ENTREPREURIAL SELF-EFFICACY AND THE LIKELIHOOD OF BEING SELF-EMPLOYED – A COMPARISON OF URBAN AND RURAL AREAS IN VIETNAM
Keywords:Entrepreneurial self-efficacy, Rural and urban entrepreneurship, Self-employed, Vietnam.
A large body of entrepreneurship research has focused on the relationship between entrepreneurial self-efficacy and start-up activity. Yet, little is known about how the interplay of these mechanisms is moderated by informal institutional conditions (e.g., social traits in rural and urban regions). Particularly, Vietnam, a country with a socialist-oriented market economy, has emerged as one of the world’s most entrepreneurial countries. This study examines how the effects of individuals’ entrepreneurial self-efficacy on being self-employed are contingent on institutional environments (e.g., rural and urban areas). Statistical analyses of 2013 to 2015 data from the Global Entrepreneurship Monitor (GEM) project for Vietnam provide empirical evidences that entrepreneurial self-efficacy is significantly and positively associated with being self-employed, and that this effect is more pronounced for individuals in rural than those in urban areas. Moreover, the findings show that people in rural Vietnam are more willing to be self-employed than their peers in urban areas. This difference is explained by the distinct impact of the informal institutional variable, entrepreneurial self-efficacy (e.g., the knowledge, skills, and experience required to start a new business) that individuals living in rural areas may gain from entrepreneurship promotion and start-up programs supported by the Vietnamese leadership. Our findings have implications for national entrepreneurship programs and financial support for start-up projects in rural areas.
Adam-Müller, A. F. A., Andres, R., Block, J. H., & Fisch, C. (2015). Socialist heritage and image on entrepreneurs: Micro-level evidence. Business Administration Review, 75(4), 211-232.
Aidis, R., Estrin, S., & Mickiewicz, T. (2008). Institutions and entrepreneurship development in Russia: A comparative perspective. Journal of Business Venturing, 23(6), 656-672. https://doi.org/10.1016/j.jbusvent.2008.01.005
Aidis, R., & Mickiewicz, T. (2006). Entrepreneurs, expectations and business expansion: Lessons from Lithuania. Europe-Asia Studies, 58(6), 855-880. https://doi.org/10.1080/09668130600830961
Aidis, R., & van Praag, M. (2007). Illegal entrepreneurship experience: Does it make a difference for business performance and motivation? Journal of Business Venturing, 22(2), 283-310. https://doi.org/10.1016/j.jbusvent.2006.02.002
Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2), 179-211. https://doi.org/10.1016/07495978(91)90020-T
Bandura, A. (1983). Self-efficacy determinants of anticipated fears and calamities. Journal of Personality and Social Psychology, 45(2), 464-469. https://doi.org/10.1037/0022-35188.8.131.524
Bandura, A. (1989). Human agency in social cognitive theory. American Psychologist, 44(9), 1175-1184. https://doi.org/10.1037/0003-066X.44.9.1175
Bauernschuster, S., Falck, O., Gold, R., & Heblich, S. (2010). The shadows of the past: Implicit institutions and entrepreneurship (Jena Economic Research Papers No. 2009-044). Friedrich-Schiller University Jena.
Baumol, W. J. (1990). Entrepreneurship: Productive, unproductive, and destructive. Journal of Business Venturing, 11(1), 3-22. https://doi.org/10.1016/0883-9026(94)00014-X
Block, J., & Sandner, P. (2009). Necessity and opportunity entrepreneurs and their duration in self-employment: Evidence from German micro data. Journal of Industry, Competition and Trade, 9(2), 117-137. https://doi.org/10.1007/s10842-007-0029-3
Brooksbank, D., Thompson, P., & Williams, R. (2008). Entrepreneurial attitudes, intentions and activities – A comparison of urban and rural areas in Wales. International Journal of Entrepreneurship and Small Business, 6(3), 421-436. https://doi.org/10.1504/IJESB.2008.019136
Davidsson, P. (1995a). Culture, structure and regional levels of entrepreneurship. Entrepreneurship & Regional Development, 7(1), 41-62. https://doi.org/10.1080/08985629500000003
Davidsson, P. (1995b). Determinants of entrepreneurial intentions [Paper presented]. The RENT IX Workshop, Piacenza, Italy.
