The influence of personal attitude and social perception on women ...

Int. J. Entrepreneurship and Small Business, Vol. 27, Nos. 2/3, 2016

The influence of personal attitude and social perception on women entrepreneurial intentions in micro and small enterprises in Indonesia Grisna Anggadwita* and Wawan Dhewanto School of Business and Management, Bandung Institute of Technology, Jl. Ganesha 10, Bandung, 40132, Indonesia Email: [email protected] Email: [email protected] *Corresponding author Abstract: Indonesia has a broad potential to encourage women entrepreneurship. This paper aims to analyse the role of personal attitude and social perceptions to explore women entrepreneurial intentions who are involved in MSEs. Psychological characteristics and individual competencies are posited as the basis of analysis. Respondents are 222 women entrepreneurs involved in MSEs in Indonesia. This study uses quantitative method with the analysis of structural equation modelling (SEM) to test the hypothesis. The results indicate that personal attitude as mediator of women entrepreneurial intentions are significantly influenced by psychological characteristics and individual competencies; while psychological characteristics are proved to have influence on individual competencies. The study also shows that social perception is not directly influencing the intention, yet significantly influencing personal attitude. Studies on the women entrepreneurs are still quite limited, so the study is expected to contribute to the existing literature on women entrepreneurship research. Keywords: women entrepreneurship; women entrepreneurial intention; personal attitude; social perception; MSEs; structural equation modelling; SEM; psychological characteristics; individual competencies. Reference to this paper should be made as follows: Anggadwita, G. and Dhewanto, W. (2016) ‘The influence of personal attitude and social perception on women entrepreneurial intentions in micro and small enterprises in Indonesia’, Int. J. Entrepreneurship and Small Business, Vol. 27, Nos. 2/3, pp.131–148. Biographical notes: Grisna Anggadwita obtained her Bachelor degree in the Department of Electrical and Communications from Telkom Institute of Technology Bandung, Indonesia. She continued her graduate studies in Management Science at the School of Business and Management, Bandung Institute of Technology, Indonesia. She received her scholarship from Tanoto Foundation when she continued her study. She became a Research Assistant in Interest Group of Entrepreneurial and Technology Management at the School of Business and Management, ITB. Currently, she joined as a Lecturer at the Faculty of Economic and Business, Telkom University, Indonesia. Her research interests are: technology management, women entrepreneurship, business incubator, and innovation management.

Copyright © 2016 Inderscience Enterprises Ltd.

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G. Anggadwita and W. Dhewanto Wawan Dhewanto obtained his Bachelor degree in the Department of Industrial Engineering at the Institut Teknologi Bandung (ITB), Indonesia. He received his Huygens Scholarship to continue his study in Faculty of Technology, Policy and Management at the Technische Universiteit Delft (TU Delft), Netherlands. He was awarded the Australian Development Scholarship (ADS) and finished his PhD at Faculty of Business and Economics, Monash University, Australia. He joined at the School of Business and Management (SBM) Institut Teknologi Bandung (ITB), Indonesia in 2004 and he has been involved in developing the Entrepreneurship and Technology Management (ETM) Research Group. He has become the head of that Research Group since 2012. His research interests are technology commercialisation, innovation cluster and entrepreneurship.

1

Introduction

Research on women entrepreneurs today is one of the important issues in the world, based on data from the global entrepreneurship monitoring (GEM), activities of women entrepreneurs increase from year to year and become drivers of economic growth. However, in Indonesia the number of women involved in the business sector is still small compared to men. Meanwhile, in 2012 the number of entrepreneurs in Indonesia reached 1.56%, this number is still far from the ideal number. Therefore, the Indonesian Government sought to encourage entrepreneurship programme with several government programmes including the National Entrepreneurship Movement, and today it has delivered many new entrepreneurs with an increase in the number of entrepreneurs in 2013 accounted for 1.65%. However, the involvement of women as entrepreneurs is still very limited, the number of women entrepreneurs is still less than 0.1% of the total population in Indonesia. Today, the percentage of women in Indonesia has reached 49.96% of the population (242 million) (BPS, 2013). So, Indonesia has broad potentials to develop women entrepreneurs. Women development as entrepreneurs is closely linked to the development of MSEs. MSEs in Indonesia possess roles as good starting points for the mobilisation of women talent as entrepreneurs. In fact, the number of women as entrepreneurs or business owners in some developing countries is far more in the MSEs Sector rather than large enterprises. MSEs Sectors are essential for economic growth of a country, and almost all countries in the world have realised the importance of the sector. Intention is an early predictor of a behaviour, so that more research is needed on the factors that influence an individual’s intention to behave entrepreneurial. The purpose of this study is to identify the factors that influence of women entrepreneurial intention in running the business based on the theory of planned behaviour by Ajzen (2005). Where the focus of this study is the intention is influenced by personal attitudes and social perceptions. Some of the factors that influence personal attitudes of women entrepreneurs also addressed in this study are psychological characteristics (Baum et al., 2001; Yusof et al., 2007) and individual competencies (Man et al., 2002). The research method uses a quantitative approach. Questionnaires are distributed and responses are gathered from 222 women entrepreneurs in Indonesia. The responses are analysed by using structural equation modelling (SEM).

