ISSN: 2277-5536 (Print); 2277-5641 (Online)

ENTREPRENEURIAL INTENTION IN TWO GENERATIONS, A SURVEY

FROM A GLOBAL STUDY
Rajish Panhye, Yesudasan Kumar Singh
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Department of International Business, D.B.F. Dayanand College of Art & Science, Solapur, India

ABSTRACT
The aim of the current study was to investigate if the age of entrepreneurs moderates the impact of
entrepreneurial competencies on the entrepreneurial intention. In fact, the authors aimed at identifying
whether the influence of the entrepreneurial competencies on entrepreneurial intention is a matter of age or
not. The data of a sample of 258794 adults from 60 countries participated in annual surveys of Global
Entrepreneurship Monitor (GEM) from 2001 to 2013 were analyzed using Pearson correlation coefficient,
linear and logistic regression and hierarchical linear modeling by IBM SPSS Statistics version 20. Results
indicated that in general, age moderates the influence of the entrepreneurial competence on entrepreneurial
intention i.e. the older the entrepreneurs, the less conversion of their competencies to the entrepreneurial
intentions. Specifically, age moderates the influence of self-efficacy, entrepreneurial network, and riskwillingness on entrepreneurial intention while, the moderating influence of age on the relationship between
knowing opportunities and entrepreneurial intention was not supported.

KEYWORDS: Entrepreneurial Competence, Risk-willingness, Opportunities, Intention, Age, Global

Entrepreneurship Monitor
INTRODUCTION
Today one of the major concerns in the societies is the aging of the population and many economies are
suffering from the aging and the policy makers and the scientists (for example, Schulz, 2001; Disney, 1996;
Schulz and Binstock, 2008) are concerned with the future challenges of the economies related to the aging
of the populations. Aging of the population is considered to have fundamental problems to the economics
such as the reduction of the productions, imposing the extra expenses to the economies and the reduction
of the productivity and efficiency of the economic policymaking (Schulz, 2001). Regardless of huge
expenses and challenges that the elderly population impose on the society, the aging of the population also
incur some limitations on the economic activity of the individuals and enterprises (Zhang, 2008). Some
studies notice the adverse effect of the aging on the economic activity of the individuals (Levesque, M., &
Minniti, 2006; Kean, Van Zandt & Maupin, 1993; Czaja, S. J., & Sharit).
One of the important aspects of the aging of the population on economic activity of the individuals is the
entrepreneurship area that has attracted a great interest and huge body of the literature. Studies in this area
show that the higher ages push a limiting force on entrepreneurial activities at individual and at
organizational (firm) and national level (Zhang, 2008; Kean, Van Zandt & Maupin, 1993). At the individual
level researches indicate that the aging has a limiting influence on the entrepreneurial intention
(Kristiansen& Indarti, 2004; Kautonen, Luoto & Tornikoski, 2010), self-efficacy (Wilson, Kickul &
Marlino, 2007) confidence (Chye Koh,1996; Koellinger, Minniti, & Schade,2007; Arenius, & Minniti,
2005) etc.

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At the firm level, studies show that entrepreneurship or the innovation in the firm has been influenced by
the manager/owners age (Levesque & Minniti, 2006) also it has been shown that the network of the
entrepreneurs will be strengthened by their age (Butler & Hansen, 1991; Jack, Moult, Anderson & Dodd,
2010).
Page | 2 As mentioned earlier, the age of the individuals is shown to have a negative influence on their
entrepreneurial intention. There are other studies showing that the entrepreneurial competencies have a
significant influence on entrepreneurial intention. The purpose of the current research was to investigate if
the age of the individuals moderate the positive influence of the entrepreneurial competencies on
entrepreneurial intention of the individuals. So, the main question was that do age moderates the
competency-intention path? And if yes is this moderation is the same amongst the three generations (youth,
young adults and adults)?
Research Hypotheses
H1: Age exerts a significant influence on entrepreneurial competence.
H1a: Age exerts a negative significant impact on knowing entrepreneurs.
H1b: Age exerts a negative significant impact on entrepreneurial self-efficacy.
H1c: Age exerts a negative significant impact on knowing entrepreneurial opportunities.
H1d: Age exerts a negative significant impact on knowing entrepreneurial risk-willingness.
H2: Entrepreneurial competencies exert a significant influence on entrepreneurial intention.
H2a: Self-efficacy exerts a significant influence on entrepreneurial intention.
H2b: Knowing opportunities exerts a significant influence on entrepreneurial intention.
H2c: Risk-willingness exerts a significant influence on entrepreneurial intention.
H2d: Acquaintance with entrepreneurship (knowing entrepreneurs) exerts a significant influence on
entrepreneurial intention.
H3: Age moderates the influence of entrepreneurial competencies on entrepreneurial intention.
H3a: Age moderates the impact of self-efficacy on entrepreneurial intention.
H3b: Age moderates the impact of knowing opportunities on entrepreneurial intention.
H3c: Age moderates the impact of risk-willingness on entrepreneurial intention.
H3d: Age moderates the impact of acquaintance with entrepreneurship on entrepreneurial intention.

