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The Family's Financial Support as a "Poisoned Gift": A Family Embeddedness Perspective on Entrepreneurial Intentions

September 2016

September 2016
in press / early view(1)

DOI:10.1111/jsbm.12273

Authors:

Philipp Sieger

Universität Bern

Tommaso Minola

University of Bergamo

We argue that greater availability of financial support by the family for creating a new venture entails stronger financial and non-financial obligations. Cognizant of these obligations, potential founders anticipate negative performance implications for the planned firm and threats to the family system in the case of their non-fulfillment. We thus postulate that the formation of actual entrepreneurial intentions is less likely the greater the available financial support. We confirm this by studying a sample of 23,304 respondents from 19 countries and find the negative relationship to be dependent on family cohesion and on individual entrepreneurial self-efficacy.

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The Family’s Financial Support as a “Poisoned Gift” :

A Family Embeddedness Perspective on

Entrepreneurial Intentions

by Philipp Sieger and Tommaso Minola

We argue that greater availability of financial support by the family for creating a new venture

entails stronger financial and non-financial obligations. Cognizant of these obligations, potential

founders anticipate negative performance implications for the planned firm and threats to the

family system in the case of their non-fulfillment. We thus postulate that the formation of actual

entrepreneurial intentions is less likely the greater the available financial support. We confirm this

by studying a sample of 23,304 respondents from 19 countries and find the negative relationship

to be dependent on family cohesion and on individual entrepreneurial self-efficacy.

Introduction

Scholars have undertaken intensive investi-

gation of what drives individuals’ entrepre-

neurial intentions, meaning the intention to

create a new firm (cf. Schlaegel and Koenig

2014), and agree that the resources that are

available to potential founders are crucial in

that regard (Hindle, Klyver, and Jennings

2009). Financial resources, for instance, are

regarded as the conditio sine qua non for

new venture creation (cf. Steier 2003). Family

members, in turn, are often assumed to be the

most relevant providers of financial resources

(cf. Astrachan, Zahra, and Sharma 2003;

Bygrave et al. 2003; Coleman and Robb 2011;

Steier 2003) because financial capital from

family members likely has important advan-

tages such as lower transaction costs (Au and

Kwan 2009), favorable interest and payback

requirements (Steier and Greenwood 2000),

and availability when other sources are not

available (Steier 2003). Consequently, the lit-

erature tends to assume implicitly that the

more money from the family is available, the

more likely there are to be entrepreneurial

intentions.

However, recent literature using a family

embeddedness perspective which describes the

intertwining of entrepreneurship and family (cf.

Aldrich and Cliff 2003) provides initial evidence

that this might not necessarily be the case. On

the one hand, strong ties with family members as

described by family embeddedness may indeed

have advantages for potential entrepreneurs such

as facilitated access to (financial) resources

(Aldrich and Cliff 2003). On the other hand,

accessing resources through strong family ties

implies financial and non-financial obligations

(Arregle et al. 2015; Granovetter 1985; Uzzi

1997). These may include reciprocity demands,

sense of duty, social indebtedness, and moral bur-

den (Kohli and Kuenemund 2003). This points to

Philipp Sieger is Assistant Professor at the University of Bern (Switzerland), Department of Management and

Entrepreneurship.

Tommaso Minola is Director at CYFE (Center for Young and Family Enterprise) and Assistant Professor at

Department of Management, Information and Production Engineering, University of Bergamo, Italy.

Address correspondence to: P. Sieger, University of Bern, Department of Management and Entrepreneur-

ship, Engehaldenstrasse 4, 3012 Bern, Switzerland. E-mail: philipp.sieger@imu.unibe.ch.

SIEGER AND MINOLA 1

Journal of Small Business Management 2016 00(00), pp. 00–00

doi: 10.1111/jsbm.12273

a potential downside of family-provided financial

capital and raises the question of whether the

availability of financial capital from the family

actually fosters or impedes entrepreneurship. In

particular, how financial support by the family

affects individual intentions to start a firm is not

fully clear yet (cf. Chang et al. 2009; Matthews,

Hechavarria, and Schenkel 2012).

To address this gap, we take a family

embeddedness perspective and argue that

potential entrepreneurs are aware of three main

related issues: (1) that the more of a family’s

financial support is used to create a planned

firm, the stronger the related obligations will be;

(2) that these obligations are likely to impede

the future performance of the planned venture

(Au and Kwan 2009; Stewart 2003); and (3) that

the consequences for the family system in the

not unlikely case of non-fulfillment of those

obligations will be severe (Arregle et al. 2015;

Olson et al. 2003). The availability of financial

support by the family is thus a “poisoned gift”:

it is a “gift” that helps to overcome pressing

resource constraints for new venture creation

(Steier 2003), but it is “poisoned” in that it indi-

cates strong embeddedness and related obliga-

tions (cf. Arregle et al. 2015; Batson and Powell

2003), which may have negative anticipated

consequences for the planned venture (such as

impeded performance) and for the family. The

greater the availability of this support, the more

potential entrepreneurs will perceive it as

“poisoned” and thus be less willing to use it.