The influence of personal attitude and social perception

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This paper is divided into several sections. The second section contains the literature review and theoretical framework of this study. The third section is the research methodology. The fourth section is analysis and research results. The fifth section contains a discussion of the results from the study. The final section concludes this research with the limitations and further research.

2

Literature review and theoretical framework

2.1 Entrepreneurship Entrepreneurship is an attitude that reflects the motivation and the ability to identify and generate new value or add value to something that has already existed for economic success (Ajzen, 1991; Shapero and Sokol, 1982). Currently, the term of entrepreneur is often equated with the small business owner. According Dana (1995), entrepreneur is an individual who establishes and manages the business for the main purpose of profit and growth. The behaviour of entrepreneurs characterised by innovative behaviour and practice of strategic management in business. Meanwhile, small business owner is an individual who establishes and manages the business for the main purpose of advancing their personal goals (Dana, 1995). Business should be the main source of income and will consume most of one’s time and resources. Thus, not every small business is entrepreneurial and not every entrepreneur running a small business. According Danhof (1949), the types of entrepreneur consist of: the drone, the fabian, the initiative, and innovative. Then, Cole (1959) also identifies the type of company that consists of imitating, innovative, and repetitive. The phenomenon that occurred in Indonesia was like this, where the type of business mostly SMEs imitate, innovative, and repetitive. Currently, creativity and innovation is a key to success for entrepreneurs, especially women entrepreneur for continuity of business by continuing to produce something new and attractive to the public, so as to produce a profit and business growth. Various of motivation a person to be an entrepreneur. Based on research conducted by Dana (1996), self-motivated person to be self-employed is a high need achievement, innovativeness, and the ability to take calculated risks. Based on Walker and Brown (2004), the motivations of women entrepreneurs is a financial factor (profit and wealth creation) and non-financial (be the boss, have free time for personal activities, the flexibility of business structure in accordance with the values and objectives of entrepreneurs). Based on research conducted by Ramadani et al. (2013), the motivation of women entrepreneurs is freedom and control in decision-making, profit, need for achievement, and the opportunity to work exclusively for themselves as the main motives and reasons to start an entrepreneurial career. Motivation social status appears as less important motive. Based on research conducted by Eurochambres (2004), the motivation of women entrepreneurs is to have control and freedom in the decision process, the realisation of profits and wealth creation, self-realisation, in order not to work for others, having faith in the products/services offered in the market, social status, and other motives.

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G. Anggadwita and W. Dhewanto Motives for having a private business of women entrepreneurs

Source: Eurochambres (2004)

2.1.1 Women entrepreneurship Women entrepreneurs are women who participate in the total entrepreneurial activities and have motivation to success. They are able to take risks and able to identify opportunities to combine resources in a unique way and take advantages from the business they do. Women entrepreneurs have multiple roles, especially for those who are married. As housewives, they have to take care of their children and they also have significant roles in economic growth. Thus, the challenges for women are greater compared to men. Based on research Ramadani et al. (2013), women entrepreneurs are an important source of economic growth, where they are able to create new jobs for themselves and others, providing different solutions for the management, organisation and business problems and constraints as well as the exploitation of business opportunities. So, the importance of conducting research on women entrepreneurs to explore more about the potential that can be developed by the women entrepreneurs. Productive activities of women aim as an effort to empower them economically and enable them to contribute more to economic growth. Women in entrepreneurial activity mostly involved in the home business for the production of micro, small, and medium enterprises (MSMEs), or formal and informal sector (ILO, 1998). Entrepreneurial activity of women is not only for their economic needs but also have a positive social impact for the women themselves and their social environment (UNIDO, 2001). In some countries, women do not have the same opportunities with men. In many transition countries, progress has been made to provide education and healthcare for women, but the economic and political opportunities for women entrepreneurs remain limited. Therefore, efforts are needed to enable women entrepreneurs to make better economic choices and to transform their business into a competitive company, generate income and employment opportunities through increased production (OECD, 1997).


