Entrepreneurship barriers and entrepreneurial inclination among Malaysian postgraduate students

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Entrepreneurship barriers andentrepreneurial inclinationamong Malaysian postgraduatestudentsManjit Singh SandhuSchool of Business and Economics, Monash University Sunway Campus,Bandar Sunway, MalaysiaShaufique Fahmi SidiqueInstitute of Agricultural and Food Policy Studies, Putra Infoport,Universiti Putra, Selangor, Malaysia, andShoaib RiazSZABIST Dubai Campus, Dubai International Academic City, Dubai,United Arab EmiratesAbstractPurpose Postgraduate students who are more mature and have greater job experience are morelikely to be inclined towards entrepreneurship. However, postgraduate students face various barrierssuch as lack of funds, fear of failure and lack of social networking that may hinder theirentrepreneurial inclination. The barriers faced by these postgraduate students may also exhibitdifferent dimensions compared with barriers faced by existing entrepreneurs. This study aims toexamine the relationship between perceived barriers to entrepreneurship and entrepreneurialinclination.Design/methodology/approach Based on a survey-based methodology, data were collected from asample of 267 postgraduate students from various Malaysian universities. Respondents perceptiontowards five barriers to entrepreneurship (aversion to risk, fear of failure, lack of resources, lack of socialnetworking, and aversion to stress and hard work) and their entrepreneurial inclination were assessed.Findings The model R-squared indicated that 31.5 percent of the variation in the entrepreneurialinclination is explained by the five perceived barriers. The highest ranked barrier to entrepreneurshipwas lack of social networking followed by lack of resources and aversion to risk.Research limitations/implications The findings in this study cannot be generalized tonon-student populations since it covers only postgraduate students. The quantitative approach usedwas unable to uncover in-depth information on the various barriers. A qualitative approach may bemore appropriate to obtain further details.Originality/value This research provides interesting insights into the entrepreneurship barriersfaced by postgraduate students from a developing nation where such research is lacking.Keywords Entrepreneurialism, Postgraduates, MalaysiaPaper type Research paperIntroductionEntrepreneurship is receiving more attention in the area of business research (Davidssonand Wiklund, 2000; Low, 2001; Shane and Vekataraman, 2000; Venkataraman, 1997).The current issue and full text archive of this journal is available atwww.emeraldinsight.com/1355-2554.htmIJEBR17,4428Received November 2010Accepted November 2010International Journal ofEntrepreneurial Behaviour &ResearchVol. 17 No. 4, 2011pp. 428-449q Emerald Group Publishing Limited1355-2554DOI 10.1108/13552551111139656It is one of the driving forces for the achievement of economic development and jobcreation (Gorman et al., 1997 and Brockhaus, 1991). Policymakers, academics, andresearchers agree that entrepreneurship is a vital route to economic advancement forboth developed and developing economies (Zelealem et al., 2004). Todays smallbusinesses, particularly the new ones, are the main vehicle for entrepreneurship,contributing not just to employment, social and political stability, but also toinnovative and competitive power (Thurik and Wennekers, 2004).In Malaysia, the development of entrepreneurship, in both concept and activity, isalso becoming more important. The importance of entrepreneurship to the growth ofMalaysian economy is evident by the number of supporting mechanisms and policiesthat exist for entrepreneurs; including funding, physical infrastructure, and businessadvisory services. The establishment of a special ministry for entrepreneurs (Ministryof Entrepreneur Development Malaysia) in 1995 highlights the priority the governmentplaces on entrepreneurship and entrepreneurs development. The establishment of theministry is also timely considering the change in employment landscape in Malaysia.Graduate unemployment is becoming a major problem in Malaysia and it was reportedthat the number of unemployed graduates is approximately 36,669 in 2005 (ClarenceNgui, 2005). The data also suggest that economic growth is now creating fewer jobsthan it used to and this makes it more difficult for people to compete for jobs.One of the solutions to the graduate unemployment problem is to enterself-employment or establish their own businesses. Studies have shown thatpermanence and employment longevity is no longer a significant feature of careerpaths (Fallows and Steven, 2000) and the changing nature of career prospects in largeorganizations has resulted in graduates becoming more interested in starting their ownbusiness. However, difficulty in finding stable employment is not a strong enoughfactor that will lead to graduates becoming entrepreneurs. Research on entrepreneurialbehaviors indicates that there are specific personality characteristics that distinguishentrepreneurs from non-entrepreneurs. There are also many barriers faced bygraduates in order to become entrepreneurs. Thus, in order to formulate effectivepolicies to curb graduate unemployment, we need to have a thorough understanding ofthe factors influencing entrepreneurial inclination and also the barriers toentrepreneurship. Understanding these barriers to entrepreneurship will also assistpolicymakers in formulating strategies to mitigate or remove these barriers in order toincrease entrepreneurial activities.Research problemDespite a vast amount of studies on the attitude towards entrepreneurship, findingsremain inconclusive (Kim, 2008). Most studies examining students attitude orperception