Earle, J. S., & Sakova, Z. (1999). Entrepreneurship from scratch: Lessons on the entry decision into self-employment from transition economies (IZA Discussion Paper Series No. 79). Institute of Labor Economics
Elert, N., Henrekson, M., & Stenkula, M. (2017). Institutional reform for innovation and entrepreneurship: An agenda for Europe. Springer Cham. https://doi.org/10.1007/978-3-319-55092-3
Evans, D. S., & Leighton, L. S. (1990). Some empirical aspects of entrepreneurship. In Z. J. Acs & D. B. Audretsch (Eds.), The economics of small firms (pp. 79-99). Springer. https://doi.org/10.1007/978-94-015-7854-7_6
Fitzsimmons, J. R., & Douglas, E. J. (2011). Interaction between feasibility and desirability in the formation of entrepreneurial intentions. Journal of Business Venturing, 26(4), 431-440. https://doi.org/10.1016/j.jbusvent.2010.01.001
Freire-Gibb, L. C., & Nielsen, K. (2014). Entrepreneurship within urban and rural areas: Creative people and social networks. Regional Studies, 48(1), 139-153. https://doi.org/10.1080/00343404.2013.808322
Fritsch, M., Bublitz, E., Sorgner, A., & Wyrwich, M. (2014). How much of a socialist legacy? The re-emergence of entrepreneurship in the East German transformation to a market economy. Small Business Economics, 43(2), 427-446. https://doi.org/10.1007/s11187-014-9544-x
Greene, W. H. (2003). Econometric analysis, 5th edition. Pearson.
Guerrero, M., Rialp, J., & Urbano, D. (2008). The impact of desirability and feasibility on entrepreneurial intentions: A structural equation model. International Entrepreneurship and Management Journal, 4(1), 35-50. https://doi.org/10.1007/s11365-006-0032-x
General Statistics Office of Vietnam (GSO). (2016). Statistical Year Book of Vietnam, 2016.
General Statistics Office of Vietnam (GSO). (2017). Statistical Year Book of Vietnam, 2017.
Heineck, G., & Süssmuth, B. (2013). A different look at Lenin’s legacy: Social capital and risk taking in the two Germanies. Journal of Comparative Economics, 41(3), 789-803. https://doi.org/10.1016/j.jce.2013.02.005
Henrekson, M. (2007). Entrepreneurship and institutions (IFN Working Paper No. 707). Research Institute of Industrial Economics. https://doi.org/10.2139/ssrn.996807
Hoang, T. L., Ta, N. L., Nguyen, D. H., Ho, T. M. H., & Lebailly, P. (2018). One Village One Product (OVOP) – A rural development strategy and the early adaption in Vietnam, the case of Quang Ninh Province. Sustainability, 10(12), 4485. https://doi.org/10.3390/su10124485
Jairo, A.-A., Nguyen, C., Tran, A., & Phung, T. (2014). The urban-rural gap in governance: Evidence from Vietnam (MPRA Paper No. 64705). University Library of Munich.