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Figure1- Conceptual framework of the research

Age

Entrepreneurial Competence
Entrepreneurial Self-efficacy
Knowing Entrepreneurs

Entrepreneurial
Intention

Knowing opportunities

RESEARCH DESIGN AND DATA

3.1. Data and Sampling
This study benefits from data collected by Global Entrepreneurship Monitor (GEM) from 2001 to 2013 and
provided freely on the web (Global Entrepreneurship Research Association, 2014). As the world largest

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study of entrepreneurship, annually, GEM surveys individuals reports of their involvement in

entrepreneurship (whether they own, manage, start or intend to start a business) as well as national
framework conditions regarding to entrepreneurship activities (Bosma, 2013; Kelly, Singer and Herrington,
2012). Countries participate in GEM surveys on annual basis and based on self-selection. Our data are
extracted from the Adult Population Survey (APS) for 2001 to 2013 from the following countries:
Page | 4
Angola, Argentina, Australia, Azores, Bosnia, Belgium, Bolivia, Brazil, Switzerland, Chile, China,
Colombia, Costa Rica, Germany, Denmark, Ecuador , Egypt, Spain, Finland, France, Ghana, Greece,
Guatemala, Croatia, Hungary, Ireland, Iran, Israel, Iceland, Italy, Jamaica, Japan, South Korea, Latvia,
Montenegro, Macedonia, Mexico, Malaysia, Netherlands, Norway, Peru, Pakistan, Palestine, Portugal,
Romania, Russia, Saudi Arabia, Sweden, Slovenia, Tunisia, Turkey, Trinidad & Tobago, Taiwan, Uganda,
United Kingdom, United States, Uruguay , Vanuatu, South Africa and Zambia. The number of participating
countries and the sample size (258794 cases) fairly represent the whole entrepreneurs and entrepreneurship
activities in the world and thus enables us to fairly generalize the results.
In the adult population survey, in addition to data about numerous variables, we also can find data about
age, entrepreneurial competencies and entrepreneurial intentions (the variables used in the current study).

3.2. Measuring Entrepreneurial Competencies

The GEM survey for evaluating individual competencies and adults involvement in entrepreneurship has
asked about 4 variables which the authors of the current study treat them altogether as a single index of
entrepreneurial competence.

Self-efficacy: Do you have the knowledge, skill and experience required to start a new business?
Risk-Willingness: this item has been measured as fear of failure with the following question: Would fear
of failure prevent you from starting a business?
For the current research data for fear of failure were reversed to gain the data about risk-willingness of the
entrepreneurs.
According to the literature, social network of entrepreneurs evolves over time and it is less possible to
transfer it from a region to another. It leads the individuals to become entrepreneurs within the region they
live (Bnte, Falk and Heblich, 2009; Michelacci and Silva, 2007; Tabellini 2008). When discussing so, we
mean that personal ties and peer groups of the entrepreneurs are locally bonded (Bayer, Ross, and Topa
2008). Based on the above argument, the GEM survey has asked the individuals about the entrepreneurial
opportunities and personal networks as follows:
Knowing Opportunities: In the next six months, will there be good opportunities for starting a business in
the area where you live?
Acquaintance with entrepreneurship through personal network (Knowing Entrepreneurs): Do you know
someone personally who started a business in the past 2 years?

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3.3. Measuring Entrepreneurial Intention

The GEM survey of adult population has collected data about entrepreneurial intention of 258794 cases
from 2001 to 2013. This variable has been measured via the following question:
Are you, alone or with others, expecting to start a new business, including any type of self-employment,
Page | 5 within the next three years?

3.4. Age of Entrepreneurs

Some of the questions in the GEM survey ask entrepreneurs about their demographic variables such as age.
In the current research, the adults between 35-64 years old are selected to measure the impact of age on
dependent variables.

3.5. Statistical Analysis

The data of the current study were analyzed through the following techniques: 1-correlation analysis (for
determining whether we are allowed to use 4 entrepreneurial competencies as a single index of
entrepreneurial competence); 2- logistic regression (as the dependent variables of the study are
dichotomous) and; 3-hierarchical linear modeling (as our model considers the impact of the country of
residence as a random effect). Based on Woltman, Feldstain, MacKay & Rocchi (2012), Hierarchical
Linear Modeling (HLM) is a complex form of ordinary least squares (OLS) regression that is used to
analyze variance in the outcome variables when the predictor variables are at varying hierarchical levels
(p. 52)
All the analyses were done via IBM SPSS Statistics software version 20.