towards entrepreneurship and barriers are focusing on developed countries(Krueger et al., 2000 (USA); Guerrero et al., 2008 (Spain); Koh, 1995 (Hong Kong); Koh,1996 (Hong Kong); Tan et al., 1996 (Singapore); Audet, 2002 (Canada); Crant, 1996(USA); Kolvereid, 1996 (Norway); Tkachev and Kolvereid, 1999 (Russia); Gnoth, 2006(New Zealand); Wang and Wong, 2004 (Singapore); Robertson, 2001 (UK) and Vecianaet al., 2005 (Puerto Rico and Catalonia)). Out of these studies only one focused onpostgraduate students (Koh, 1996) and the study was not comprehensive since itcovered a single university and was conducted in a developed nation. Very few studieswere found in Malaysia (Ramayah and Harun, 2005; Mohar et al., 2006) and these onlyEntrepreneurshipbarriers429focused on undergraduate students and collected the entire data in individualuniversities. Furthermore, these studies did not examine barriers but factorsinfluencing entrepreneurial intentions.There are limited entrepreneurship studies covering developing countries. Barriersfaced by budding entrepreneurs from developing countries may differ from those indeveloped countries. This is because developed countries may have more institutionalsupport and an education system that is more advanced thus reducing potentialbarriers. According to the recent Global Entrepreneurship Monitor Report 2007, theproportion of early stage entrepreneurs who will engage in full time business aremostly from developed countries (Bosma et al., 2007). All the countries that scoredmore than 80 percent were developed nations such as Italy, Puerto Rico, Greece, Spainand Slovenia with the exception of China and Romania (Bosma et al., 2007). Malaysiawas not included in this study. So, this suggests that there might be more barriers toentrepreneurship in the developing countries as compared to the developed countries.Studies that examine budding entrepreneurs should also focus more onpostgraduate students since they might be more inclined towards entrepreneurship.Most postgraduate students are more mature and have greater experience and forsome, the purpose of enrolling in a postgraduate program is to prepare them to ventureinto business. However, postgraduate students with stable and good paying jobs mayalso be reluctant to change their status. This is among the many barriers that willinhibit them from venturing into business. Undergraduate students on the other handare young and may not have the experience and are more reluctant to take risk. So,there is a need to conduct more research on intentions of postgraduate students andthis research is an attempt to close this gap by providing further insights andinformation on barriers faced by postgraduate students in a developing country.Research objectivesThe main objectives of this study are:. To determine postgraduate students overall perception of their entrepreneurialinclination.. To determine the impact of perceived barriers to entrepreneurship onentrepreneurial inclination.. To determine the relationship between selected demographic and personalfactors and entrepreneurial inclination.Literature reviewThere is no formal definition of entrepreneurship due to lack of consensus on it (Zhao,2005). Kim (2008) stated that defining entrepreneurship and entrepreneur is a difficultand intractable task. However, we have identified several definitions that we feel haveaptly describe entrepreneurship in the literature and are applicable to our study. Onestream of literature looks at entrepreneurship from the strategic managementperspective. For example, Miller (1983) defined entrepreneurship as an organizationallevel phenomenon that focuses on innovation, risk-taking and proactiveness. Earlierdefinitions of entrepreneurship also focus on the willingness of entrepreneurs toengage in calculated business-related risks (Brockhaus, 1980). This implies that lack ofwillingness to undertake risk can be seen as a barrier to entrepreneurship.IJEBR17,4430Another stream looks at entrepreneurship from the perspective of individuals whereit tends to focus on the orientation, attitude and behavior of entrepreneurs (Miles et al.,1993). Inclination towards entrepreneurship which is a central issue in our study canalso be viewed as the intention to venture into business (Low and MacMillan, 1988; DePillis and Reardon, 2007). Ronstadt (1984, p. 28) defined entrepreneurshipas:NORMALthe dynamic process of creating incremental wealth. This wealth iscreated by individuals who assume the major risks in terms of equity, time, and carriercommitment of providing value for some product or service. The product or serviceitself may or may not be new or unique but value must somehow be infused by theentrepreneur by securing and allocating the necessary skills and resources.Thedefinition highlights the importance of skills and resources and these factors arecrucial to this study as its absence can be considered as barriers towardsentrepreneurship.Theories and past studies on entrepreneurshipThere are various theories that have been identified in the literature that explainfactors influencing entrepreneurial intention and barriers to entrepreneurship.However, there still exists very little consensus on which theory is the mostcomprehensive since each focuses on different areas and attributes. The psychologicalschool of thought focuses on personality traits such as need for achievement, locus ofcontrol, risk taking ability etc. (McClelland, 1987; Dyer, 1994; Rotter, 1966). The Theoryof Planned Behaviour (TPB) (Ajzen, 1987; Ajzen, 1991) has been used by numerousauthors to explain intentions to become entrepreneur (Krueger et al., 2000; Audet, 2002;Kolvereid, 1996; Tkachev and Kolvereid, 1999; Engle et al., 2010). According to TPB,entrepreneurship behavior is intentional or in