Krueger, N. F. (1993). The impact of prior entrepreneurial exposure on perceptions of new venture feasibility and desirability. Entrepreneurship: Theory and Practice, 18(1), 5-21. https://doi.org/10.1177/104225879301800101
Krueger, N. F. Jr., & Carsrud, A. L. (1993). Entrepreneurial intentions: Applying the theory of planned behaviour. Entrepreneurship & Regional Development, 5(4), 315-330. https://doi.org/10.1080/08985629300000020
Krueger, N. F. Jr., Reilly, M. D., & Carsrud, A. L. (2000). Competing models of entrepreneurial intentions. Journal of Business Venturing, 15(5-6), 411-432. https://doi.org/10.1016/S0883-9026(98)00033-0
Lafuente, E., Vaillant, Y., & Rialp, J. (2007). Regional differences in the influence of role models: Comparing the entrepreneurial process of rural Catalonia. Regional Studies, 41(6), 779-796. https://doi.org/10.1080/00343400601120247
Lafuente, E. M., & Vaillant, Y. (2013). Age driven influence of role-models on entrepreneurship in a transition economy. Journal of Small Business and Enterprise Development, 20(1), 181-203. https://doi.org/10.1108/14626001311298475
Lang, R., Fink, M., & Kibler, E. (2013). Understanding place-based entrepreneurship in rural Central Europe: A comparative institutional analysis. International Small Business Journal: Researching Entrepreneurship, 32(2), 204-227. https://doi.org/10.1177/0266242613488614
Maddux, J. E. (1995). Self-efficacy theory. In J. E. Maddux (Ed.), Self-efficacy, adaptation, and adjustment: Theory, research, and application (pp. 3-33). Springer. https://doi.org/10.1007/978-1-4419-6868-5_1
Mai, N. K., & Nguyen, N. A. (2016). The factors affecting entrepreneurial intention of the students of Vietnam National University – A mediation analysis of perception toward entrepreneurship. Journal of Economics, Business and Management, 4(2), 104-111. https://doi.org/10.7763/JOEBM.2016.V4.375
Meager, N. (1996). From unemployment to self-employment: Labour market policies for business start-up. In G. Schmidt, J. O’Reilly, & K. Schömann (Eds.), International handbook of labour market policy and evaluation, Vol. 16, (pp. 489-519). Edward Elgar Publishing. https://doi.org/10.4337/9781781954256.00023
Mueller, S. L., & Thomas, A. S. (2001). Culture and entrepreneurial potential: A nine country study of locus of control and innovativeness. Journal of Business Venturing, 16(1), 51-75. https://doi.org/10.1016/S0883-9026(99)00039-7
Nguyen, Q. A., & Mort, G. S. (2016). Economic reform and entrepreneurship in Vietnam: A policy perspective. In J. Ateljević & J. Trivić (Eds.), Economic development and entrepreneurship in transition economies (pp. 109-127). Springer. https://doi.org/10.1007/978-3-319-28856-7_7
North, D. C. (1990). Institutions, institutional change and economic performance. Cambridge University Press. https://doi.org/10.1017/CBO9780511808678
North, D. C. (1994). Economic performance through time. The American Economic Review, 84(3), 359-368.
OECD. (2003). Entrepreneurship and local economic development: Programme and policy recommendations. Organisation for Economic Co-operation and Development. https://doi.org/10.1787/9789264199798-en
OECD. (2006). The new rural paradigm: Policies and governance. Organisation for Economic Co-operation and Development. https://doi.org/10.1787/9789264023918-en
Pateman, T. (2011). Rural and urban areas: Comparing lives using rural/urban classifications. Regional Trends, 43, 11-86. https://doi.org/10.1057/rt.2011.2
Peterman, N. E., & Kennedy, J. (2003). Enterprise education: Influencing students’ perceptions of entrepreneurship. Entrepreneurship Theory and Practice, 28(2), 129-144. https://doi.org/10.1046/j.1540-6520.2003.00035.x
Porter, M. E. (1995). The competitive advantage of the inner city. Harvard Business Review, 73(3), 55-71.
Reynolds, P., Bosma, N., Autio, E., Hunt, S., De Bono, N., Servais, I., Lopez-Garcia, P., & Chin, N. (2005). Global entrepreneurship monitor: Data collection design and implementation 1998-2003. Small Business Economics, 24(3), 205-231. https://doi.org/10.1007/s11187-005-1980-1
Runst, P. (2013). Post‐socialist culture and entrepreneurship. The American Journal of Economics and Sociology, 72(3), 593-626. https://doi.org/10.1111/ajes.12022
Schumpeter, J. A. (1934). The theory of economic development: An inquiry into profits, capital, credit, interest, and the business cycle (Vol. 55). Transaction Publishers.
Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25(1), 217-226. https://doi.org/10.5465/amr.2000.2791611
Shapero, A., & Sokol, L. (1982). The social dimensions of entrepreneurship. In C. A. Kent, D. L. Sexton, & K. H. Vesper (Eds.), Encyclopedia of Entrepreneurship (pp. 72-90). Prentice Hall.
