A Meta-Theoretical Approach into the Determinants of Internal Psychological Resources for Entrepreneurs

Abstract

This study, which was conducted in the context of a Small Island Developing state economy, adopts exploratory, meta-theoretical, and inter-disciplinary stances to examine determinants of internal psychological resources for entrepreneurs. It contributes to existing literature and methodology through its innovative interdisciplinary theoretical framework and the use of Exploratory Factor Analysis (EFA) in the field of entrepreneurship. Questionnaires were randomly distributed among 711 entrepreneurs, of which 539 were deemed useful for analytical purposes. EFA was used to identify factors that determine fundamental internal psychological resources for entrepreneurs. The Kaiser-Meyer Olkin coefficient of 0.85 justified the sample size for the use of EFA. The highly significant Barlett’s test (p<0.0001) showed the presence of adequately correlated items to form clusters. A coefficient of 0.00033 on the inverse of correlation matrix ruled out the possibility of multicollinearity issues among the six key EFA constructs of internal psychological resources for entrepreneurs. Inner Strength which originates from the field of medicine is surprisingly revealed as the leading internal psychological resource valued by entrepreneurs, followed by Entrepreneurial Aspirations, Entrepreneurial Alertness, Entrepreneurial Orientation, Self-leadership, and Risk Orientation. Two other concepts (Psychological capital and Sense of Coherence) which were initially included in the theoretical framework were eliminated during the EFA because the Scree plot did not support their retention and contributed to multicollinearity issues. This study has several practical and policy implications which will enable governments and entrepreneurs to contribute more effectively and more accurately to the entrepreneurial process.