This leads us to postulate a negative relationship

between the availability of the family’s financial

support and individuals’ entrepreneurial intentions.

We also hypothesize that the relationship just

described is moderated by three factors. First, it

should be intensified by strong family cohesion

which captures the emotional strength of family

ties beyond the structural dimension of family

embeddedness (Gulati 1998) and leads to even

stronger obligations. Second, it should be

weaker when a potential entrepreneur plans to

include a co-founder from his or her family (cf.

Dyer and Handler 1994) because he or she will

then anticipate performance advantages

(Schjoedt et al. 2013). This, in turn, will lead to

enhanced confidence about fulfilling family

embeddedness-based obligations. Third, confi-

dence should also be higher, and our main rela-

tionship should thus also be weaker, when the

potential entrepreneurs’ level of entrepreneurial self-

efficacy, meaning their perceived entrepreneurial

ability (Chen, Greene, and Crick 1998), is high.

We test these predictions on a sample of 23,304

individuals from 19 countries using multi-level

mixed effect logistic regression and find overall

support for our reasoning.

Our study offers several main contributions.

First, we advance entrepreneurial intention liter-

ature by extending the knowledge about how

the family’s financial support relates to entrepre-

neurial intentions (cf. Alvarez and Busenitz

2001; Basu and Parker 2001; Chang et al. 2009;

Hughes 2004; Steier 2003); specifically, we pro-

vide family embeddedness-based theorizing and

empirical evidence that the availability of finan-

cial support by the family can actually impede

entrepreneurial intentions. This challenges the

implicit assumption in the literature that more

financial support is always better, particularly

when it comes from the family (cf. Dyer, Nen-

que, and Hill 2014; Fairlie and Robb 2008; Kim,

Longest, and Aldrich 2013). We further enrich

general research on the formation of entrepre-

neurial intentions (cf. Schlaegel and Koenig 2014)

by showing how different family- and individual-

related moderators of our main relationship

enhance or impede entrepreneurial intentions.

Second, we contribute to research on family

embeddedness. We add to emerging literature

about the potential downsides of family

embeddedness (Arregle et al. 2015; Ermisch and

Gambetta 2010; Uzzi 1997) by offering explicit

theorizing and empirical findings about how

family embeddedness-related obligations that

arise when individuals would rely on their fam-

ily’s financial support impede the formation of

entrepreneurial intentions. This complements

existing findings that strong family ties can

inhibit entrepreneurial action and cognition (Au

and Kwan 2009; Khavul, Bruton, and Wood

2009; Stewart 2003) and further highlights the

importance of the family context when the

embedded nature of entrepreneurial processes

is studied (cf. Jack and Anderson 2002).

Third, our work advances existing research on

entrepreneurial family teams and entrepreneurial

families. We show that the plan to include a fam-

ily co-founder enhances the formation of entre-

preneurial intentions, which supports the claim

that family involvement in entrepreneurial teams

has positive (expected) outcomes (Schjoedt et al.

2013). Also, we address scholars in the field of

transgenerational entrepreneurship in business

families (e.g., Laspita et al. 2012; Zellweger,

Nason, and Nordqvist 2012) as we indicate that

intergenerational transmission of entrepreneur-

ship could be impeded by the potential provision

JOURNAL OF SMALL BUSINESS MANAGEMENT2

of financial support and related family embedded-

ness considerations.

Literature Review

The Family’s Financial Support as an

Antecedent of Entrepreneurial Intentions

Scholars agree on the paramount social and

economic importance of new venture creation

(Audretsch and Thurik 2000; Sternberg and

Wennekers 2005; Wong, Ho, and Autio 2005).

Consequently, entrepreneurial intentions as cen-

tral antecedents of entrepreneurial activity have

been investigated intensively (cf. Schlaegel and

Koenig 2014). Although not all activity can be

predicted by intentions, they are seen as the

most effective and stable predictors of behavior

(cf. Armitage and Conner 2001; Kautonen, van

Gelderen, and Fink 2015). Entrepreneurial

intentions are defined as intentions to start a

new self-owned firm (Krueger, Reilly, and

Carsrud 2000; Li~

n

an and Chen 2009). Investigat-

ing entrepreneurial intentions is appropriate as

starting a firm is not a reflex but is intentionally

planned (Krueger et al. 2000).

