Validating Entrepreneurial Intention Questionnaire through Exploratory Factor

Analysis Amongst Management Students

Ms Indira Singh,
Assistant Professor,
Thakur Institute of Management Studies and Research (TIMSR),
indira.singh@thakureducation.org

&
Dr. T. Prasad,
Associate Professor,
National Institute of Industrial Engineering (NITIE)
nitieprasad@gmail.com

Abstract

Ajzen’s theory of planned behavior posits that intentions are the best predictors of any planned
behavior. The study model based on theory of planned behavior was proposed to analyze and interpret
entrepreneurial intentions of management students in Mumbai city. Data was collected through
entrepreneurial intention questionnaire (EIQ) version 3.1. The EIQ includes randomly ordered and
reverse coded variables, measuring the key constructs of theory of planned behavior. The
questionnaire was evaluated by deploying exploratory factor analysis (EFA). The analyses established
that EIQ was an adequate instrument for the study of entrepreneurial intentions with Indian sample.

KEYWORDS: Entrepreneurship, Entrepreneurial Intention, Exploratory factor analysis

1. INTRODUCTION
The current paper assessed the adequacy of Entrepreneurial Intention Questionnaire (EIQ)
(Linan & Chen, 2006) with exclusive Indian sample comprising of final year management students.
An increasing number of studies argue that intentions play a very relevant and important role in the
decision to start a new firm. It is posited in literature that intentions precede actual behavior. The
purpose of the study is to evaluate the adequacy of the instrument in a differing cultural setting as
according to Gjersing et al (2010) a previously validated instrument does not necessarily mean it is
valid in another culture or time. The objective of this paper is to test the validity of the instrument
developed by Chen & Linan (2006) for a Brazilian sample. Brazilian culture is different from Indian
culture. The knowledge of the applicability of the instrument is limited and it was suggested that the
instrument be tested in different cultural settings as the results obtained may vary (Linan & Chen,
2006).
The purpose of the paper is to assess the adequacy of EIQ with an Indian sample comprising of final
year management students.

2. DESCRIPTION OF ENTREPRENEURIAL INTENTION QUESTIONNAIRE (EIQ)

The questionnaire was adopted from Linan and Chen (2009) EIQ (ver 3.1). The EIQ was
obtained from the authors on request. Entrepreneurial Intention Questionnaire (EIQ) has thirty eight
items. A set of ten separate nominal scale items are for collecting personal data of the respondent. The
following table presents description of the scales as used in this study. The items were built on 7-point
likert-type scales. (Refer Annexure). The respondents provided answers based on their perception
(Zikmund et al., 2010). Table-1 below provides description of the entrepreneurial intention
questionnaire constructs and the items measuring each construct.

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 TABLE-1 ENTREPRENEURIAL INTENTION QUESTIONNAIRE DESCRIPTION

Construct Abbreviation Items

Entrepreneurial Intention EI A4 , A6, A9 (rev), A13, A 17, A 19 (rev)
Attitude towards behavior ATB A 2 (rev), A 10, A 12 (rev), A 15, A 18
Perceived Behavioral Control PBC A 1, A 5 (rev), A 7, A 14, A 16 (rev), A 20
Subjective Norms SN A 3, A 8, A 11
Closer Valuation CV C 1, C 4, C 7
General Social Valuation GSV C 2, C 3 (rev), C 5 (rev), C 6, C 8 (rev)
Entrepreneurial Capability EC D1, D2, D3, D4, D5, D6
Professional Attraction PA B1, B3
SOURCE: AUTHOR