other words peoples intention mayinfluence behavior towards becoming an entrepreneur. Shaperos (1982) EntrepreneurEvent Model is another intentional based model but based on the perception of thedesirability and feasibility to act upon opportunities (Shapero, 1982). People who havehigh levels of desire to become entrepreneurs may ultimately not act upon theirintentions due to certain barriers that may exist. It is important to clearly identify suchbarriers. Institutional economic theory is another theory that explainsentrepreneurship motives and focus on informal factors such as attitudes, norms ofbehavior (Krueger and Brazeal, 1994) and formal factors such as policies, laws,regulations, government assistance, culture etc. (North, 1990). Then there is the socialnetworking theory that argues that entrepreneurship can thrive when people haveaccess to business networks (Singh et al., 1999; Singh, 2000). Through socialnetworking, entrepreneurs can obtain resources, information, business contacts whichare vital for their success and sustainability (Neergaard et al., 2005; Granovetter, 1992;Burt, 1997). In some countries, social networks are initiated by the government and aretherefore formal units facilitating collaboration between entrepreneurs (Farr-Whartonand Brunetto, 2007). However, these social networks may or may not exist amongbudding entrepreneurs such as postgraduate students.Numerous other background factors related to social factors such as previousemployment (Storey, 1982), family background (Scott and Twomey, 1988; Matthewsand Moser, 1995) gender (Buttner and Rosen, 1989; Kolvereid et al., 1993) education(Storey, 1992) ethnic membership (Aldrich, 1980), and religion (Weber, 1930) have alsobeen discussed in the literature on entrepreneurship. Altogether, the combination ofEntrepreneurshipbarriers431psychological traits and specific background factors make some individuals morelikely entrepreneurial candidates than others. Some researchers have specificallystudied student populations and found that there are certain factors such as educationthat affect students more than others (Wang et al., 2001; Scott and Twomey, 1988).According to Turnbull et al. (2001), the major motivational factors for students tobecome entrepreneurs are opportunity to take risks, freedom, financial gain, andsecurity of employment and control.In summary, some of the common barriers faced by entrepreneurs are psychologicalin nature such as: aversion to risk, fear of failure, aversion to stress and hard work.Then there are also the institutional barriers from the institutional school of thoughtsuch lack of resources and lack of government assistance. Lack of social networking isalso another barrier faced by entrepreneurs based from the social networking theory(Taormina and Lao, 2007; Luo, 1997). We argue that barriers faced by actualentrepreneurs may be different from barriers faced by budding entrepreneurs. Pastresearch shows that, barriers faced by actual entrepreneurs are mostly confined toinstitutional barriers such as lack of government assistance, lack of funds,infrastructure issues, lack of training, poor contract and property laws andcorruption (Kiggundu, 2002; Chu et al., 2007; Ivy, 1997; Benzing et al., 2009). On theother hand, barriers faced by budding entrepreneurs are mostly psychological(Taormina and Lao, 2007). The barriers selected for this study are from thepsychological school of thought, institutional and social networking theory. This is dueto the fact that these constructs are more relevant to the unit of analysis postgraduate students. Demographic characteristics were also included into the modelto make it more comprehensive. A detail discussion of these variables is provided inthe next section.Aversion to riskStudies have shown that risk construct dominates literature on entrepreneurship andthe ability to bear risk has been identified as the primary characteristic facingentrepreneurs (Van Praag and Cramer, 2001; McClelland, 1987 and Koh, 1995).However, there is no uniformity in the conclusions from these studies. Segal et al. (2005)in a study covering 114 business students in the USA found tolerance for risk asignificant factor influencing entrepreneurial intentions. Sexton and Bowman (1984)and Begley and Boyd (1987) only offer modest support for differences in risk-takingpropensity. Busenitz (1999) argued that the higher risk taking propensity ofentrepreneurs has not been empirically supported. Several studies covering studentsfound that aversion to risk was a barrier to entrepreneurship (Wang and Wong, 2004;Lane, 2002; Scott and Twomey, 1988; Henderson and Robertson, 1999). However, thesestudies mostly covered undergraduate students.According to Hofstede (1980) societies with low uncertainty avoidance encourageindividuals to be ambitious and competitive, to strive for material success, and to takerisk for material gain. On the other hand, societies with high uncertainty avoidanceexpect the individuals to avoid risk-taking behavior for a material gain. Since Malaysiahas a society with very high uncertainty avoidance, it can be assumed that Malaysiansare averse to risk that comes with entrepreneurship (Hofstede, 1980; Hofstede andBond, 1988). Thus, on the basis of the above controversial findings and by applyingIJEBR17,4432Hofstedes (1980) concept of uncertainty avoidance to the Malaysian context, thefollowing hypothesis is developed:H1. Aversion to risk has negative influence on entrepreneurial inclination ofpostgraduate students.Fear of failureFailure and entrepreneurship go hand-in-hand. According to the GlobalEntrepreneurial Monitor, fear of failure is the top reason given worldwide byaspiring entrepreneurs for not starting their own businesses (Bosma et al., 2007). Thebiggest reason that the