Determinants of Entrepreneurial Intentions of Youth: The Role of Access to Finance

Abstract

This study aims to highlight the role of access to finance as one of the determinants on the decision to enter into entrepreneurship of students regarded as potential entrepreneurs. For achieving our main objective, we created a questionnaire. As a method of analysis, we run the least square logistic regression, with entrepreneurial intentions as a dependent variable and knowledge, education and availability of financial resources as predictors. We also included gender, university and locality as control variables. The sample is formed of 181 students from two universities from the North-Eastern region of Romania. The results reveal that access to finance is a significant determinant of the decision to enter into entreprenenruship for young people. Moreover, we show that the relation between access to finance and entrepreneurial intentions changes according to gender, university and locality of origin. Female students’ entrepreneurial intentions are influenced by the availability of bank loans and personal savings, while in case of male students - only by the availability of funds coming from family and friends. The funds coming from family and friends also determine students' entrepreneurial intentions coming from rural or urban areas. Entrepreneurial intentions are negatively related to education for male students and those coming from an economic profile university, and positively related to business knowledge only for students from rural areas. The results obtained could be important for financial resources providers (because they offer insight into how easy access to finance stimulates the entrepreneurial intentions of youth), for education providers (who can adapt their training programs and extracurricular activities to strengthen entrepreneurial intentions), and for decision makers (which may adopt appropriate policies to stimulate the economic development of an area).

Entrepreneurship education on entrepreneurial intention: The moderating role of the personality and family economic status

“…While previous studies have primarily focused on the positive side of family background, such as role modeling by entrepreneurial family members (Lee et al, 2021;Zhang and Huang, 2021), this study focuses on the negative aspects. Entrepreneurship education will improve students' understanding of entrepreneurship, but it also means that students will realize the high risks and investment of entrepreneurship, which requires a good family economic foundation (Rusu et al, 2022). This study argues that poor families may induce timidity, even for students with increased entrepreneurial knowledge and improved entrepreneurial ability.…”

“…High uncertainty is one of the characteristics of entrepreneurship (McMullen and Shepherd, 2006), and it also necessitates the acquisition of initial funds by entrepreneurs (Calic and Mosakowski, 2016). Research has shown that the family is an important source of start-up capital (Elston et al, 2016), especially for young college students (Rusu et al, 2022). The implementation of entrepreneurship education will assist students in acquiring corresponding entrepreneurial knowledge, allowing them to gain a preliminary understanding of the capital needs and risks involved in the entrepreneurship process.…”

“…Family economic status also plays a key role in improving entrepreneurial intention by offering financial security (Rusu et al, 2022). Most students lack financial capital and resources, which creates obstacles to entrepreneurial entry (Wright et al, 2006).…”

“…Most students lack financial capital and resources, which creates obstacles to entrepreneurial entry (Wright et al, 2006). Seeking assistance from families has become an important approach to solving financial problems for entrepreneurs, especially youth (Sieger and Minola, 2017;Rusu et al, 2022). However, there has been little quantitative analysis that how family economic status influences the effect of entrepreneurship education.…”

Economic analysis of institutional factors influencing the entrepreneurial level of young adults in Poland. Evidence from conjoint experiment

“…The assessment of young adults ' entrepreneurial intentions and behaviour determinants has been thoroughly analysed in various scientific research papers. A continuous reviving of the topic is absolutely necessary (Rusu et al. , 2022; Owczarek and Wiktorowicz, 2018).…”