3. Methodology
Prof. Francisco Linan was duly contacted who kindly provided the questionnaire and gave permission
to use it in the study.
3.1 Data Collection
The questionnaire was distributed to a non probability sample of final semester students doing post
graduation in management enrolled in various b- schools in Mumbai. The questionnaire was filled by
the students during class session with the professor’s permission. The students were asked to
voluntarily fill EIQ. The students on an average took 20 minutes to complete EIQ. The procedure
followed was according to than of Chen and Linan study (2009). Data was collected over a period of
six months. In all 750 questionnaires were returned, 480 questionnaires were usable and therefore
retained for analysis. The response rate obtained was a robust 60%.
4. Prerequisites To Conduct Exploratory Factor Analysis
According to Tabachnik & Fiddell (2001) and Costello & Osborne (2005) for conducting
reliable factor analysis the sample size needs to be big enough. In case of smaller samples the chance
is that the correlation coefficients between items differ from the correlation coefficients between items
in other samples (Field, 2009). The rule of the thumb is a sample of 10- 15 per item in the
questionnaire. The EIQ has 38 items so a sample of between 380 – 570 is adequate. The sample size of
480 in the present study meets this criterion. In order to determine the adequacy of sample for analysis
the Kaiser-Meyer-Olkin measure of sampling adequacy (KMO) is used. The KMO can indicate in
advance whether the sample is large enough to reliably extract factors (Field, 2009). When the
reported KMO is near 1, a factor or factors can probably be extracted, since the opposite pattern is
visible. Therefore, KMO “values between 0.5 and 0.7 are mediocre, values between 0.7 and 0.8 are
good, values between 0.8 and 0.9 are great and values above 0.9 are superb.” (Field, 2009. p. 647). The
KMO value obtained (Table-3) for this dataset fell within the 0.8 – 0.9 range thereby indicating that
the sample data was great for the conduct of exploratory factor analysis.

Table-3 Entrepreneurial Intention Questionnaire (EIQ): KMO and Bartlett’s Test for
determining sample adequacy
Measure Value
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .864
Bartlett's Test of Sphericity
Approx. Chi-Square 10599.198
Degree of Freedom 703
Significance .000

4.1 Construct Definition through Factor Analysis

Exploratory factor analysis in the current study was carried out to study the underlying factor
structure of the data. The factor analysis procedure served to eliminate the items that did not load on

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the expected factor for the sample data in this study. Thus the process served for the depuration of
items.
Therefore principal components analysis with varimax rotation was used to extract the variables and to
detect structure in the relationships between variables. When the loading is less, and cross loading is
observed, such items were deleted from the analysis and were not used for further statistical
consideration. This was done to reduce error and unreliability (Nunnally, 1978). Eigen values and
variance explained were considered as important values in factor analysis done in the present study.
According to Hair et al., (2010) and Straub (1989), factors having an Eigen value more than 1 and
loading of at least 0.40 is considered to be an acceptable result for Principal Component Analysis
(PCA). More importantly the factor structure should be meaningful, useful and conceptually sound
(Pett et al., 2003). In the present study, items with similar loadings on two factors and items with
loadings less than 0.40 were removed in accordance with Chong (2005).

Factor analysis was done with SPSS version 20 software.

The following table-4 displays the items depurated during exploratory factor analysis.

Table-4 List of Depurated Items

ITEM DESCRIPTION RATIONALE LITERATURE
SUPPORT
A4
I am ready to do anything to be Loading 1.010 (Nunnally, 1978).
an entrepreneur.
A5 I believe I would be completely Cross loading (Nunnally, 1978).
unable to start a business
A9 I have serious doubts about ever Cross loading (Nunnally, 1978).
starting my own business
A19 I have a very low intention of Cross loading (Nunnally, 1978).
ever starting a business
The results of the analyses are reported in the table-5 below.