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To start a business, women face considerable challenges. Education and professional experience have a significant role in the success of business creation and survival (Dolinsky et al., 1993). Childcare responsibilities, family commitments, and lack of information about some parameters such as business development, skilled labour, effective networking capabilities, and business training opportunities are also indicated as an important obstacle in the growth of their business (Roomi et al., 2009). The barriers faced by women entrepreneurs not only come from external factors, but also the internal factors. Sometimes, women have a strong desire to conduct entrepreneurial activity, but they do not have confidence in their ability so their parenthesise of intentions. Therefore, the importance of this study is to show that women have adequate entrepreneurial competencies to succeed in business. In addition, social perception is also have a considerable role in encouraging entrepreneurial women. This is because, the environment and the public perception can help the development and sustainability of the business of women entrepreneurs. Support from the social environment will have an impact on the spirit of women entrepreneurs to succeed. To encourage interest and female entrepreneurial initiatives, the identification of women entrepreneurial intention is needed. Identification includes factors that encourage women, especially in Indonesia to successfully become a woman entrepreneur. According Tašaminova (2012), government support is needed both material and immaterial, it encourages women to undertake economic activity.

2.1.2 Women entrepreneurship in Indonesia Currently, there is lack of data on the number of women entrepreneurs in Indonesia. According to the State Minister for Cooperatives and Small and Medium Enterprises Indonesia, the majority of Indonesian women involved in the MSME sector reaching to 60% (SWA, 2013) of the total number of MSMEs in Indonesia. Based on The Global Gender Gap Report 2013, Indonesia was ranked 95 of 136 countries surveyed (WEF, 2013). Although gender gap index (GGI) does not explicitly focus on women entrepreneurs, however, this index might be helpful to make a forecast about the development of women entrepreneurs in Indonesia. This index is designed to measure gender-based gaps in access to production resources and opportunities in the countries studied in four fundamental categories: women’s participation in economic activities and opportunities they have, their participation in the education, health and safety of women, and political empowerment of women. Furthermore, according to the gender inequality index (GII), developed by the United Nations Development Programme (UNDP), Indonesia ranks 106 of 186 countries in the world. Meanwhile, Indonesia among ASEAN countries ranked last, while Singapore and Malaysia was ranked 1 and 2 (UNDP, 2013). This index is constructed by three dimensions: labour markets, empowerment, and health childbirth. Two main issues of gender equality for women in Indonesia is the lack of access to education and equality in the payment of wages. Many scientific studies focused only on male entrepreneurial, leaving many unanswered questions about women’s entrepreneurship. Researchers identified a number of reasons for women to become entrepreneurs. Social contribution and desire to help others also has also been identified as a key factor in women who choose to run a business. According to Tambunan (2012), there are four factors that inhibit women to become entrepreneurs in Indonesia, including: low levels of education and no or little access to training, especially who living in rural or remote areas; large household burden;

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still many areas where women hampered to open their own business by the constraints of tradition, customs, culture, religion, legal, and difficulty of credit access to formal financial institutions.

2.1.3 Women entrepreneurs in MSEs in Indonesia Research on women entrepreneurs strongly related to micro and small enterprises (MSEs). Women Entrepreneurs in the MSMEs sector is important for almost all countries in the world, especially for developing countries. In the international market, the majority of the world’s largest companies continue to provide some services to various markets, they buy a lot of components and goods from small companies that serve a particular niche. A study of women entrepreneurs in the MSEs is very important because MSEs have an important role in economic growth. The impact of MSMEs to national GDP is huge. Based on data from Ministry of Cooperatives and Small and Medium Enterprises of the Republic of Indonesia (Ministry of Cooperatives and Small and Medium Enterprises of the Republic of Indonesia, 2013), the number of MSMEs in Indonesia reached 56.5 million units and provide a substantial contribution to the economy in Indonesia, which accounted for 57% on gross domestic product (GDP). Storey (1994) defines SMEs as “companies with relatively small market share which is managed by the owners or part-owners in a personalized way and not through a formal management structure, and act as a separate entity, in the sense of not forming part of a large company or group”. The majority of MSMEs in developing countries are individual businesses, and most of the labour comes from their families so that family relationships dominate, trust and loyalty are important factors in promoting their business. Women entrepreneurs in the MSME sector have an important role in developing the country’s economic sector, reduce poverty, increase employment, and provide a variety of items of daily use at an affordable price. In recent years many developed and developing countries have realised the importance of this sector.

