Enhancing Entrepreneurial Self-Efficacy (ESE)
Research Paper Title:
“Enhancing measures of ESE to incorporate aspects of place: Personal reputation and place-based social legitimacy”
Authors:
Helen Pushkarskaya (Yale School of Medicine)
Michael W.-P. Fortunato (Creative Insight Community Development)
Nicole Breazeale (University of Kentucky)
David R. Just (Charles H. Dyson School of Applied Economics and Management)
Background:
Scholars have invested a lot of time in understanding Entrepreneurial Self Efficacy (ESE) of successful entrepreneurs and their practices in urban ecosystems where business interaction tends to be impersonal and transactional. Current measures of ESE do not take into account the effects of place on ESE. Most current ESE measures assess either individual characteristics or place-based characteristics. It is argued by the authors that the ability of entrepreneurs to navigate social networks within the relevant communities is a core component of ESE. How entrepreneurs see themselves in relation to the local community and how they believe others in the community see them is integral to entrepreneurial potential. Especially in tight-knit communities, personal reputation is paramount and the perceived ability of entrepreneurs to navigate complex social networks is key to creating a successful venture. The self-efficacy of entrepreneurs cannot be viewed in isolation from the environment in which they operate.
Methodology:
A new dimension of ESE, the ability to elicit response from the community (ERC), is used to evaluate the fit between individuals and their community. ERC is used to complement existing measures of ESE that focus on skills necessary to execute specific business functions.
Sample: Most of the research was conducted in the state of Kentucky. Focus group of members of a statewide entrepreneurship program was used to get feedback. Semi-structured interview of small groups of rural Kentucky residents was conducted and surveys were sent out to 12000 Kentucky households from 79 (out of 120) counties.
Sample Size:
Focus group with 8 members of statewide entrepreneurship program.
Survey response of 1481 residents (12.3% response rate) of which 1402 were usable.
Analytical Approach:
1- Exploratory Factor analysis (EFA) with Principal Axis Factoring and Promax rotation with Kaiser Normalization.
2- Confirmatory Factor analysis (CFA) using AMOS 24.
3- Stepwise Linear Regression
Results:
The result of analysis conducted suggests that in tight-knit relational communities with rigid social norms, the ability of entrepreneur to become socially embedded is a critical resource that can have a significant positive impact on venture success. To proceed with a business idea, entrepreneurs need to have faith in their ability to navigate the social network and need to develop positive reputation within the community. The ability to elicit respect in community is therefore an integral part of ESE scale.
Conclusion:
Place-based entrepreneurship research highlights the critical role of the local community in shaping what entrepreneurs can accomplish. The analysis revealed that ERC is an integral dimension of ESE, not only in rural setting but also urban setting. Since Kentucky is a mostly rural state and even the urban areas in Kentucky retain many features of small-town America, the results of the study may not be applicable to larger and wealthier urban centers. Further research is required to determine the specific characteristics of a place that make ERC relevant.