Entrepreneurial intentions critically depend

on several factors such as personality traits

(Rauch and Frese 2007), entrepreneurial role

models (Laspita et al. 2012), family business

exposure (Carr and Sequeira 2007), and, impor-

tantly, the potential entrepreneur’s ability to

obtain and leverage necessary tangible and

intangible resources, wherefore research should

better integrate resource considerations and

entrepreneurial intentions (Hindle et al. 2009).

Human and social capital (Hindle et al. 2009;

Schenkel, Hechavarria, and Matthews 2009) as

well as financial capital (Aldrich, Renzulli, and

Langton 1998) are regarded as most important.

Acquiring and mobilizing financial capital are

very difficult without an entrepreneurial track

record but are perhaps the most critical tasks

(Steier and Greenwood 2000); they can thus be

regarded as the conditio sine qua non for new

venture creation (cf. Steier 2003). Financial capi-

tal is generally defined as the funds (i.e., cash or

other financial assets) that are owned or can be

used by an individual (Basu and Parker 2001).

Potential entrepreneurs can rarely finance a

new venture fully by themselves and thus need

to raise capital elsewhere (Steier and Green-

wood 2000). Although for instance bank loans

may sometimes be most important (Au et al.

2016; Minola and Giorgino 2011; Robb and Rob-

inson 2014), literature tends to agree that

informal family investors seem to predominate

in new venture financing (Astrachan et al. 2003;

Bygrave et al. 2003; Coleman and Robb 2011;

Steier 2003). In fact, family financial capital,

often characterized as quickly mobilized (Dyer

et al. 2014) and as patient capital (Rodriguez,

Tuggle, and Hackett 2009), is described as “the

largest single source of start-up capital in the

world” (Steier 2003, p. 598).

The availability of financial capital in general

has been positively linked to self-employment

(Fairlie and Robb 2008; Kim et al. 2013; Rodri-

guez et al. 2009). However, the role of family-

provided financial capital in that context is

under-researched and little understood (cf.

Chang et al. 2009; Hughes 2004; Matthews et al.

2012; Rodriguez et al. 2009). The few existing

studies tend only to use parental wealth as a

proxy for financial support (e.g., Dunn and

Holtz-Eakin 2000) or refer to the generic 3F

(family, friends and fools) sources (Kotha and

George 2012) and thus “ignore the family

dimension of investment activity” (Steier 2003,

p. 598). Even though empirical evidence is

scarce and the underlying cognitive processes

are unclear (cf. Basu and Parker 2001; Steier

2003), literature thus tends to assume that the

availability of financial capital is positively

related to entrepreneurial intentions. This, how-

ever, is not necessarily true because of family

embeddedness considerations.

Entrepreneurial Intentions: The Role of

Family Embeddedness

On a general level, social embeddedness

describes the nature, depth, and extent of individu-

als’ ties with their environments and how such ties

affect their cognition and behavior (cf. Dacin, Beal,

and Ventresca 1999; Granovetter 1985; Le Breton-

Miller, Miller, and Lester 2011). According to this

perspective, actors are embedded in ongoing sys-

tems of social relations and are thus not “atomized

decision-makers” whose behavior is independent

of others (Aldrich and Cliff 2003, p. 577). The litera-

ture distinguishes between weak and strong, or

embedded, ties (Granovetter 1985; Uzzi 1996). In

contrast to weaker “arm’s length” relations, strong

ties such as those with family members imply fre-

quent exchanges and interactions between individ-

uals (Granovetter 1973, 1985).

Family embeddedness represents a specific

lens of social embeddedness as it refers to strong

or embedded ties between the entrepreneur and

family members (cf. Aldrich and Cliff 2003),

thereby suggesting that the family and the

SIEGER AND MINOLA 3

business are strongly intertwined (see also Dyer

and Handler 1994). Family embeddedness is thus

an appropriate perspective to investigate the role

of the family in the decision-making of (inten-

tional) entrepreneurs (cf. Arregle et al. 2015).

Family embeddedness may stimulate entre-

preneurial intentions thanks to enhanced recog-

nition of opportunities (Aldrich and Cliff 2003),

encouragement, the prospect of better firm per-

formance, and facilitated access to and acquisi-

tion of critical resources (Chang et al. 2009; Uzzi

1999; Welsh et al. 2014). Examples of such

resources are cheap labor, knowledge, emo-

tional support, business contacts (cf. Brush et al.

2001), and in particular, financial capital (e.g.,

Chua et al. 2011). In fact, Arregle et al. (2015)

argue also that “the embeddedness of entrepre-

neurs increases as they draw upon their families

for resources” (p. 4).