RESULTS
In this section, the sample has been described regarding to age, entrepreneurial competencies and
entrepreneurial intention. Then, the results of hypotheses testing are provided.

4.1. Means, standard deviations and correlations

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The characteristics of the sample are described in Table 1. Age was coded 1 for old and 0 for the rest of the
sample.
Table1. Means, standard deviations and correlations of the variables
Age

Intention

Competence

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Age
1
Intention
-.199**
1
Competence
-.133**
.324**
1
Knowing
-.161**
.212**
.628**
entrepreneurs
Self-efficacy
-.063**
.279**
.670**
Knowing
-.096**
.223**
.626**
Opportunities
Risk-.005*
.096**
.541**
willingness
41.09
.21
.49
Mean
14.089
.411
.306
Std
Correlation is significant at the 0.01 level (2-tailed). **

Knowing
entrepreneurs

Selfefficacy

Knowing
opportunities

Riskwillingness

.235**
.220**

1
.193**

.045**

.153**

.089**

.40
.489

.53
.499

.42
.494

.64
.480

Correlation is significant at the 0.05 level (2-tailed).*

Age is correlated with entrepreneurial intention and old adults are less intended to become entrepreneurs
than youth. Self-efficacy, knowing opportunities, knowing entrepreneurs and risk-willingness are
significantly correlated to each other thus, considering all of them as a single index of entrepreneurial
competence is allowed.
4.2. Age affecting entrepreneurial competence
For measuring the influence exerted by age on entrepreneurial competencies, linear and logistic regression
was used. At the first glance, the impact of age on a single index of entrepreneurial competence (computed
as an index comprising of four competencies of knowing entrepreneurs, self-efficacy, knowing
opportunities and risk-willingness) measured using linear regression. Then the impact of age on each of
competencies tested separately (hypotheses under the category of H1). Age was coded 1 for the adults
between 35-64 years old and 0 for the rest of the sample.

Table2. The Influence of age on entrepreneurial competence

Model

Unstandardized Coefficients

B
(Constant)
.534
AGE3564
-.058
a. Dependent Variable: Competence
1

Std. Error
.001
.001

Standardized
Coefficients
Beta
-.092

Sig.

521.360
-45.278

.000
.000

As table 2 shows, the influence of age on entrepreneurial competence is negatively significant. This means
that the older the people, the less their confidence in their entrepreneurial competence.
Table 3. The effect of age on Self-efficacy

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Step

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1a

Self-efficacy

S.E.

Wald

df

Sig.

Exp(B)

-.067

.009

59.493

.000

.936

.006

8128.769

.000

1.768

Constant
.570
a. Variable(s) entered on step 1: Self-efficacy.

Table 4. the effect of age on knowing entrepreneurs

Step 1a

Knowing
entrepreneurs

S.E.

Wald

df

Sig.

Exp(B)

-.455

.009

2765.166

.000

.634

16000.850

.000

2.052

Constant
.719
.006
a. Variable(s) entered on step 1: knowing entrepreneurs.

Table 5. the effect of age on knowing entrepreneurial opportunities

Step

1a

OPPORT

S.E.

Wald

df

Sig.

Exp(B)

-.322

.009

1195.342

.000

.725

.006

11307.317

.000

1.935

Constant
.660
a. Variable(s) entered on step 1: OPPORT.

Table 6. the effect of age on risk-willingness

Step

1a

NOFEARFAIL

S.E.

Wald

df

Sig.

Exp(B)

-.129

.009

206.605

.000

.879

.007

7136.167

.000

1.841

Constant
.611
a. Variable(s) entered on step 1: NOFEARFAIL.

Tables 3 to 6 show that the effects of age is significant on four competencies of self-efficacy (B= -0.067,
P-value=.000), knowing entrepreneurs (B= -0.455, P-value=.000), knowing entrepreneurial opportunities
(B= -0.322, P-value=.000) and risk-willingness (B= -0.129, P-value=.000) in the environment respectively.
4.3. Age and entrepreneurial competence affecting entrepreneurial intention
For measuring the impact of entrepreneurial intention, competencies were considered totally as a single
index and each of them separately as a variable (Hypotheses under the category of H2).Tables 7 and 8 show
the results.

Table 7. the effect of competence on intention

B

S.E.

Wald

df

DAV International Journal of Science Volume-4, Issue-2, June 2015

Sig.

Exp(B)

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Step 1a

competence

2.816

.019

22598.115

.000

16.710

.013

49444.261

.000

.059

Table8. the effect of entrepreneurial competencies on intention

B
S.E.

Wald

df

Sig.

Exp(B)

Step 1a

2199.964

.000

1.761

.000
.000
.000
.000
.000

2.086
1.322
3.283
.523
.096

Constant
-2.838
a. Variable(s) entered on step 1: competence.