2.2 Women entrepreneurial intentions Several theoretical approaches have been developed to explain why some people becoming entrepreneurs, among them are research on entrepreneurial intentions, realising entrepreneurial ideas into real. Intention can be used as an indicator to measure the planned actions by an individual to perform a behaviour. Bird (1988) defines intention as “a state of mind to direct one’s attention (based on experience and action) toward a particular goal, or a way to achieve something”. According to the literature, women tend to show some weaknesses in entrepreneurial activity than men. Several previous studies have also indicated that discrimination on women is a cause of weakness of women’s entrepreneurship (Carter and Allen, 1997; Weiler and Bernaseck, 2001; Blanchard et al., 2008). However, an important weakness of several previous studies associated with their focus only on the barriers of women entrepreneurs setting up new business but it does not explain the factors that influence their intention to perform entrepreneurial behaviour. This study analysed the influence of personal attitude and social perception on entrepreneurial intentions among women entrepreneurs. In addition, to further deepen the understanding of factors that affect the women entrepreneurial intentions, this study also analyses the factors that influence personal attitudes such as psychological characteristics and individual competencies.


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2.2.1 Personal attitude Attitudes are evaluations conducted by individuals to assess positively or negatively to the objects, people, institutions, events, behaviours or specific intentions (Ajzen, 2005). Personal attitude is obtained from the beliefs of the consequences caused by such behaviour, which is termed behavioural beliefs. In other words, someone who believes that a behaviour can result in a positive outcome, then the individual will have a positive attitude, and vice versa. Attitudes influence the formation of women entrepreneurial intention and assessed as inside dimensions of individual to perform a behaviour. So, the hypothesis this study is: H1 Personal attitude significantly influence women entrepreneurial intention.

2.2.2 Social perception Social perception is outside factors the individual that determine whether others or certain groups will accept or reject behaviours performed by individuals. Social perceptions are defined as individuals’ perception of social pressure to show a behaviour or not. This study analyses the influence of social perception on personal attitude and women entrepreneurial intention, because women tend to be more concerned about public opinion on the formation of the intention to perform certain behaviours. Therefore, the hypotheses established in this study are: H2 Social perception significantly influence personal attitude. H3 Social perception significantly influence women entrepreneurial intention.

2.2.3 Psychological characteristics Psychological characteristics are one of the factors that cause individuals interested in entrepreneurial activity. The scholars have theoretically demonstrated that one’s psychological characteristics are proved to predict entrepreneurial behaviour (McClelland, 1961). Certain psychological trait allows employers to achieve the goal of entrepreneurship (Dana, 1995). In addition, research McClelland also identified that social status is one of the psychological character that encourages entrepreneurial activity. However, various research on the psychological characteristics of entrepreneurs have different categories, such as risk taking, inovativeness, and locus of control. Several previous studies indicated that there are significant influence between psychological characteristics toward entrepreneurship, only two dimensions of psychological characteristics are proven to consistently predict entrepreneurial intentions which are self-efficacy (Zhao et al., 2005), and risk-taking propensity (Gomez-Mejia and Balkin, 1989). Some literatures have also shown a relationship between psychological characteristics of women towards entrepreneurship. Schlosser (2001) found that successful women entrepreneurs demonstrate psychological characteristics such as confidence, determination, hard work, need for achievement and internal locus of control were also found from the psychological characteristics of women.

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Linking between psychological characteristics and the formation of an entrepreneurial attitude is very important for theoretical and empirical reasons, because a person with certain psychological characteristics may have a tendency to take the decision to become an entrepreneur. The psychological characteristics also affect the individual competence. This study analyses psychological characteristics associated with women entrepreneurs such as risk-taking and innovativeness (Brockhaus, 1980), need for achievement (McClelland, 1961), and locus of control (Evans and Leighton, 1989). These psychological characteristics have emerged as the ‘classic’ characteristics associated with entrepreneurial personality (Korunka et al., 2003). Thus, the hypotheses of this study are: H1 Psychological characteristics significantly influence personal attitude. H2 Psychological characteristics significantly influence individual competencies.