However, family embeddedness also creates

constraints (cf. Arregle et al. 2015; Uzzi 1997;

Werbel and Danes 2010). Specifically, the fre-

quent interactions among strong ties establish

expectations and obligations for exchange

(Granovetter 1985). A main obligation is the

need to reciprocate favorable behavior (Kohli

and Kuenemund 2003). In fact, strong ties

“contain an implicit principle of reciprocal

obligations” (Aldrich 1999, p. 82), and norms of

family and kin are believed to “revolve at one

pole of exchange: long-term generalized reci-

procity” (Stewart 2003, p. 385). These obliga-

tions, in turn, create social indebtedness, a

sense of duty, and a moral burden (cf. Kohli

and Kuenemund 2003). Applied to our case, the

family’s financial support for potential entrepre-

neurs thus does not seem to be an uncondi-

tional “gift.” The motivations for providing that

support are likely to include but are not limited

to, for instance, altruism (cf. Batson and Powell

2003); business- or non-business-related obliga-

tions and an expected financial and/or non-

financial return are very likely to exist (Arregle

et al. 2007, 2015). Even when altruism, defined

as action that benefits others at relative cost to

oneself, is present, likely in the form of “kin

altruism” in our case (cf. Zwick and Fletcher

2014), this may still imply incentives to recipro-

cate, as people’s actions are guided by an

explicit or implicit obligation to treat others as

they are treated (cf. Schulze et al. 2001). In gen-

eral, the obligation to “return the favor” applies

in particular to potential founders who do not

have sufficient funds of their own to create a

new firm because having insufficient resources

and conditional giving by others are closely

related (Kohli and Kuenemund 2003).

Hypothesis Development

Availability of Financial Support by the

Family and Entrepreneurial Intentions

The obligations and particularly reciprocity

demands that will emerge because of family

embeddedness when potential founders would

utilize their family’s financial support are likely to

have unfavorable consequences. First, inter vivos

money transfers between family members likely

constitute a “bribe” for children to provide

parents with services and treat them better (Kohli

and Kuenemund 2003, p. 128), beyond the

repayment of the money. The need to reciprocate

the favorable act of helping to overcome the

resource constraints related to the creation of a

new venture may result in a resource-intensive

“need for conspicuous generosity” (Stewart 2003,

p. 385) in a “web of obligations” (Stack 1974, p.

39). An example is normative pressure to support

the extended family (non-)financially (cf. Khavul

etal.2009).This,inturn,wouldputthelogicof

business at odds with the logic of kinship (Stewart

2003), which could lead to conflicts related to

the new venture’s strategy and development (Au

and Kwan 2009) and ultimately impede perform-

ance. For instance, entrepreneurs must resist the

pressure to support their extended families if

they wish to reinvest in their firms (Stewart

2003). The probability of a new venture’s success

may also be undermined because entrepreneurs

who rely on financial support by their family

may be forced to seek legitimization for their

investments by investing in assets with high pres-

tige but low productivity (Stewart 2003). In addi-

tion, the pressure to reciprocate the favorable

behavior may induce them to choose less risky

strategies with less upside potential. To conclude,

because reciprocity demands likely interfere with

market principles, we argue that potential found-

ers expect detrimental effects on the future per-

formance of the planned new venture if they

would utilize financial support by the family.

Second, starting a new firm involves high risk

and high failure rates (Shepherd, Douglas, and

Shanley 2000); the likelihood that financial and

non-financial obligations cannot be fulfilled is

thus considerable. This, in turn, can have severe

consequences. The partial or complete loss of the

family’s money would not only threaten family

members’ financial well-being and likely lead to

disputes and anger (Rosenblatt 1991) but it would

JOURNAL OF SMALL BUSINESS MANAGEMENT4

also mean that obligations could not be fulfilled,

that social indebtedness could not be repaid, and

that the moral burden could not be shouldered

(Kohli and Kuenemund 2003). This violates the

norm of reciprocity, which is invariably disruptive

of the family system (Gouldner 1960). When

entrepreneurs fail to reciprocate this can not only

reduce their legitimization (Stewart 2003) and

trustworthiness (Lumpkin, Martin, and Vaughn

2008) but can also put family relationships at risk

and threaten the survivability of the family system

(Arregle et al. 2015; Olson et al. 2003). Thus,

“family peace” may be threatened, which is criti-

cal given family members’ desire to preserve fam-

ily harmony (Kellermanns and Eddleston 2004).

Individuals are likely to be aware of these down-

sides and will thus not risk the family’s wealth

and the survival of the family system by using

family assets just “in hopes of success” (Gudmun-

son et al. 2009, p. 1099).

Third, even when the entrepreneur is very

successful and creates a windfall profit, satisfy-

ing financial supporters in the family may be

difficult. In such a case, family members may

have differing perceptions of what everyone’s

fair share of the profit should be compared with

what was originally agreed upon; even paying

back all the money at the agreed interest rate or

supporting the extended family as initially

expected by family members may leave them

unhappy and cause conflict (Steier 2003).