majority of people do not go into business is the fear that theywill fail (Business Venture Advice, 2007). Other research by Henderson and Robertson(1999), in a UK university found that students who were not entrepreneurially inclinedwere afraid of failure. This is likely to be true for postgraduate students in Malaysiasince majority are working and may perceive failure as shameful. Based on Hofstedesstudy on cultural values, uncertainty avoidance in Malaysia is considerably highcompared to other developed nations such as Singapore (Hofstede and Bond, 1988).Thus, high uncertainty avoidance is seen as an indicator of high fear of failure amongMalaysians. Thus, in line with these empirical evidences, the following hypothesis isestablished:H2. Fear of failure has negative influence on entrepreneurial inclination ofpostgraduate students.Lack of social networking and resourcesWhile motivation may drive individuals to engage in the behavior necessary to start abusiness, entrepreneurship research demonstrates also that availability of resources isan important determinant of entrepreneurial process. Some of the critical resources thatimpact the success of start-ups include financial capital, access to markets andavailability of information (Deakins et al., 1997; Basu, 1998; Ven et al., 2007; Szilagyiand Schweiger, 1984)According to Ramayah and Harun (2005), capital access is one of the most difficultimpediments to the growth of entrepreneurial ventures. Entrepreneurs who are settingup a new business face the obstacles of getting funds and financing in a bankingsystem where collaterals and track records are required (David and June, 2001; Cressey,2002). In addition, when directly questioned in interviews, potential entrepreneurs saidthat raising capital is their principal problem (Blanchflower and Oswald, 1998).Research by Edward and Chooi (2007) in Malaysia also reported that lack of funds is ahurdle faced by small and medium sized companies. Studies covering students alsoreveal that lack of funds is a barrier to entrepreneurship (Turnbull et al., 2001; Lane,2002; Henderson and Robertson, 1999; Robertson et al., 2003; Li, 2007).Social and organizational networks are also important for new start-ups. Socialnetworks are a significant portion of an entrepreneurs social capital and also serve toenhance the return on human capital such as intellect and education (Burt, 1997). Theimportance of these network ties is underscored by findings that in many countriesincluding transitioning economies such as Bulgaria (Manev et al., 2005) as well asindustrialized ones such as Holland (Bosma et al., 2004), human and social capital havebeen shown to impact small business performance. In China, Guanxi (socialEntrepreneurshipbarriers433networking) is a vital factor in building long term business relationship and to reduceunexpected risk (Taormina and Lao, 2007; Luo, 1997; Luo, 2000; Yeung and Tung,1996). However, importance of favorable business environment was found to be amore important factor as compared to social networking in a study conducted amongChinese respondents (Taormina and Lao, 2007). Social networking may be particularlysignificant in the early stages of a start-up where internal resources are frequently verylimited ( Jones and Jayawarna, 2010). We argue that in a developing country such asMalaysia, social networking is an important factor in influencing entrepreneurialactivities. As such lack of social networking can hinder entrepreneurial intentions.Thus, in line with these findings, the following two hypotheses are established:H3. Lack of social networks has a negative influence on the entrepreneurialinclination of postgraduate students.H4. Lack of resources has a negative influence on the entrepreneurial inclinationof postgraduate students.Aversion to stress and hard workIt is evident that the process of entrepreneurship initiates the demand for workassignments, interpersonal relations and social obligations. Uncertain or unknownmatters create anxiety which in turn causes stress in many people, as opposed to themore universal feeling of fear caused by known or understood threats. Henderson andRobertson (1999) in a study of students found that those who did not express theintentions of becoming entrepreneurs claimed that they want to live a family life andentrepreneurship involves too much work. Cultures vary in their avoidance ofuncertainty, creating different rituals and having different values regarding formality,punctuality, legal-religious-social requirements, and tolerance of ambiguity. Asmentioned before that there is high degree of uncertainty avoidance in Malaysiansociety (Hofstede, 1980). Thus, it is appropriate to say that Malaysians are more averseto stress therefore they have high degree of uncertainty avoidance. Thus, the followinghypothesis is developed:H5. Aversion to hard work and stress has negative influence on entrepreneurialinclination of the students.It is important to highlight that according to a study covering 337 buddingentrepreneurs in China, psychological characteristics were found to have moreinfluence on entrepreneurial inclination or intention as compared to external factorssuch as social networking, resources etc. (Taormina and Lao, 2007).Demographic and personal factors as barriers to entrepreneurial intentionsWang and Wong (2004) in their studies on university students in Singapore found thatgender, family, business experience and education level had significant influence onintention to do business. Female were found to be less interested in entrepreneurshipthan males. Several studies found that higher education influences individuals tobecome entrepreneurs (Rees and Shah, 1986; Evans and Leighton, 1989; Bates, 1990).These studies support the Lucas (1978) model that human