2.2.4 Individual competencies Competence has a significant role in the success of entrepreneurship. Entrepreneurial competencies are the capabilities of individuals who are indicated by their knowledge, their contribution to the social and organisational environment, and their success. According to Brownell (2006), individual competencies can be influenced by the social environment and can be learnt through formal education, some individual competencies can also be influenced by personal characteristics, experiences, and career. Some of competence which is the success factors of women entrepreneurs is the ability to build quality relationships with clients; able to formulate objectives, policies and plans and implementation; have the ability to manage their business finances and ability to generate and implement ideas; able to manage marketing activities; and has the ability to manage inventory and implementation of specific business strategies (Ramadani et al., 2013). Man et al (2002) identified six areas of competence related to the ability of entrepreneurs in running business: opportunity competence (the ability to see and identify business opportunities); relationship competence (capabilities in communication, social interaction, and build relationships); conceptual competence (the ability to think analytically, make decisions, solve problems, deal with uncertainties and risks); organising competence (the ability to lead, control, monitor, regulate and develop internal and external resources); strategic competence (the ability to set a vision and mission, and formulate business strategies that will run); and commitment competence (the ability to hold a commitment to the success of the business goals). Studies on the competence of women entrepreneurs are still quite limited. Previous studies indicated that that performance indicators and growth company owned and managed by women are lower than companies owned by men (Neeley and van Auken, 2010). Successful women entrepreneurs demonstrate entrepreneurial competencies such as: taking the initiative, seeing and acting on opportunities, have a strategy, perseverance, high quality work, commitment, efficiency orientation, self-confidence, and persuasion (Kaushik, 1993).


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Therefore, to understand the necessary entrepreneurship competencies for women entrepreneurs in the context of the formation of an entrepreneurial attitude contribute another aspect to the knowledge of entrepreneurial women in developing countries, the hypothesis in this study are: H3 Individual competencies significantly influence personal attitude. Figure 2

3

Theoretical framework

Methodology

3.1 Sample The population in this study are women entrepreneurs in Indonesia. The object area of study is some areas in Indonesia, which are famous for the MSEs industry. The sampling technique used in this study is purposive sampling, because the selected respondents are determined by the following criteria: this study is conducted only on women who run their own business and property; and women who are involved in MSEs sector with the criteria in accordance to the Indonesia Law (UU) No. 20 Year 2008. Criteria for MSEs according to Indonesia Law are: micro-enterprises have assets of less than 50 million IDR and sales revenue per year less than 300 million IDR; and small enterprises have assets 50 to 500 million IDR and sales revenue per year 300 million to 2.5 billion IDR. This study was conducted by survey on women entrepreneurs who run their business in any field and there is no limit on the duration of running the business. Women entrepreneurs in this survey were 222 participants.

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3.2 Data collection and instrument Literature review is conducted to find research gap on research that has not been done before as a new research and to assess theories or result of previous studies which are relevant in this study. As presented in the conceptual framework, there are five variables in this study: women entrepreneurial intentions, attitude toward behaviour, subjective norms, psychological characteristics, and individual competencies. The study adopts measurement variables from Liñan and Chen (2009) and Yusof et al. (2007), and several measurement variables that are added by the author. This study used a questionnaire to collect data and then analysed by SEM to obtain the results of this study. SEM analysis is used because the proposed model consists of multiple interrelated dependence relationship. Moreover, SEM analysis also has the ability to show the unobserved concepts and the relationships that exist within it, and the calculation of the measurement errors in the estimation process (Hair et al., 1998). The questionnaires are divided into several sections. The first section is about the respondents’ profile and their business profile, the purpose is to identify and map the background of respondents. The next section, the respondents were asked to choose statements that best suits them regarding the factors that affect women entrepreneurial intention, the personal attitude, social perception, psychological characteristics, and individual competencies. The measurement data of this study uses a six-Likert scale, ranging from 1 = ‘strongly disagree’ to 6 = ‘strongly agree’. The use of a six-Likert scale with intent to avoid neutral or biased opinion. Distribution and explanation of questionnaires were given directly to the respondents and the results were collected at the same day. LISREL 8.80 program is used for SEM analysis data processing. Analysis of SEM was divided into three measurements: the model measurement, the overall model fit measures, and measurement of the structural model (Hair et al., 1998). 1

The model measurement test result indicates that a variable has a good validity of the construct or latent variable if t-value of loading factors ≥ 1.96 and the standardised loading factors (SLF) ≥ 0.50 (Hair et al., 1995). To measure the reliability of a construct, the value of the construct reliability (CR) ≥ 0.70, and the variance extracted (VE) ≥ 0.50 (Hair et al., 1998).