Finally, intentional founders are assumed to

have certain underlying motives such as the

desire for autonomy, independence, freedom,

and financial success (cf. Carter et al. 2003).

These motives, however, seem quite difficult to

satisfy by becoming an entrepreneur under the

conditions just described. For instance, when

family obligations interfere with the business,

the entrepreneur’s decision-making latitude and

autonomy are likely to be reduced significantly.

To conclude, we argue that the greater the

availability of financial support by the family for

creating a new venture, the stronger family

embeddedness-related obligations. Potential

entrepreneurs will be aware of those obligations

and their serious downsides and will anticipate

potential consequences. They will thus increas-

ingly perceive the primary source of new ven-

ture financing as “poisoned” and will be less

and less willing actually to use it. With the com-

monly used source of finance being more and

more unattractive, even though it is compara-

tively easy to acquire and has other helpful

advantages, the likelihood that entrepreneurial

intentions are actually formed will be lower:

H1: The greater the availability of financial support

by the family for an individual’s planned new

venture, the lower the likelihood that the individ-

ual actually forms entrepreneurial intentions.

Family Cohesion as a Moderator

If our reasoning is correct, we expect this neg-

ative relationship to be even stronger when fam-

ily cohesion is high. This is because the family

embeddedness literature implicitly assumes that

structurally positioning actors in a network of

family relationships is sufficient; in other words,

ties between two types of family members (e.g.,

children and parents) are assumed to be invaria-

bly strong. However, families differ in terms of

the strength of emotional bonding and closeness

among members (Kohli and Kuenemund 2003;

Lansberg and Astrachan 1994), and social bonds

between family members may deteriorate even in

intact nuclear families (Aldrich and Cliff 2003).

This suggests that socio-cognitive and emotional

aspects of inter-actor ties (cf. Dacin et al. 1999)

need to be considered as well; in other words,

the rather structural perspective needs to be com-

plemented with a relational perspective (cf. Tatli

et al. 2014). To achieve this, the concept of fam-

ily cohesion is appropriate, as it refers to the

degree to which family members are emotionally

attached and committed to each other (Olson

and Gorall 2003). Although family cohesion may

seem desirable, for instance because cohesive

families may have lower standards of perform-

ance among members (Long and Mathews 2011)

and may be more understanding and exhibit

stronger solidarity (Zahra 2012), there may also

be a downside (cf. Penney and Combs 2013).

Specifically, even when parents who have

strong emotional bonds withtheirchildren(i.e.,

in cohesive families) are more generous and altru-

istic, reciprocity obligations will still exist (Schulze

et al. 2001; Zwick and Fletcher 2014). Also, the

level of group cohesion has been found to be

related to the extensiveness of reciprocal obliga-

tions among members (Long and Mathews 2011);

logically, the social indebtedness and moral bur-

den because of family embeddedness are likely to

be even stronger when family cohesion is high.

Cohesive families may also have a more collecti-

vist than individualist orientation, with interactions

characterized by stronger reciprocity (Lansberg

and Astrachan 1994). When reciprocity obligations

SIEGER AND MINOLA 5

are stronger, it is more likely that family and busi-

ness logic are at odds, and the planned venture’s

future performance is more likely to be compro-

mised. Moreover, stronger obligations are more

difficult to fulfill; negative consequences in the

case of non-fulfillment are thus more likely.

Second, cohesiveness triggers feelings of

responsibility for preserving and enhancing family

assets (Lansberg and Astrachan 1994), and the shar-

ing of norms, values, and beliefs in cohesive fami-

lies creates strong trust among members (Ensley

and Pearson 2005). Thus, when family assets are

partly or completely lost, the entrepreneur has not

met responsibility expectations; this failure to

reciprocate, to fulfill social duties, and to pay back

social debts (Kohli and Kuenemund 2003) is likely

to destroy trust and to threaten a family system’s

well-being to an even greater extent (Gouldner

1960). Members of cohesive families also need to

exhibit “clique or club-like behaviors” caused by

moral pressure within this type of family (Kotha

and George 2012, p. 529). Members who fail to

do so by failing to reciprocate risk ostracism (Lin

1999). We argue, in turn, that failing to act as the

family desires, and ultimately being sanctioned or

even ostracized by the family in extreme cases, is

likely to constitute a major threat to familial peace.

This suggests that the negative consequences in

the case of non-fulfillment of obligations are more

severe in cohesive families.

Third, when an entrepreneur is very success-

ful, members of cohesive families are more

likely to feel entitled to gain their “rightful”

share of the whole profit, above and beyond

what was originally agreed upon, than family

members in less cohesive families, because of

the more collectivist orientation in cohesive fam-

ilies (Lansberg and Astrachan 1994).