Shook, C. L., & Bratianu, C. (2010). Entrepreneurial intent in a transitional economy: An application of the theory of planned behavior to Romanian students. International Entrepreneurship and Management Journal, 6(3), 231-247. https://doi.org/10.1007/s11365-008-0091-2
Smallbone, D., & Welter, F. (2006). Conceptualising entrepreneurship in a transition context. International Journal of Entrepreneurship and Small Business, 3(2), 190-206. https://doi.org/10.1504/IJESB.2006.008928
Sohns, F., & Diez, J. R. (2018). Explaining micro entrepreneurship in rural Vietnam – A multilevel analysis. Small Business Economics, 50(1), 219-237. https://doi.org/10.1007/s11187-017-9886-2
Solesvik, M. Z., Westhead, P., Kolvereid, L., & Matlay, H. (2012). Student intentions to become self-employed: The Ukrainian context. Journal of Small Business and Enterprise Development, 19(3), 441-460. https://doi.org/10.1108/14626001211250153
Stathopoulou, S., Psaltopoulos, D., & Skuras, D. (2004). Rural entrepreneurship in Europe: A research framework and agenda. International Journal of Entrepreneurial Behavior & Research, 10(6), 404-425. https://doi.org/10.1108/13552550410564725
Tran, Q. B., Pham, T. P., & Bui, T. N. (2015). Knowledge and associated factors towards type 2 diabetes among a rural population in the Red River Delta region, Vietnam. Rural and Remote Health, 15(3), 3275. https://doi.org/10.22605/RRH3275
The World Bank. (2012). Well begun, not yet done: Vietnam’s remarkable progress on poverty reduction and the emerging challenges. https://openknowledge.worldbank.org/handle/10986/12326
The World Bank. (2019). The World Bank Annual Report 2019: Ending Poverty, Investing in Opportunity. https://openknowledge.worldbank.org/handle/10986/32333
Thompson, P., Jones-Evans, D., & Kwong, C. (2012). Entrepreneurship in deprived urban communities: The case of Wales. Entrepreneurship Research Journal, 2(1), 1-33. https://doi.org/10.2202/2157-5665.1033
Unger, J. M., Rauch, A., Frese, M., & Rosenbusch, N. (2011). Human capital and entrepreneurial success: A meta-analytical review. Journal of Business Venturing, 26(3), 341-358. https://doi.org/10.1016/j.jbusvent.2009.09.004
Vaillant, Y., & Lafuente, E. (2007). Do different institutional frameworks condition the influence of local fear of failure and entrepreneurial examples over entrepreneurial activity? Entrepreneurship and Regional Development, 19(4), 313-337. https://doi.org/10.1080/08985620701440007
Welter, F. (2011). Contextualizing entrepreneurship – Conceptual challenges and ways forward. Entrepreneurship Theory and Practice, 35(1), 165-184. https://doi.org/10.1111/j.1540-6520.2010.00427.x
Wennberg, K., Pathak, S., & Autio, E. (2013). How culture moulds the effects of self-efficacy and fear of failure on entrepreneurship. Entrepreneurship & Regional Development, 25(9-10), 756-780. https://doi.org/10.1080/08985626.2013.862975
Wyrwich, M. (2013a). Can socioeconomic heritage produce a lost generation with regard to entrepreneurship? Journal of Business Venturing, 28(5), 667-682. https://doi.org/10.1016/j.jbusvent.2012.09.001
Wyrwich, M. (2013b). In the name of my parents: Entrepreneurship and the intergenerational transmission of values (Jena Economic Research Papers No. 2013- 031). Friedrich-Schiller University Jena.
Wyrwich, M., Stuetzer, M., & Sternberg, R. (2016). Entrepreneurial role models, fear of failure, and institutional approval of entrepreneurship: A tale of two regions. Small Business Economics, 46(3), 467-492. https://doi.org/10.1007/s11187-015-9695-4
Volume and Issues
Copyright & License
Copyright (c) 2022 Nguyen Thi Lanh, Do Quang Hung.
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.