2

Overall model fit is indicated by the chi-square test was not significant, RMSEA < 0.08, SRMR < 0.05, and NNFI and CFI ≥ 0.90 (Browne and Cudeck, 1993; Hu and Bentler, 1995; Bentler and Bonnet, 1980).

3

Measurement of the structural models was conducted to analyse the causal relationship, the accepted hypothesis is indicated by the t-value of each coefficient ≥ 1.96, and the coefficient is close to zero indicates that the smaller effect relationship.

4

Analysis and result

4.1 Respondent profile Table 1 contains the profile of the respondents and their business profile of the survey results from 222 women entrepreneurs in this study.

The influence of personal attitude and social perception Table 1 No. 1

2

3

4

No. 1

2

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Profile of respondent Profile of respondent Respondent’s age

Education background

Marital status

Number of children

Business profile Business sector

Sales revenue per year

Category

Frequency

Percentage (%)

Less than 25 years

8

3.6

25–35 years

88

39.6

36–45 years

96

43.2

More than 45 years

30

13.5

Primary school

8

3.6

Junior high school

88

39.6

Senior high school

96

43.2

Diploma

30

13.5

Bachelor degree/master/doctor

41

18.4

Single

31

14

Married

176

79.3

Divorce

15

6.8

No children

9

4.7

1–2 children

98

51.3

3–4 children

75

39.3

More than 5 children

9

4.7

Category

Frequency

Percentage (%)

Culinary

105

47.3

Handicraft

9

4.1

Service

35

15.8

Trading

66

29.7

Livestock

2

0.9

Others

5

2.3

Less than 300 million

174

78

300 million–2.5 billion

48

21.6

The results shows that the group of women aged 36–45 years by 43.2% involved in the business sector, the slightly different number is indicated by an age group 25–35 years is as much as 39.6%. 45.5% of women entrepreneurs’ educational background are dominated by senior high school graduates, up to primary level of school education are only 11.3%. The number of women entrepreneurs who have bachelor degree or more is still very limited, the survey indicated 18.4%. This indicates that women entrepreneurs still have the ability and limited knowledge about entrepreneurship, and only to meet the economic needs. Approximately 14% of the respondents are single, 76.1% are married with children, 3.2% are married with no children. A total of 5.9% of the respondents status are divorced with children, 0.9% are divorced with no children. The average numbers of children are approximately 1–4 children. Generally, the single women do business with reasons as an extra income in addition to the primary income; while married women do their business

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because they do not have other jobs and their businesses became main jobs. Thus, this indicates that the majority of women entrepreneurs make effort to help the family economy. Based on the data above, the majority of women entrepreneurs run their businesses in the culinary and trade sectors (fashion, grocery stores, etc.), the rest run their businesses in other sectors. Based on Indonesian Law No. 20 Year 2008 the criteria micro sector sales revenue per year is less than 300 million, 78% of women entrepreneurs are involved in micro sector.

4.2 Measurement model Table 2 shows that there are four indicators of latent variables of women entrepreneurial intentions have passed the test of validity, because these indicators have met the requirements of the SLF ≥ 0.50 and the t-value ≥ 1.96. However, indicator Y4 did not meet the requirements because the value of the SLF < 0.50. Although the t-value indicator Y4 exceeds 1.96, it does not meet the value standards of SLF, so this indicator is removed due to under-represent women entrepreneurial intentions. The reliability test of women entrepreneurial intentions produce good value: CR 0.85 ≥ 0.70, and VE was 0.54 ≥ 0.50, so the variable of women entrepreneurial intentions have good consistency. Table 2

Measurement of observed variables

Component and manifest variable

SLF

t-value

0.74 0.68 0.62 0.48

** 11.79 8.19 5.72

0.61

8.28

0.72 0.66 0.74

** 9.19 11.43

0.54 0.72

7.36 11.13

0.68 0.73

** 9.08

0.82 0.81 0.73 0.73

9.62 9.30 8.39 9.12

CR

VE

0.86

0.56

0.91

0.68

0.93

0.69

Women entrepreneurial intentions Y1 Y2 Y3 Y4 Y5

My professional goal is to become an entrepreneur I am ready to do anything to be an entrepreneur You can only make big money if you are self-employed Being an entrepreneur can be a balance between work and personal life I run the business because of the economic needs Personal attitude

Y6 Y7 Y8 Y9 Y10

Being an entrepreneur is more profitable A career as entrepreneur is attractive for me I’d like to start a firm if I had the opportunity and resources Being an entrepreneur is a great satisfaction for me I prefer to be an entrepreneur among various career options Individual competencies

Y11 Y12 Y13 Y14 Y15 Y16

I was able to see an opportunity to run a business I have the ability to communicate and build networks with others I have the knowledge and skills to develop ideas I have the ability to manage an organisation I was able to set up a strategy to an uncertain condition I have a strong commitment to achieve success

Note: ** = default set by LISREL, t-value was not estimated.