Finally, these arguments suggest that creating

a business with financial support by a cohesive

family would be in even stronger opposition to

the most common motives for becoming an

entrepreneur, such as autonomy and independ-

ence, than with support by a less cohesive fam-

ily. Thus, the perceived and anticipated family

embeddedness-related downsides of the family’s

financial support are even greater when family

cohesion is high; family cohesion thus negatively

moderates our main relationship. Formally:

H2a: When family cohesion is high, the negative

relationship between the availability of finan-

cial support by the family and entrepreneurial

intentions is stronger (i.e., more negative) than

when family cohesion is low.

The Planned Inclusion of a Family Co-

Founder as a Moderator

We also argue that the planned inclusion of a

family co-founder acts as a positive moderator.

This is because potential founders anticipate

important relevant advantages that family-based

teams, a common phenomenon and a key aspect

of the family-entrepreneurship intersection (Dyer

and Handler 1994; Schjoedt et al. 2013), possess.

First, the plan to include a family co-founder is

likely to be sparked by goal congruence, shared

identity, and a shared vision (Discua-Cruz,

Howorth, and Hamilton 2013). The potential

entrepreneur and the family member that is

planned to be included should have greater tacit

understandings and consensus regarding the

firm’s strategy (cf. Ensley and Pearson 2005), and

thus potential entrepreneurs can expect that they

will be more effective and successful (Farrington,

Venter, and Boshoff 2012). Also, we argue that

they should anticipate less emotional conflict and

more efficient decision-making, which are two

characteristics of entrepreneurial family teams

(Eisenhardt and Schoonhoven 1990; Ucbasaran

et al. 2003). When potential founders plan to

include a family co-founder, they anticipate further

general performance advantages; for instance,

family co-founder commitment to a firm is likely

to be high and they may put the firm’s interests

before their own (Eddleston and Kellermanns

2007); in fact, founding teams that include a fam-

ily co-founder are assumed to have performance

advantages (cf. Schjoedt et al. 2013). Taken

together, these positive expectations should

increase potential entrepreneurs’ perceived likeli-

hood that the family’s financial support will be

paid back and that other family embeddedness-

based obligations, such as subsidizing the

extended family, will be fulfilled.

Second, potential entrepreneurs should also

expect fewer problems in terms of fulfilling fam-

ily demands, which alleviates the expected neg-

ative family embeddedness-related aspects of

utilizing the family’s financial support because

they and the family co-founder that is planned to

be included should normally both follow a fami-

lial logic (Miller, Le Breton-Miller, and Scholnick

2008). They should thus exhibit better steward-

ship of the family’s wealth and well-being (Dyer

2006); the plan to include a family co-founder

mayalsobebasedonthewishtoincreasethe

family’s wealth because of a shared commitment

to entrepreneurial stewardship of family assets

(Discua-Cruz et al. 2013).

JOURNAL OF SMALL BUSINESS MANAGEMENT6

Third, because of the shared entrepreneurial

stewardship of the family’s assets that occurs

when a family member is planned to be included,

potential entrepreneurs may expect an enhanced

legitimacy of the founding team in general. Plan-

ning to have an additional family member on

board may also lead potential entrepreneurs to

anticipate a higher bargaining power of the team

versus family members who provide financial

support. For instance, it could better counter high

compensation demands from family members in

thecaseofgreatsuccess,whichwouldalso

increase the founding team’s autonomy and inde-

pendence. Potential founders who plan to include

a family co-founder are also likely to expect that

they can share the moral burden of fulfilling fam-

ily embeddedness-related obligations with their

familyco-founders;inthecaseoffailuretorecip-

rocate, this particular burden could be shared as

well. In sum, potential founders who plan to

include a family co-founder anticipate the above-

mentioned advantages, which implies that they

perceive the disadvantages caused by family

embeddedness as less severe:

H2b: When individuals plan to include a family

co-founder, the negative relationship between

the availability of financial support by the fam-

ily and their entrepreneurial intentions is

weaker (i.e., less negative) than when individu-

als do not plan to include a family co-founder.

Individuals’ Entrepreneurial Self-Efficacy

as a Moderator

We further theorize that entrepreneurial self-

efficacy (cf. Bandura 1997) is another positive

moderator. Entrepreneurial self-efficacy is one

of the main drivers of entrepreneurial intentions

(McGee et al. 2009; Schlaegel and Koenig 2014);

it reflects an individual’s conviction that he or

she will be able successfully to perform the rele-

vant entrepreneurial tasks, such as the creation

and management of a new enterprise (Chen

et al. 1998). Potential entrepreneurs with a high

level of entrepreneurial self-efficacy are there-

fore very confident of leading their planned ven-

ture to success (Chen et al. 1998; Krueger et al.