Page | 8

KNOWENT

.566

.012

OPPORT
.735
.012
3730.373
1
NOFEARFAIL
.279
.013
462.916
1
SUSKILL
1.189
.013
7788.804
1
AGE3564
-.649
.012
2970.203
1
Constant
-2.346
.017
20055.376
1
a. Variable(s) entered on step 1: KNOWENT, OPPORT, NOFEARFAIL, SUSKILL, AGE3564.

Hierarchical linear modeling (considering country of residence as a random effect) employed to test the
effect of 4 competencies on entrepreneurial intention. Results in tables 7 and 8 indicate that among the
variables age exerts a negative significant effect on entrepreneurial intention (B=-0.649, P-value=.000), and
the effects of competence (as a single index) (B=0.279, P-value=.000), self-efficacy (B=1.189, Pvalue=.000), risk-willingness (B=0.649, P-value=.000), knowing entrepreneurs (B=-0.566, P-value=.000)
and knowing opportunities (B=-0.735, P-value=.000) are positively significant on entrepreneurial intention.
In general, results of table 7, indicates that the older the people the less their intention in doing business or
engaging in entrepreneurial activities. Other results from the table 7 indicate that entrepreneurial
competencies (either as a single index or as four separate variables) make the individuals more intending
and enthusiastic to entrepreneurship.

4.5. Age moderating the effects of competencies on entrepreneurial intention

The results for moderating role of age in the relationship between competencies and entrepreneurial
intention have been presented in tables 8 and 9.
Table8. The moderating role of age on the effect of competence index on intention
Parameter

Estimate

Std. Error

df

Sig.

Intercept
AGE3564
Competence
AGE3564 * Competence

.081750
-.028904
.387669
-.078842

.019061
.003168
.004305
.005305

61.050
228824.039
228862.578
228823.676

4.289
-9.122
90.045
-14.861

.000
.000
.000
.000

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Table9. The moderating role of age on the effect of competencies on Intention

Page | 9

Parameter

Estimate

Std. Error

df

Sig.

Intercept
AGE3564 * SUSKILL
KNOWENT * AGE3564
NOFEARFAIL * AGE3564
OPPORT * AGE3564
OPPORT
NOFEARFAIL
KNOWENT
AGE3564
SUSKILL

.088872
-.030018
-.023868
-.019355
-.004595
.092129
.039652
.102394
-.027933
.162646

.019186
.003841
.003833
.003862
.003812
.003042
.003093
.003000
.003831
.003080

62.004
183069.080
183065.506
183064.651
183067.993
183097.926
183073.557
183075.320
183070.064
183090.798

4.632
-7.816
-6.226
-5.011
-1.205
30.287
12.820
34.126
-7.291
52.806

.000
.000
.000
.000
.228
.000
.000
.000
.000
.000

Results indicate that in general, age negatively moderates the effect of entrepreneurial competence on
entrepreneurial intention. Specifically, age negatively moderates the effect of knowing entrepreneurs, selfefficacy and risk-willingness on entrepreneurial intention. These results indicate that being old, the
translation and conversion of competencies to entrepreneurial intention will be reduced.
Table 8 also indicates that the effect of knowing opportunities on entrepreneurial intention doesnt influence
by moderating role of age. In other word, if entrepreneurs know an opportunity to exploit, the conversion
of their entrepreneurial competencies to entrepreneurial intention wont be influenced by their age.

DISCUSSION AND CONCLUSIONS

The aim of the current study was to investigate if the age of the entrepreneurs moderate the relationships
between entrepreneurial competencies of the individuals and their entrepreneurial intention. The results
indicated that, the translation of the individuals competencies to a great extent is effected by the age of the
entrepreneurs. Specifically, when we consider the moderating effect over the competencies-intention
relationship, the size of the effect is greater on the between self-efficacy-intention path. This indicates that,
when people become older, their self-efficacy is effected by their age more than the other competencies and
being old, it is more possible that the conversion of self-efficacy to the intention being effected by the age.
Other results indicate that being old, it is less probable that the detection of the opportunities by the
entrepreneurs being affected by the influence of the age than other competencies. This finding has an
implication for policy making in the area of the entrepreneurship that, if we provide some possibilities for
the old people to discover the opportunities, they may become intended to become entrepreneurs and add
value to the economics. As we now, today it is a major concern within the countries is the aging of the
population and this finding, shows a hope for making the economies more opportunity maker for the old
people.

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DIRECTIONS FOR FUTURE RESEARCH

The current study investigated the moderating effect of the individuals age on the relationship between
competencies and entrepreneurial intention, the new direction for the researchers can be to investigate if
the moderating effect of the age in the elderly people is greater than the youth or vice versa.
Page | 10 Another direction for the research is the inclusion of the more demographic variables as the moderator in
the competency-intention path and also to investigate their interactive effect on these relationships.

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