The influence of personal attitude and social perception Table 2

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Measurement of observed variables (continued)

Component and manifest variable

SLF

t-value

CR

VE

0.91

0.78

0.87

0.41

Social perception X1

Your close family support you to run a business

0.63

**

X2

Your friends support you to run a business

0.86

7.13

X3

People around you support you to run a business

0.72

6.70

0.81

**

Psychological characteristics Risk taking and innovativeness X4

I entertain new ideas with enthusiasm

X5

I like to do things that others may not think of

0.86

11.95

X6

I make decision that others call ‘innovative’

0.73

9.79

X7

I am challenged by situations that require creativity

0.56

7.69

X8

I like to do something challenging

0.46

4.62

Need for achievement X9

I like to increase my status and prestige

0.49

5.77

X10

I have high ambition

0.33

4.62

X11

I like to achieve something and get recognition for it

0.38

4.03

Locus of control X12

I have strong control over the direction of my life

0.46

6.01

X13

I believe success depends on one’s own doing

0.39

4.83

X14

I never do things which I am not sure of

0.48

5.51

Note: ** = default set by LISREL, t-value was not estimated.

The result shows that SLF value of the variable personal attitudes, social perceptions and individual competencies ≥ 0.50. And also the overall t-value is above 1.96, so the overall indicator for these variables are valid. Meanwhile, the reliability test result can be seen that the value of CR ≥ 0.70 and VE ≥ 0.50, so that all of the latent variables proved to be reliable and have good consistency. The validity test result of psychological characteristics variable shows that four indicators have passed the test of validity, because these indicators have met the requirements of the SLF ≥ 0.50 and t-value ≥ 1.96. However, indicators of X8–X14 do not meet the requirements because the value of SLF < 0.50. Although the t-value of these indicators exceed 1.96, but does not meet the value standard of SLF, so these indicators are removed due to lack of represent psychological characteristics variable. Reliability test of psychological characteristics variable produce CR ≥ 0.70 and VE < 0.50. So, the psychological characteristics variables have a good consistency although VE less than 0.50, because VE is optional or not required (Hair et al., 1998).

4.3 Structural model Table 3 shows that the NFI and CFI ≥ 0.90 which indicates a good fit. The results of RMSEA are 0.051 ≤ 0.08, which indicates a good fit. AGFI value is 0.82 ≤ 0.90, AGFI values of 0.80 < AGFI ≤ 0.90 showed a marginal fit (Joreskog and Sorbom, 1984). While

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SRMSR value is 0.042 ≤ 0.05 indicated good fit. So, we can conclude that the overall model is a good fit. Table 3 χ2 319.60**

Goodness of fit index for the structural equation model df

RMSEA

SRMSR

NFI

CFI

AGFI

202

0.051

0.042

0.94

0.98

0.82

Notes: N = 222; **p < 0.01; SRMSR = standardised root mean squared residual; NFI = norm fit index; CFI = comparative fit index; AGFI = adjusted goodness of fit index.

Figure 3 is the result of hypotheses that have been proposed. Hypothesis 1 of personal attitude as mediators significantly influence women entrepreneurial intentions (β = .97, p < .001), hypothesis is accepted. While the Hypothesis 2, variable of social perception do not directly influence on women entrepreneurial intention (γ = .20, ns) but significantly influence on personal attitude (γ = .62, p < .001), it is shown on the Hypothesis 3. Hypothesis 4, psychological characteristics significantly proved to influence personal attitude (γ = .19, p < .01), thus, the hypothesis is accepted. Hypothesis 5 shows that the variable of psychological characteristics proved to predict individual competencies (γ = .31, p < .001), hypothesis is accepted. And, the last hypothesis shows that individual competencies significantly influence personal attitude, hypothesis is accepted (γ = .24, p < .01). Figure 3

Structure model

Notes: Standardised coefficients, two-sided significance tests; * = p < .05; ** = p < .01; *** = p < .00.

Thus, personal attitudes are the best predictor for women entrepreneurial intentions directly, and mediate the effects of psychological characteristics and individual competencies. While the social perception proved no direct influence on women entrepreneurial intentions but influence on personal attitude.


