The influence of psychological capital on the growth intentions of entrepreneurs: A study on Malaysian SME entrepreneurs

Abstract

Growth of entrepreneurial ventures plays important role in a country's economic development and entrepreneurs' growth intention is considered as an important predictor of their venture growth. On the other hand, Psychological capital (PsyCap) is one such resource which can influence attitudes and behaviours like growth intentions of entrepreneurs. This study is aimed to investigate the relationship between psychological capital and growth intentions of entrepreneurs specifically in Malaysian context. The data was collected from 275 Malaysian SME entrepreneurs and Regression analysis reveals that PsyCap, as a core construct, positively and significantly influences the growth intentions of entrepreneurs. Further, it is also identified that two out of four dimensions of PsyCap (hope and self-efficacy) have significant and positive influence on entrepreneurs' growth intentions. It is also revealed that PsyCap, as a core construct, more powerfully predicts the growth intentions as compared to its first order constructs separately. This finding highlights the significance of PsyCap as a core construct in entrepreneurial researches. It contributes knowledge to psychological capital and entrepreneurship literature and also has implications for existing and prospective entrepreneurs as well as government and private bodies. JEL Classifications: M10

Psychological capital and entrepreneurship: gender differences

“…These findings have practical training implications, as the results suggest that psychological capital variables must be strengthened in both genders, especially in the female population. Thus, as the literature indicates, psychological capital implies behaviours, thoughts and actions that can be learned and developed in people (Bandura, 1997; Luthans et al , 2007a; Hizam-Hanafiah et al , 2017). Therefore, the variables that are part of this capital can in fact be developed through training (Ajzen, 2001; Luthans et al , 2007a; Do Paço et al , 2013).…”

“…In this way, a deeper knowledge of entrepreneurs’ defining personal and psychological traits allows promoting business initiatives (Espíritu-Olmos, 2011). Amongst these characteristics, psychological capital has started to be analysed in entrepreneurial literature, this capital being understood as an individual resource that should be taken into account in entrepreneurship (Envick, 2005; Luthans et al , 2007b; Hizam-Hanafiah et al , 2017).…”

“…Therefore, defining the entrepreneur’s personal traits in richer detail and a more nuanced fashion leads to promoting business initiatives that support women to enter entrepreneurship (Espíritu-Olmos, 2011). These initiatives could strengthen the personal characteristics that are key to women’s motivation to enter entrepreneurship (Bandura, 1997; Luthans et al , 2007a; Varamäki et al , 2015; Hizam-Hanafiah et al , 2017).…”

“…Amongst these personal traits, psychological capital has attracted a surge of interest in entrepreneurial literature, which considers that this capital is an individual resource, needed by entrepreneurs to run their businesses and ensure business success (Envick, 2005; Luthans et al , 2007b; Hizam-Hanafiah et al , 2017). Baluku et al (2016) have found that psychological capital influences behaviour and entrepreneurial success.…”

Psychological Capital (PsyCap) Resources and its Relations with Creative Self-efficacy in Entrepreneurship Students

“…A considerable body of psychological capital research has been conducted so far (Newman et al, 2014), however, only some have investigated PsyCap in entrepreneurs (Pease, Cunningham, 2016), either current or future. Future entrepreneurs to create their own ventures need to develop intention, which Bird (1988) describes as an individual focus on a goal and a path to achieve it (as cited in Hizam-Hanafiah et al, 2017), where PsyCap could serve considerably. Studies show that there are positive relationships of psychological capital, its subscales of hope and self-efficacy with growth intentions of entrepreneurs (Hizam-Hanafiah et al, 2017), and high self-efficacy individuals often choose challenging tasks to improve their performance and cope against all obstacles to meet their goals (Cavus, Kapusuz, 2015, Tang, 2020b); which can lead to higher competitive advantage (Tang, 2020b).…”