The formation of youth entrepreneurial intention in an emerging economy: the interaction between psychological traits and socioeconomic factors

Abstract

Purpose

Youth entrepreneurship has been identified as a key driver in overcoming the economic crisis spurred by youth unemployment. However, the understanding of youth entrepreneurship is largely based on research in high-income countries. Furthermore, entrepreneurship studies to date are largely limited to the independent effects of individual traits on entrepreneurial intention (EI). Hence, this study aims to model the cognitive and social conditions, mediating processes and interactions to understand how youth EI can be formed and strengthened in an emerging economy.

Design/methodology/approach

A cross-sectional sample of 295 Malaysian youths participating in an online entrepreneurship program were included to assess their family socioeconomic background, individual personality traits and EI using regression, mediation and moderation models. Within the sample, 29 youths who completed the program were examined for pre- and post-training intervention differences to identify whether entrepreneurial traits can be developed.

Findings

Results showed that a proactive personality or proactiveness was a key mediator in how an internal locus of control (ILOC) and self-esteem influence EI. Furthermore, ILOC and proactiveness were found to compensate for the lack of parental financial support in the formation of EI among low-income youth. Finally, there was a significant increase in proactive personality scores post-intervention, indicating that this trait can be strengthened through entrepreneurship programs.

Research limitations/implications

This study focused on parental income as an indicator of family socioeconomic background, which may not accurately represent the diversity of the socio-ecological environment of an individual. Therefore, future research should assess the multi-dimensional indicators of socioeconomic status and their relations with psychological attributes in shaping EI. Furthermore, this study observed a small sample size for the pre- and post-intervention analysis. Hence, more studies with large sample sizes are needed to examine the impact of entrepreneurship education.

Practical implications

Considering that entrepreneurship is envisioned as an instrument to lift youths out of poverty, this study has important implications for entrepreneurship programs that target low-income youths. The findings suggest that such programs need to first emphasize developing ILOC and proactiveness among these youths, thus enabling them to overcome various structural barriers toward entrepreneurship, as opposed to a purely knowledge-based learning approach.

Social implications

To effectively lift youths out of poverty through entrepreneurship, policymakers and educational institutions need to first recognize that the EI of youth from varying socioeconomic backgrounds are formed differently. Hence, the approach of entrepreneurship programs catered toward youth from lower socioeconomic backgrounds will differ from programs catered to youths who are financially secure. Instead of a one-size-fits-all approach, entrepreneurship programs targeted at low-income youths must first emphasize building their mindsets of ILOC and proactivity to overcome financial challenges as opposed to focusing solely on building entrepreneurial skills and knowledge.

Originality/value

The findings offer a more holistic and nuanced view of the contingencies where the efforts of policymakers, educational institutions and practitioners are more likely to succeed in stimulating EI among youths in emerging economies. In addition, the study also bridges the gap between the theoretical understanding of EI and the practical implications of developing effective entrepreneurship programs by combining the cross-sectional analysis and pre- and post-intervention test in the same study. Importantly, the study highlighted the importance of considering youth’s socioeconomic background in the design and implementation of entrepreneurship programs.

Citation

Nungsari, M., Ngu, K., Chin, J.W. and Flanders, S. (2023), "The formation of youth entrepreneurial intention in an emerging economy: the interaction between psychological traits and socioeconomic factors", Journal of Entrepreneurship in Emerging Economies, Vol. 15 No. 2, pp. 333-359. https://doi.org/10.1108/JEEE-08-2021-0312