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Discussion

Based on the model had formed, the effectiveness of the theory of reasoned action was tested (Ajzen and Fishbein, 1980). Hypothesis 1 personal attitude is proved to have influence on women entrepreneurial intentions (β = .97, p < .001). Personal attitude in this study showed that attitude affects the formation of women entrepreneurial behaviour in Indonesia. Currently, women in Indonesia have quite high entrepreneurial spirit and it influences women entrepreneurial intentions. Although mostly women entrepreneurs are motivated to start their businesses because of economic necessity to meet the needs of their life. However, the results showed that women in Indonesia proved to have experienced an increase in entrepreneurial behaviour, where women currently have a major contribution in improving the economy in Indonesia with a variety of entrepreneurial activities. Hypothesis 2 fail to reach statistical significance in predicting women entrepreneurial intentions (γ = .20, ns). Instead, social perceptions is proven that social perceptions influence personal attitude (γ = .62, p < .001), this is shown on Hypothesis 3. These results are not surprising because some literature indicates that social perceptions are often failed to predict behavioural intention (Armitage and Conner, 2001). The previous study also showed that the social perceptions has weakly contribute to entrepreneurial intentions and not always significant in explaining entrepreneurial intentions (Autio et al., 2001). According to Heuer and Linan (2013), entrepreneurial intentions is acting for themselves rather than for fulfilling expectations of others, even though their motivation for entrepreneurship is influenced by the environment. So, the influence of the social perception on women entrepreneurial intention showed a weak relationship. Personal attitude will improve entrepreneurial behaviour when the social perceptions are strong, and will be attenuated when social perceptions are weak. The variable of personal attitude as mediator of the social perceptions on women entrepreneurial intentions establishes that the perceived social pressure can influence directly on the variable of personal attitude. Women in Indonesia in choosing a career as an entrepreneur consider more on their entrepreneurship goals and their ability in entrepreneurial behaviour, thus, the social perception of the public is sometimes ignored. Hypotheses 4 and 5 are proven, in which psychological characteristic variables significantly influence personal attitudes (γ = .19, p < .01) and individual competencies (γ = .31, p < .001). This is appropriate to a study conducted by Bird (1988) that psychological characteristics and individual competencies influenced entrepreneurial intention, although there was no direct effect and mediated by personal attitude. Brownell (2006) stated that entrepreneurial competence depended on one’s psychological characteristics. Variable of psychological characteristics are divided into sub-variables of risk taking and innovativeness, need for achievement, and locus of control. In the CFA test, only risk taking and innovativeness of the psychological characteristics are proven affecting women entrepreneurial intentions and individual competencies. Some previous studies have shown that women have lower entrepreneurial intentions than men, it is because of the character and competence of women is inadequate to behave entrepreneurial. However, this study shows that women in Indonesia are proven to have character and competence as entrepreneurs. Lastly, Hypothesis 6 is proven, where the variables of individual competencies significantly influence the personal attitude

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(γ = .24, p < .01). Competence is one indicator of the formation of personal attitude, causing the confidence to start a business with their competencies.

6

Conclusions

This study analyses the entrepreneurial intentions of women entrepreneurs perspective. The results of this study serve to validate the relationship between the different elements of the model established as antecedents of entrepreneurial intentions. Contributions to this research show that the factor which influences women entrepreneurial intentions is personal attitude; while personal attitude is influenced by psychological characteristics, individual competence, and social perceptions. Attitudes are influenced by the inside factors of the individual, such as psychological characteristics and competencies. The psychological characteristics of women entrepreneurs in Indonesia are only risk taking and innovativeness which have significant roles in the formation of attitudes on women entrepreneurial intentions. While the social perception is not directly influence women entrepreneurial intention, yet it influences the formation of personal attitude. Based on the results of the study proves that women are not born with lower entrepreneurial intentions than men. They consider not having the ability to perform the role of entrepreneurship whereas women in this study prove to have character and competence as an entrepreneur. Therefore, the promotion of women’s entrepreneurship as an instrument of social choice will be very relevant to solve this problem.

7

Limitation and future research

Indonesia is a multi-cultural country, so the research needs to be done for other factors that influence women’s entrepreneurial intentions such as factors of socio-cultural values, environmental factors, and the importance of educational background. The levels of education for women, especially in rural areas, are only up to elementary school, but a lot of them are successful in business. Thus, it is necessary to study the development of business done by women based on educational background.

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