Table-5 Exploratory Factor Analysis and Factor Loadings

Construct Items Factor Communality Eigen Percentage Cronbach’s
Loadings Value Variance Alpha
Component 1 A2 0.852 0.733 10.057 26.4 0.87
(Attitude towards A10 0.847 0.759
Behavior) A12 0.653 0.535
A15 0.771 0.760
A18 0.837 0.724
Component 2 D1 0.697 0.642 3.906 36.7 0.85
(Entrepreneurial D2 0.869 0.644
Capability) D3 0.516 0.626
D4 0.519 0.559
D5 0.741 0.587
D6 0.681 0.555
Component 3 A1 0.739 0.605 3.077 44.8 0.70
(Perceived A7 0.740 0.655
Behavioral Control) A14 0.654 0.640
A16 0.776 0.594
A20 0.685 0.558
Component 4 A6 0.525 0.646 2.246 50.7 0.79
(Entrepreneurial A13 0.662 0.623
Intention) A17 0.842 0.791

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Component 5 C2 0.626 0.653 1.779 55.4 0.79
(General Social C3 0.811 0.673
Valuation) C5 0.814 0.685
C6 0.474 0.467
C8 0.820 0.648
Component 6 B1 0.487 0.704 1.613 59.6 0.87
(Professional B3 0.402 0.650
Attraction)
Component 7 A3 0.884 0.745 1.192 62.8 0.78
(Subjective Norms) A8 0.863 0.745
A11 0.663 0.605
Component 8 C4: 0.817 0.683 1.038 65.5 0.70
(Closer Valuation) C7: 0.881 0.757

5. Discussion
Exploratory factor analysis is a widely deployed statistical procedure in social science research. The
procedure was deployed to find out the underlying factor structure. The exploratory factor analysis was
carried out on items A1 to A20, items B1 to B4, Items C1 to C8 and items D1 to D6 together. Items
A4, A5, A9 and A19 were depurated because of cross loadings. The exploratory factor analysis has
shown some interesting results for the sample data. The objective of exploratory factor analysis was
met as the process extracted expected eight constructs. Therefore adequacy of the questionnaire was
established for the sample. The analyses also served to eliminate the items that do not load on the
expected factor for the sample data.
Therefore the remaining items would be used to build the constructs in the structural equation model as
the next level of data analysis.
The exploratory factor analysis extracted eight factors for the sample data. The entrepreneurial
intention questionnaire has eight constructs. Therefore it was inferred that the data is adequate for
further analyses. The same was also inferred from the KMO value (0.86) that indicated robust data. A
total of four items (A4, A5, A9, A19) were depurated during the procedure because of cross loading
and low eigen value. The EIQ as evaluated with sample of management students emerged reliable and
construct valid with the sample. The items measure the same underlying construct. All items are
adequately contributing towards the construct validity of the entrepreneurial intention questionnaire
(EIQ).

6. Conclusion

The results of EFA show that five items relate with attitude towards behavior (ATB) construct, six
items with entrepreneurial capability (EC), five items with perceived behavioral control (PBC), three
items with entrepreneurial intention (EI), five items with general social valuation (GSV), two with
professional attraction for entrepreneurship (PA), three with subjective norms(SN) and two with closer
valuation (CV). These items and constructs will be put through confirmatory factor analysis (CFA)
through structural equation modeling (SEM).

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 Annexure: Entrepreneurial Intention Questionnaire
Dear Respondent,
I seek your response for a research study that I am working on. Kindly respond to all the questions.
Your response will be kept confidential. There is no need to disclose your name. Kindly read the
instructions carefully before answering. Your time and cooperation through expressing your opinion is
crucial for successful completion of the study. Thank you very much for your cooperation.
A. Indicate your level of agreement with the following statements about the Entrepreneurial
Activity from
(1) Meaning total disagreement (TDA) to (7) meaning total agreement (TA).
1-Total 7-Total
2 3 4 5 6
Disagreement Agreement
A 1. Starting a firm and keeping it
viable would be easy for me.
A 2. A career as an entrepreneur is
totally unattractive to me
A 3. My friends would approve of
my decision to start a business
A 4. I am ready to do anything to
be an entrepreneur.
A 5. I believe I would be
completely unable to start a
business
A 6. I will make every effort to
start and run my own business
A 7. I am able to control the
creation of a new business
A 8. My immediate family would
approve of my decision to start
a business
A 9. I have serious doubts about
ever starting my own business
A 10. If I had the opportunity and
resources, I would love to start
a business
A 11. My colleagues would approve
of my decision to start a
business
A 12. Amongst various options, I
would rather be anything but
an entrepreneur.
A 13. I am determined to create a
business venture in the future
1-Total 7-Total
2 3 4 5 6
Disagreement Agreement
A 14. If I tried to start a business, I
would have a high chance of
being successful
A 15. Being an entrepreneur would
give me great satisfaction
A 16. It would be very difficult for
me to develop a business idea