2000). In fact, entrepreneurial self-efficacy has

been positively linked to new venture perform-

ance (Hmieleski and Corbett 2008) and new

venture growth (Baum and Locke 2004). This

affects our reasoning in different ways.

First, when potential entrepreneurs are con-

vinced that they have the entrepreneurial skills

and abilities to become a successful entrepre-

neur, this signals their confidence that they will

be able to fulfill the financial and non-financial

obligations induced by family embeddedness.

The fear of not being able to reciprocate favor-

able behavior thus looms less large than when

entrepreneurial self-efficacy is low. The per-

ceived risk of threatening the family system and

family well-being by not being able to shoulder

the moral burden and repay social debts will

thus be lower (Olson et al. 2003; Steier 2003).

Second, as a result, potential entrepreneurs

with high entrepreneurial self-efficacy will not put

family assets and family relationships at risk by

simply hoping for success (Gudmunson et al.

2009) but will be truly optimistic and convinced

of their success. They will likely base their future

business decisions on economic and entrepreneur-

ial considerations and less on legitimacy or justifi-

cation concerns, which enhances the probabilities

of success even more, and makes them believe

that they can act independently and autono-

mously, which satisfies general entrepreneurial

motives (Carter et al. 2003). In sum, we argue that

potential founders with high entrepreneurial self-

efficacy will be very confident of being able to

fulfill family embeddedness-related obligations

and will anticipate that their entrepreneurial

motiveswillbefulfilled.Thenegativerelationship

between availability of family financial support

and entrepreneurial intentions will thus be weaker

(i.e., positively moderated). Our conceptual model

is illustrated is illustrated by Figure 1 below.

H2c: When individual entrepreneurial self-efficacy

is high, the negative relationship between the

availability of financial support by the family

and entrepreneurial intentions is weaker (i.e.,

less negative) than when entrepreneurial self-

efficacy is low.

Method

Sample

We used a large student sample generated by

the GUESSS project in 2011.

In the past few

GUESSS (Global University Entrepreneurial Spirit Students’ Survey) investigates students’ career choice

intentions across the world. See www.guesssurvey.org.

SIEGER AND MINOLA 7

years, several studies based on GUESSS data

from 2006, 2008, and 2011 that investigate entre-

preneurial intentions (e.g., Laspita et al. 2012;

Lima et al. 2015; Sieger and Monsen 2015; Zell-

weger, Sieger, and Halter 2011) have been pub-

lished. Student samples are commonly used in

such research because scholars advocate study-

ing individuals at the earliest possible stage of

entrepreneurial activities (Kim, Aldrich, and Keis-

ter 2006), which applies to university students

who have not yet made their first actual career

choice. This allows a true prospective view with-

out retrospective bias (Carter et al. 2003) and

allows a nuanced light to be shed on the forma-

tion of entrepreneurial intentions. In addition,

student samples represent a homogeneous popu-

lation in terms of age and qualification (Li~

n

and Chen 2009). Student or adolescent sam-

ples are extensively used in entrepreneurship

research (cf. Schlaegel and Koenig 2014). For

our purposes, investigating students is particu-

larlyusefulbecausetheroleofthefamilyinthe

context of resource provision for entrepreneurial

activities is generally very important (Basu and

Parker 2001; Steier 2009), and it is particularly

important for young individuals (Aldrich and

Kim 2007) as they have normally not yet been

able to accumulate the financial resources neces-

sary for new venture creation by themselves.

In GUESSS, an English survey instrument was

developed by a core team of senior faculty mem-

bers at a major Swiss university. All the research-

ers involved were fluent in English and were

assisted by a native speaker.

An e-mail invitation

to participate in the online survey was distributed

to project teams in 26 countries and then for-

warded to students at approximately 500 univer-

sities; not all countries and universities started

data collection at the same time (starting dates

were between March and May 2011 and closing

dates between April and July 2011). In total,

93,265 responses were collected.

The GUESSS

survey asked all students: “Please indicate if and

how seriously you have been thinking about

founding your own company.” The response

options were “(1) never,” “(2) sketchily,” “(3)

Figure 1

Conceptual Model

Following a back-translation procedure, the German and French versions were also prepared (with the aid of

two bilingual native speakers who were not involved in the original survey development). Some GUESSS country

teams translated the English survey into their own preferred language and were requested to apply the same pro-

cedure. The translated versions were reviewed and checked for categorical and functional equivalence by the

GUESSS core team.

In most countries, students could win iPads, travel vouchers, or other items. GUESSS reports a response rate

of 6.3 percent (Sieger, Fueglistaller, and Zellweger 2011). This compares favorably with previous GUESSS edi-

tions and with other online student surveys (Porter and Whitcomb 2003). It is likely to be an underestimation as

not all universities necessarily invited all their enrolled students. Unfortunately, reliable estimates are not avail-

able for all universities. All GUESSS country teams were required to comply with any ethics-related requirements

in their respective countries. Assistance and support for the corresponding applications were provided by the

GUESSS core team.