capital enhancesindividuals managerial capabilities and increases propensity to be self employed.However, Schiller and Crewson (1997) found that higher level education deters entryIJEBR17,4434into self-employment since higher education can allow the person into the high wagesector. There are other studies that show positive relationship between workexperience and self employment (Bates, 1990; Schiller and Crewson, 1997). However,Evans and Leighton (1989) found that for the first 20 years, experience does notinfluence people to become entrepreneurs and age is also not a major factor. Miller(1984) found that young people tend to take riskier occupations. Apart from traditionaldemographic factors (age, income, educational level and gender), this study will alsocover other personal factors (marital status, work status, degree type) relevant to theMalaysian context and Malaysian post graduate student profile. In line with this thefollowing hypothesis is developed:H6. Demographic and personal factors (such as age, income, educational level,gender, marital status, type of degree etc.) influence entrepreneurial inclination.Conceptual frameworkThe conceptual framework for this study is based on the intention based models,psychological school of thought and institutional theory (Figure 1).MethodologyData collection and sampleA survey based methodology was used in this research to obtain data from postgraduatestudents at various academic institutions. The target population in this study consists ofpostgraduate students studying at universities offering postgraduate education inMalaysia. Based on the list obtained from the Malaysian Ministry of Higher Education,there are 20 public and 19 private universities altogether in this country. Out of the total,only seven public universities and ten private universities are offering postgraduateeducation. Stratified random sampling technique was employed to select the respondentsfrom the targeted universities. Stratification was done based on the number ofFigure 1.Schematic diagram of thetheoretical frameworkEntrepreneurshipbarriers435postgraduate students in each university in the sample. Nine hundred and fifty sixself-administered questionnaires were distributed to all 17 universities identified and 267(27.9 percent) responses were successfully obtained from the following universities:Universiti Utara Malaysia, University of Malaya, International Islamic UniversityMalaysia (IIUM), Monash University Malaysia, University Putra, Nottingham University-KL Campus, Universiti Tun Abdul Razak, University Putra Malaysia, Curtin UniversityMalaysia, University Malaysia Sabah and University Malaysia Sarawak.The questionnaire is divided into three sections. Section 1 comprises questionseliciting demographic and other personal characteristics. Section 2 comprises 35statements eliciting information on the following barriers to entrepreneurship:. Lack of resources six items (adapted and modified from Ramayah and Harun,2005; Henderson and Robertson, 1999; Robertson et al., 2003).. Aversion to stress and hard work 12 items (adapted and modified from Sparksand Cooper, 1999; Taylor et al., 1997).. Lack of social networking six items (adapted and modified from Taormina andLao, 2007; Yeung and Tung, 1996).. Aversion to risk six items (adapted and modified from Koh, 1995; Segal et al.,2005; Wang and Wong, 2004).. Fear of failure five items (adapted and modified from Henderson andRobertson, 1999; Scott and Twomey, 2001).Section 3 comprises eight statements (adapted from Yusof et al., 2008; Taormina andLao, 2007, Ramayah and Harun, 2005) eliciting views on the students entrepreneurialinclination. A five-point Likert scale is used in Section 2 and 3 where the respondentswere required to state the extent of agreement or disagreement with the statements inthe questionnaire.Data analysisRespondents backgroundTable I reports the demographic characteristics of the respondents. The summarystatistics indicate that 70 percent of our respondents are males. A majority of therespondents are between the age of 26 to 30 years old and are unmarried.Approximately 95 percent of the respondents are currently pursuing their mastersdegree and 69 percent are taking business related degree. Sixty-five percent of therespondents are enrolled as full-time students and almost half of the respondents arenot employed. Approximately 19 percent of the employed respondents earn betweenRM1,000 to RM3,000 per month.Entrepreneurial inclinationTable II shows the mean values and frequency values (in percent) of the items thatdepict the entrepreneurial inclinations of the respondents. High mean values (.3.7)were obtained for all the seven items indicating that majority of the respondents havehigh inclination towards becoming an entrepreneur. The percentage of respondentsthat answered SA and A was more than 65 percent for all the items againindicating positive inclination towards entrepreneurship. The mean scores were muchbetter as compared to past research covering undergraduates and actualIJEBR17,4436entrepreneurs. For example, research covering US and Chinese students showedweaker intention for venture creation with mean scores of less than 3.0 on a five-pointLikert scale (Lee et al., 2006). Students from Korea and Fiji showed slightly betterentrepreneurial inclination with mean scores of 3.34 and 3.12 respectively (Lee et al.,Variables Frequency %GenderMale 187 70Female 80 30AgeBelow 20 years 1 0.40Between 21 and 25 years 60 22.50Between 26 and 30 years 108 40.40Between 31 and 35 years 47 17.60Between 36 and 40 years 28 10.50Marital statusSingle 164 61.40Married 98 36.70Others 5 1.90Education levelDoctorate 14 5.20Masters 253 94.80Degree typeBusiness 184 68.90Non-business 83 31.10Work statusEmployed 145 54.30Unemployed 122 