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 A 17. My professional goal is to be
an entrepreneur
A 18. Being an entrepreneur implies
more advantages than
disadvantages to me
A 19. I have a very low intention of
ever starting a business
A 20. I know all about the practical
details needed to start a
business

B. Your preferred choice of work option:

1-Total 2 3 4 5 6 7-Total
Disagreement Agreement
B1 I would be an entrepreneur
B2 I would be an employee
B3 Level of attraction (entrepreneur)
B4 Level of attraction (employee)

C. Indicate your level of agreement with the following sentences about the values society put
on entrepreneurship
From (1) meaning total disagreement (TDA) to (7) meaning total agreement (TA).
1-Total 7-Total
2 3 4 5 6
Disagreement Agreement
My immediate family values
C 1. entrepreneurial activity above
other activities and careers.
The culture in my community is
C 2. highly favorable towards
entrepreneurial activity
1-Total 7-Total
2 3 4 5 6
Disagreement Agreement
The entrepreneur’s role in the
C 3. economy is generally
undervalued in my community
My friends value entrepreneurial
C 4. activity above other activities
and careers
Most people in my community
C 5. consider it unacceptable to be an
entrepreneur
In my community,
entrepreneurial activity is
C 6.
considered to be worthwhile,
despite the risks
My colleagues value
C 7. entrepreneurial activity above
other activities and careers
It is commonly thought in my
C 8. community that entrepreneurs
take advantage of others

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 D. How do you rate yourself on the following entrepreneurial abilities/ skill sets? Indicate
from 1 (no aptitude at all) to 7 (very high aptitude).
1-No 2 3 4 5 6 7-Very
aptitude at high
all aptitude
D 1. Recognition of opportunity
D 2. Creativity
D 3. Problem solving skills
D 4. Leadership and communication
skills
D 5. Development of new products and
services
D 6. Networking skills, and making
professional contacts

Personal Data
1. Age (in Yrs.):__________
2. Gender: Male Female
3. You have graduate degree in which of the following:
A) B.A
B) B.Com
C) BSc (Specify subjects______________________________________)
D) Engineering (Specify_______________)
E) Any other (Specify_______________________)
4. What degree or other qualifications are you studying? ______________________
5. Do you have employment experience? Yes/ No. If yes, Experience No. Years______.
6. Do you belong to a family having any business background? Yes No
7. If yes, indicate the nature of your family business. __________________________

8. What level of education have your parents achieved?

Father: Primary Secondary Vocational training University Other
Mother: Primary Secondary Vocational training University Other
9. What are their present occupations?
Pvt Public Self Unemployed Other
Sector Sector employed/Entrepreneur
Father
Mother

10. Roughly speaking, what is the Total income per annumin your household? (Adding up all
revenues from any person living in the household)
A) Up to Rs. 50,000 pa
B) From Rs50,000 to Rs.1,00,000pa
C) From Rs.1,00,000 to Rs.2,00,000 pa
D) From Rs. 2,00,000 to Rs. 3,00,000 pa
E) From Rs. 3,00,000to Rs. 4,00,00 pa
F) From Rs.4,00,000 to Rs.5,00,000 pa
G) Over Rs. 5,00,000 pa

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