Emergence of Entrepreneurs by Facing Financial Distress: The Mediating Mechanism of Entrepreneurial Motivation

Abstract

The purpose of this research study is to examine the phenomena that led to rise in entrepreneurs post COVID-19 pandemic, Inflation and unemployment; how financial distress in Pakistan lead to entrepreneurial motivation, and to advance the study in domain of motivation that makes someone opt for entrepreneurship. The results of the study provide a means to understand how financial distress is linked with entrepreneurial behavior to startup ventures. The study also entails how entrepreneurial motivation turns into entrepreneurial behavior in presence of boundary condition of financial self-efficacy. The research study has different theoretical, practical and economic implications as well. The theory of entrepreneurship embeds the study model explaining the casual relations of the variables. Data sample has been collected from 200 entrepreneurs at three points of times. At T1 data was gathered for financial distress, at T2 data was gathered for entrepreneurial motivation and at T3 data was gathered for financial self-efficacy, entrepreneurial intentions and entrepreneurial behavior. Results of hypothesis test shows that financial distress has positive impact on Entrepreneurial intention and has not impacted Entrepreneurial behavior positively, Entrepreneurial motivation positively impacted Intention and behavior. Therefore, the study provides important insights into unexplored drivers of financial distress towards entrepreneurial motivation and intention and behavior contributing existing literature pertaining to entrepreneurial motivation. The study has uncovered fruitful aspects of entrepreneurship for future study.