45.70Student statusFull-time enrolled 174 65.20Part-time enrolled 93 34.80Monthly incomeNot earning 122 45.70Less than RM1,000 19 7.10B/w RM1,000 and RM3,000 51 19.10B/w RM3,001 and RM5,000 40 15Table I.Demographiccharacteristics ofrespondentsItems Mean % SA and ADesire to start own business 3.8 70Always inclined towards entrepreneurship 3.7 66Vision of becoming an entrepreneur 3.9 78Dream of owning own business 4.0 81Entrepreneurs are highly respected 3.7 67Starting own business in five to seven years time 3.8 71Planning own business is part of career plan 3.8 72Table II.EntrepreneurialinclinationEntrepreneurshipbarriers4372006). Other research in Turkey examining actual motivation of small and mediumfirms found mean score values of less than 3.4 (Benzing et al., 2009).Factor analysisWe conducted the Kaiser-Mayer Olkins (KMO) measure of sampling adequacy testand Bartletts test of sphericity to assess the suitability of the survey data for factoranalysis (Hair et al., 1998). The results of the KMO measure of sampling adequacy andBartletts test show that the data meet the fundamental requirements for factoranalysis. The KMO measure of sampling adequacy is 0.85 and the Bartlett test ishighly significant. Factor analysis with principal component analysis and Varimaxrotation was then used to group the entrepreneurship barrier variables into severalcommon factors. The results are reported in Table III. In order to control the number offactors extracted, a minimum eigenvalue of one was used in the factor analysis. Factorswith eigenvalue less than one were considered insignificant and were excluded. Thefactor analysis generated eight factors as solution and five were found to haveFactors Items Factor loading1. Avoidance of stress 0.546Thought of stress leads to restlessness 0.699Fear of stress 0.739Low performance under stress 0.614Aversion to hard work 0.749Difficulties in managing hard work 0.688Hard work negatively affects life 0.730Hard work is not good for health 0.567Eigenvalue 6.898Percentage variance 13.862. Avoid risky venture 0.526Prefer job security than risky business 0.684Business ventures are uncertain and risky 0.693Prefer income with risk of financial loss 0.745Eigenvalue 2.838Percentage variance 9.063. Embarrassment from failing in business ventures 0.580Fear of failure is a barrier 0.521Eigenvalue 2.183Percentage variance 7.734. Lack of social networking makes it difficult to start new business 0.550Good social network increases the probability of success 0.726Social networking is important for new business 0.779Eigenvalue 1.750Percentage variance 7.015. Non-availability of funds 0.607Will start business only with easy access to funds 0.618Skills are needed for business ventures 0.660Eigenvalue 1.592Percentage variance 5.94Table III.Factor analysis ofentrepreneurship barriervariablesIJEBR17,4438meaningful relationships and were therefore, retained. The factors retained areinterpreted as follows:F1. Aversion to stress and hard work (stress).F2. Aversion to risk (Risk).F3. Fear of failure (Fear).F4. Lack of social networking (Network).F5. Lack of resources (Resource).Factor loadings were also used to compute new variables called factor scores. Thesescores are composite measures indicating the degree to which an individual score isranked on a particular factor based on their responses to the variables included in thatfactor (Hair et al., 1998). These scores will be used in our multiple regression model toanalyze the relationship between entrepreneurial inclination and barriers.Reliability analysisCronbach coefficient alpha values were calculated for all the factors generated todetermine the internal consistency of the scale used. According to Sekaran (2003),Cronbach alpha is a reliability coefficient that indicates how well the items arepositively correlated to one another. The closer Cronbach alpha is to 1, the higher theinternal consistency. Cronbach alphas for all the factors were 0.6 and above confirmingthe internal consistency of the constructs. Results are shown in Table IV.Regression analysisThis section developed a multiple regression model to examine the effects of perceivedbarriers and demographic characteristics on entrepreneurial inclination. The multipleregression model is depicted as follows:ENTICi b1STRESSi b2RISKi b3FEARi b4NETWORKi b5RESOURCEi b6MALEi b7MALAYi b8CHINESEi b9INDIANi b10AGEi b11MARRIEDi b12DOCTORi b13BUSi b14WORKi b15INCOMEi eiFactor Number of items Cronbach alphaStress 8 0.841Risk 4 0.721Fear 2 0.625Network 3 0.639Resource 3 0.600Entic 7 0.850Table IV.Reliability analysisEntrepreneurshipbarriers439where:MALEi Male (yes 1, no 0);MALAYi Malay (yes 1, no 0);CHINESEi Chinese (yes 1, no 0);INDIANi Indian (yes 1, no 0);AGEi Age;MARRIEDi Married (yes 1, no 0);DOCTORi Doctoral student (yes 1, no 0);BUSi Business related degree (yes 1, no 0);WORKi Employed full-time (yes 1, no 0);INCOMEi Income;b Parameters; andei Error term.Table V presents the multiple regression results. The model R-squared implies that29.4 percent of the variation in entrepreneurial inclination is explained by theindependent variables. The results indicate that all the entrepreneurship barriervariables are statistically significant at 1 percent level. The dummy variables forMALE and MARRIED are statistically significant at the 5 percent level. The negativecoefficient for STRESS indicates that aversion to stress and hard work reduces theinclination to engage in entrepreneurial activities. The coefficients for RISK and FEARsuggest that aversion to risks and fear of failure also reduces entrepreneurialinclination. All the hypotheses concerning barriers proposed in this study are thusaccepted. However, only two demographic variables; MALE and MARRIED areVariables Coefficient Std. errorSTRESS 20.264 0.054 * *RISK 20.208 0.053 * *FEAR 20.177 0.053 * *NETWORK 0.267 0.053 * *RESOURCE 0.216 0.054 * *MALE 0.290 0.119 * *AGE 20.063 0.054MARRIED 0.378 0.136 * *DOCTOR 0.180 0.243BUS 0.007 0.121WORK 20.269 0.167INCOME 20.009 0.056Observations 267R-squared 0.294Notes: *Statistically significant at the 5% level; * *Statistically significant at the 1% levelTable V.Multiple regressionresultsIJEBR17,4440statistically significant in our model. The positive coefficient for MALE suggests thatmale students are more inclined towards entrepreneurial activities. The positivecoefficient for MARRIED suggests that married students are more inclined to involvethemselves in entrepreneurial activities.Discussion and conclusionsThis research has both theoretical and policy implications. This research is the firstcomprehensive study covering the barriers to entrepreneurship among postgraduatestudents in a developing country. Various psychological, institutional anddemographic barriers are included to make this research more rigorous. Thefindings support the literature and conclude that those barriers to entrepreneurshipfaced by students and budding entrepreneurs from developed countries also apply todeveloping countries. Aversion to risk was found to be a barrier for postgraduatestudents in Malaysia and this confirms past studies in other developed countries (Koh,1996; Wang and Wong, 2004; McClelland, 1987). Postgraduate students are much olderand experienced and may have family and financial commitments which may makethem more risk averse. Malaysia is categorized as a society with high uncertaintyavoidance and as such it is not surprising to find its people avoiding risks. Fear offailure was also another important barrier highlighted and this supports past studies inthe UK (Henderson and Robertson, 1999) and the Global Monitor Index 2007 (Bosmaet al., 2008). This may be a more relevant factor to postgraduate students of whom themajority in this research were fully employed and such failure can be seen asdegrading. Postgraduate students in Malaysia were also found to be averse to stressand hard work and these factors negatively effects entrepreneurial inclination. Thisfinding confirms past research conducted among undergraduates in the UK(Henderson and Robertson, 1999).With regard to institutional factors, this study also found that lack of resourcesand social networks were a hurdle to entrepreneurship. This supports pastresearch conducted in other developed countries covering both students well asbudding entrepreneurs (Deakins et al., 1997; Basu, 1998; Burt, 1997; Manev et al.,2005 and Bosma et al., 2004). This is not surprising since developing countriesmay not have proper institutional support in the form of government assistance orother specialist advice to support budding future entrepreneurs as compared tomore developed nations. The Ministry of Entrepreneur and Co-operativeDevelopment in Malaysia provides various funding schemes and programmes toentrepreneurs. However, it is unknown if the Ministry provides special schemes topostgraduate entrepreneurs. There are also funds available from local financialinstitutions through products such as micro credit schemes. However, the ease ofobtaining funds and whether entrepreneurs with postgraduate qualifications aregiven special preference are other issues that require further investigation. Variousfinancing requirements such as the need for collateral or guarantors can also be amajor barrier. Thus, more in-depth research is required to investigate theinstitutional support that is provided by the government and private sector beforeconcrete conclusions can be made. It is anticipated to find that lack of socialnetworking to be a barrier towards entrepreneurship. Most business relationshipsin Asia tend to rely heavily on social networking and this is also evident in theMalaysian business environment.Entrepreneurshipbarriers441The demographic variables included in this research are very comprehensive andrelevant to the Malaysian context. Marital status and gender were found to beimportant factors influencing entrepreneurial inclination. The result indicate that malepostgraduate students are more inclined towards entrepreneurship compared to femalestudents. Married students will also be more likely to engage in entrepreneurialactivities after graduation. Although married persons usually have more commitmentsand tend to be more risk averse, they are also more mature and this probably explainstheir inclination towards entrepreneurship. However, other demographic variablessuch as age, income, higher education, business-related degrees and work status werefound not to influence entrepreneurial inclination. This was counter to past findings byWang et al., 2001, Rees and Shah (1986), Bates (1990), Lucas (1978), Schiller andCrewson (1997) and Evans and Leighton (1989). The majority of postgraduate studentsin this research were young (less than 40 years of age) and in line with past studies thatfound that for the first 20 years inclination towards entrepreneurship is lower (Evansand Leighton, 1989). Past studies also showed that those with higher education are ableto command higher wages and thus may not be inclined towards entrepreneurship(Schiller and Crewson, 1997). Postgraduate students in this study seem to have similarattitude. It is surprising to find that the type of degree has no influence onentrepreneurial inclination. This is against past findings that report positiverelationship between students majoring in business courses and entrepreneurship(Yusof et al., 2008). Most probably this is because postgraduate students are moremature and even non-business post graduate students are exposed to business in theirworking life.This study clearly revealed that the inclination towards