the development of those firms in the recent trend. With the aim of upgrading the firms’ capabilities as well as increasing brand equity for each organization, entrepreneurial intentions have recently become one of the important factors. Many organizations in Vietnam are cooperating with universities to support students in providing creative ideas in 1 TIEU LUAN MOI download : skknchat@gmail.com business through contests such as: Dynamic, SIFE, CFA, IRC, Startup Wheel etc.
Furthermore, Vietnam also has organizations which support students harboring the dream of becoming entrepreneur. For instance, Business Start Up Support Center (BSSC) was established in 2000 with wonderful mission and vision. Accordingly, the mission is proposed that BSSC will help young people catch their business’s dreams. In addition, the vision is guided that BSSC becomes the crossroads to transfer all the experiences, knowledge and useful resources from individuals and organizations within and outside the nation, in order to create a sustainable platform for the young entrepreneurs in Vietnam.2 Research problem A significant growth of unemployment rate in Vietnam has been observed in recent years.
For example, in quarter IV (2013), there were 900,000 unemployed people, 72,000 of whom were graduated students (Hồng Hạnh, 2013); hence, this might become a serious problem that people have to concern for the development of economies. In a different manner, the increase of unemployed people year by year can lead to an adverse trend. In this situation, these graduates can choose to be self-employed. Thus, students can set up businesses by themselves that can help unemployment rate reduce partially.
However, not all people can become entrepreneurs because they must have the passion and me et necessary and sufficient conditions. Therefore, each student and university needs to understand deeply about the factors that affect entrepreneurial intentions, so that universities can design suitable policies as well as guidelines for thier students. However, the proportion of students choosing to be self-employed immediately after graduating is small (Hồng Hạnh, 2013). In that research, it is also identified that many young people encounter with the following barriers to become self-employed such as poor confidence, limited knowledge, etc.
It deals with the lack of primary factors. Those students can be potential entrepreneurs but they are not aware of the career options that are given to them. As becoming the entrepreneur can be one of the options; their intention of becoming self- employed had prompted researchers to investigate particularly on the influence of entrepreneurial characteristics and entrepreneurial intention among undergraduates towards entrepreneurial activities. 2 TIEU LUAN MOI download : skknchat@gmail.com According to data of National Business Registration Portal, the number of new companies that are established in Vietnam increases year after year.
Many new enterprises were founded in the year 2012 and 2013, the number of which was 69,800 and 76,900 respectively. In general, the number of enterprises was growing between 2000 and 2013 (see in Figure 1. Additionally, In January 2014, there were 6,866 new enterprises in comparison to the number of newly established enterprises increased by 15.6% in December 2013 (see in Figure 1. The number of new companies has fluctuated in different periods of time.
Hence, self-employed is an integral part of a nation. There are more and more new enterprises that help national firms reduce unemployment rate in the current time. Thus, this is also a strong point for economic development. Moreover, senior students also should focus on factors to become a successful entrepreneur.
This situation may reduce unemployment rate in Vietnam and encourage students to seek goals in their lives. Therefore, entrepreneur intention for students’s future career path is considered as an important role in the economic development of a nation.1: The number of new enterprises was registered period 1991-1999 and from 2000-2013 (Source: National Business Registration Portal, 2013) 3 TIEU LUAN MOI download : skknchat@gmail.com New enterprises Registered capital gure 1.2: Business Registration Status (Source: National Business Registration Portal, 2014) Figure 1.2: Business Registration Status (Source: National Business Registration Portal, 2014) The number of new enterprises is increasing substantially monthly, year by year; therefore, the study of entrepreneurship plays a vital role in economy. That is a huge contribution for such development. Therefore, studying entrepreneurial intention is also necessary.
For instance, in foreign countries, many of previous studies have focused on various kinds of factors affecting on entrepreneurial intention. As Harun (2012) has stated that, personality traits and environmental factors have effects on entrepreneurial intentions. On the other hand, researchers seek to make several conceptual and empirical contributions. This research looks into the following factors which have impacts on entrepreneurial intention of students in Germany: attitude toward the behavior, subjective norm, perceive behavior control, perceived desirability and perceived feasibility (Marina et al.
Regarding this topic, in the USA, Mark et al.believe that it is important to understand students’ issues across cultures. There are six factors that have influences on self-employed in this study such as: culture/country, personal entrepreneurial exposure, expected family support, entrepreneurial disposition, perceptions of motives and perception 4 TIEU LUAN MOI download : skknchat@gmail.com of barriers. These authors looked at various factors of impacting on entrepreneurial intention. Furthermore, higher education also impacts on entrepreneurial intention of undergraduate students.
According to the Wu & Wu (2008), there are three important implications for higher education institutions and public policy arises from this study. First, TPB model of Ajzen (1991) can also be used to predict entrepreneurial intentions of students. Second, educational background has impact on entrepreneurial intentions. Attitudinal factors, perceived behavioral control are different among students with different educational backgrounds.
Third, entrepreneurship education should pay attention to entrepreneurial skills as well as inspiring students’ interest in entrepreneurship.