From entrepreneurial intention to enterprise creation: the case of Estonia

Abstract

Purpose The present paper aims to identify a set of cognitive and contextual characteristics that explain entrepreneurial intentions, actions and venture creation, thereby covering three successive stages of becoming an entrepreneur. Design/methodology/approach The analysis is based on entrepreneurship data from a self-reported online survey (n = 1,492) gathered among the Estonian population in 2017. The authors use an exploratory factor analysis to reduce initial survey responses about the external environment into latent factors. Linear regression models are applied to predict the determinants of entrepreneurial intention and actions, whereas the logit model is applied to find out the determinants of being or not being an entrepreneur. Findings Younger people, respondents with vocational education and the unemployed have a higher intention to start up. Men are more active than women in the second stage of taking real action, whereas middle-aged respondents and managers are less active. In the final stage of enterprise creation, men become more likely entrepreneurs, whereas younger people and those who do not have higher education become less likely entrepreneurs. Entrepreneurial attitudes and competencies as preconditional factors of entrepreneurial readiness have a positive effect in all three stages. The role of motivation appeared to be controversial – it has a weak positive effect on the intention stage but a strong negative effect on the action stage, becoming insignificant in the final stage of becoming an entrepreneur. In the final stage, taking real action has the strongest positive effect. Regarding differences between entrepreneurs and non-entrepreneurs, entrepreneurs have a more positive perception of the business environment and the ease of doing business, including the simplicity of entrepreneurship-related legislation. On the other hand, entrepreneurs are more skeptical about the availability of financial resources, and they perceive public attitudes and the role of entrepreneurs in a society less positively. Research limitations/implications As data of this study originates from a survey, the sample may not represent the whole population. This might limit the extent to which the conclusions of this study can be generalized. Also, the study’s data do not enable us to consider all potential factors that may affect entrepreneurial intention, action and venture creation. For example, the authors do not consider the effect of income or differences between opportunity and necessity entrepreneurship because of data limitations. Practical implications This study focuses on environmental obstacles and individual restrictions that are important in different stages of becoming an entrepreneur. In terms of policy implications, providing better financing opportunities both from private and public institutions and keeping entrepreneurship legislation simple and transparent have the utmost importance in increasing the share of entrepreneurs and entrepreneurship-related benefits in society. The younger population’s high entrepreneurial intentions should be transferred more effectively into real actions toward starting up, paired with supportive entrepreneurship education. Social implications The study results show that developing positive attitudes towards entrepreneurship and providing relevant competencies through the education system are relevant factors in all stages of becoming an entrepreneur, thus enabling entrepreneurial activities in society. Originality/value First, the authors investigate the factors of entrepreneurship separately during the three stages in the journey of becoming an entrepreneur, starting from intentions, followed by preparation actions and finalized by real enterprise creation. Second, the analysis of this study is based on the original Environment-Readiness Entrepreneurship Intention model, which emphasizes the role of the external environment in entrepreneurial processes. Ten factors of the external environment are extracted using exploratory analysis instead of using three traditional predefined factors of the economic, political and socio-cultural environment. Third, our focus on Estonia broadens the knowledge about entrepreneurship in the Central and Eastern European region in general and in the Baltic region, more specifically.

A framework explaining the entrepreneurial intentions of engineering students in public universities

“…Future research can also consider the influence of additional personal traits and skills such as entrepreneurial passion, creativity, interpersonal relationship abilities, and analytical and logical skills on entrepreneurial intent (Cristina, 2016). Comparing how individual traits and entrepreneurial skills differ across groups with different profiles (e.g., gender, age, and employment status) is another relevant extension to the present research (Kallas and Parts, 2020;Saral and Alpkan, 2019).…”

Impact of social environment indicators on students´propensity to do business: Case study from central European countries

“…In this context, Kallas & Parts (2020) found that regarding differences between entrepreneurs and nonentrepreneurs, entrepreneurs have a more positive perception of the business environment and the ease of doing business, including the simplicity of entrepreneurship-related legislation. On the other hand, entrepreneurs are more skeptical about the availability of financial resources, and they perceive public attitudes and the role of entrepreneurs in a society less positively.…”

“…Many studies showed that developing positive attitudes towards entrepreneurship is relevant factor in all stages of becoming an entrepreneur (e.g. Anor Salim et al, 2019;Yousaf et al, 2021;Kallas & Parts, 2020). Financing opportunities both from private and public institutions and keeping entrepreneurship legislation simple and transparent have the utmost importance in increasing the share of entrepreneurs and entrepreneurship-related benefits in society (Kallas & Parts, 2020).…”

“…Anor Salim et al, 2019;Yousaf et al, 2021;Kallas & Parts, 2020). Financing opportunities both from private and public institutions and keeping entrepreneurship legislation simple and transparent have the utmost importance in increasing the share of entrepreneurs and entrepreneurship-related benefits in society (Kallas & Parts, 2020). In this regard the personal perception of social justice in economic environment, particularly, distributive justice, can significantly influence the propensity to participate in any initiatives (Mishchuk et al, 2019).…”

A model analysis on the knowledge, attitude, and readiness of ELVs policy among Malaysians: A cross-sectional study

“…Many studies state that the role of communication or familiarity has a very large role to play in increasing the acceptance of individuals regarding new policies related to vehicles or modes of transportation (Mamat, 2014;Wahab, 2014;Mamat, 2015). However, this concept of communication and civility is very broad and focuses on the individual's perception of the policy and not the knowledge of the policy itself (Chan, 2018;Kallas and Parts, 2021). Until now, there has still been little research that directly reveals the relationship between knowledge and an individual's readiness to accept new policies.…”