entrepreneurship amongpostgraduate is high. The mean scores obtained were much higher (above 3.7) ascompared to past research covering undergraduates (Lee et al., 2006) and actualentrepreneurs (Benzing et al., 2009). Therefore, there is further potential to nurturethese educated individuals to become successful entrepreneurs and lead the wayforward in fulfilling the governments vision in promoting entrepreneurship among itspeople. Having high entrepreneurial intention alone may not be enough since thedesirability must be converted into action. Thus, there is an urgent need for thegovernment to focus their attention to mitigate the personal/psychological barriers thatis preventing postgraduates from becoming entrepreneurs. Table VI indicates that thehighest ranked barrier in this study is lack of social networking. The next highestranked barrier to entrepreneurship is lack of resources, followed by aversion to risk,aversion to stress and hard work, and fear of failure. This shows that even buddingentrepreneurs such as postgraduate students need social networking to motivate themor spur entrepreneurial activities.Mean SDNETWORK 3.784 0.696RESOURCE 3.522 0.725RISK 3.146 0.721STRESS 2.768 0.735FEAR 2.758 0.918Table VI.Ranking of barriersaccording to meanIJEBR17,4442To reduce personal barriers, the government needs to focus more on the readiness andmotivational aspects of budding entrepreneurs by offering selective specializedtraining programmes. To enhance funding and social networking the governmentneeds to ensure enough funds are allocated to budding entrepreneurs and create amechanism to enhance social networking among industry players and postgraduatestudents. It is important for the government and universities to understand how todevelop and nurture potential entrepreneurs even while they are still students.Activities to improve education, infrastructure, legal conditions and financial supportfor potential business founders should be further expanded. A proper support system,entrepreneurial education and the development of managerial competencies, and newgovernment policies may go a long way in making graduates to succeed in theirentrepreneurial ventures. Policies should also be formulated to increase governmentefforts to create awareness towards entrepreneurship through training programs andnot only financial support.LimitationsThe findings in this study cannot be generalized to non-student population since itcovers only postgraduate students. The quantitative approach used was unable touncover in-depth information on the various barriers. Qualitative approach may bemore appropriate to obtain further details. For example, face to face interviews canreveal in greater detail why social networking is important to influenceentrepreneurship.Future research directionsFuture researchers should focus their attention on postgraduate students that haveventured into business and compare those successful with the unsuccessful ones. Sincesocial networking was found to be an important aspect in this research, future studiesshould also investigate the link between social networking and entrepreneurialsuccess. In addition, it is also important to find out how others barriers identified inthis study are tackled by budding postgraduate students. It would also be interestingto conduct an extensive in-depth research using a qualitative approach on thedifferences between various ethnicities and their inclination towards entrepreneurshipand their perceived barriers. The importance of social networking among thecommunities should be further investigated in detail. 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His research interest spans a widevariety of topics such as knowledge economics/knowledge sharing, foreign direct investment,e-banking, competitive advantage of firms, economics of entrepreneurship, leadership, e-learningetc. Some of his research papers have been published in refereed journals such as Journal ofWorkplace Learning, New England Journal of Entrepreneurship, Knowledge Management Review(UK), Malaysian Journal of Distance Education (USM), Malaysian Journal of EducationalTechnology, Asian Journal of Distance Education, Journal of Contemporary ManagementResearch, Journal for the Advancement of Science and Arts and Journal of Asia Entrepreneurshipand Sustainability. He actively participates in international conferences and has presented papersin Indonesia (2002), Oman (2003), Turkey (2006) and Romania (2008). Manjit Singh Sandhu is thecorresponding author and can be contacted at: manjit.singh@buseco.monash.edu.myShaufique Fahmi Sidique is a senior lecturer in economics at Universiti Putra Malaysia. Hereceived his doctoral degree in agricultural economics from Michigan State University in 2008.Prior to this, he was a member of the business faculty at Universiti Tun Abdul Razak, Malaysia.He teaches principles of economics, environmental economics and agricultural finance. Hisresearch interests include environmental economics topics such as non-market valuation ofenvironmental services, and recycling and solid waste management.Shoaib Riaz joined Shaheed Zulfikar Ali Bhutto Institute of Science and Technology(SZABIST) Dubai Campus (International Academic City, Dubai) as a lecturer (Faculty ofManagement Sciences) in 2008 after completing his MBA from Tun Abdul Razak University(UNITAR), Malaysia a member university of AACSB. Prior to this he used to work in thehuman resources department of one of the leading corporations of Pakistan. His research interestspans the areas of Marketing, Human Resource Management, and Entrepreneurship.Entrepreneurshipbarriers449To purchase reprints of this article please e-mail: reprints@emeraldinsight.comOr visit our web site for further details: www.emeraldinsight.com/reprints