JOURNAL OF SMALL BUSINESS MANAGEMENT8

repeatedly,” “(4) relatively concrete,” “(5) I have

made an explicit decision to found a company,”

“(6) I have a concrete time plan when to do the

different steps for founding,” “(7) I have already

started with the realization,” “(8) I am already

self-employed in my own founded firm,” and

“(9) I have already founded more than one com-

pany, and am active in at least one of them.”

Detailed questions regarding the availability of

family financial support and the planned inclu-

sion of a family co-founder were not posed to

students who had ticked option 1 or 2. This

“minimum threshold” of having given the crea-

tion of an own firm at least some basic thought

was introduced to ensure that students answered

further questions with adequate care and knowl-

edge (cf. Thompson 2009). This reduced the

sample by more than 50 percent. In addition, we

excluded those students who had already created

a firm and who came from countries for which

we could not retrieve data for all our country-

level control variables. We only used question-

naires in which all necessary items received

responses. The data set finally consisted of

23,304 responses from 19 countries.

Our data are clustered as our individual-level

observations (level 1) are nested within coun-

tries (level 2). Combining individual-level varia-

bles and country-level variables in the same

empirical models as we do may produce biased

and inefficient parameter estimates because

same-level observations are not random; thus, a

multi-level mixed-effects regression approach is

recommended, as it leads to accurate estima-

tions because it includes both random and fixed

effects (Rabe-Hesketh and Skrondal 2008). As

our dependent variable is binary, we applied

multi-level mixed effects logistic regression

(“xtmelogit” in Stata).

Variables

Entrepreneurial Intention. We used a GUESSS

variable that has already been used in previous

GUESSS-based publications (Laspita et al. 2012;

Zellweger et al. 2011). Students were asked:

“Which career path do you intend to pursue right

after completion of your studies,andwhich

career path 5 years after completion of your

studies? Only choose 1 option for each point in

time.” In line with Zellweger et al. (2011), we

chosetousethesecondquestion(seealso

Peterman and Kennedy 2003; Schroeder, Schmitt-

Rodermund, and Arnaud 2011). This is because

entrepreneurs typically work elsewhere, for

instance to gain relevant work experience or to

build up a network, before they start their own

business (cf. Brockhaus and Horwitz 1986;

Krueger et al. 2000; Raffiee and Feng 2014),

which can also be seen in the 2011 GUESSS sam-

ple where students often intend to become

employees directly after studies and entrepreneurs

five years later (cf. Sieger et al. 2011). Students

could choose from a comprehensive list of career

paths,andwecodedtheentrepreneurialintention

variable as “0” if students selected one of the non-

entrepreneurial options (e.g., working in a small,

medium-sized, or large firm, working as a

researcher at a university, working in public serv-

ice, or not pursuing a professional career at all). It

was coded “1” if students selected the option “as

a founder/foundation of an own firm” (for a simi-

lar approach see Laspita et al. 2012).

Availability of Family Financial Support

(AFFS). To assess the extent to which financial

support by the family would be available for the

planned new venture, we used the GUESSS ques-

tion: “Please indicate to what extent the following

statements about your family’s support for your

intended entrepreneurial activity apply to you.”

This prompt ensured that respondents took a pro-

spective view when assessing the availability of

financial support by the family. Items and framing

are based on existing definitions and operationali-

zations of family-provided financial capital (cf.

Aldrich and Kim 2007; Danes et al. 2009; Steier

2003). Here, we follow the literature and assume

that support is not only available but that poten-

tial entrepreneurs are also in actual need of it (cf.

Auetal.2016;Cressy1996).Theitemswere:“My

parents/family provide me with debt capital (capi-

tal that bears regular interest payments and that I

have to repay),” “My parents/family provide me

with equity capital (capital without regular inter-

est payment that may be lost in the case that the

business fails),” and “The capital provided by my

parents/family has favorable and flexible condi-

tions (e.g., low interest rates or long pay back

periods),” with answers ranging from 1 (strongly

disagree) to 7 (strongly agree). For the actual

measureweusedtheaveragevalueofthethree

items. Cronbach’s alpha was 0.85 (factor loadings

between 0.86 and 0.90).

Moderator Variables. For family cohesion

(H2a) we used four items from the FACES III

scale (Olson 1986): “Family togetherness is

important,” “Family members feel very close,”

“When family gets together, everyone is present,”

and “Family members ask each other for help.”

SIEGER AND MINOLA 9

Answers ranged from 1 (strongly disagree) to 7

(strongly agree). Cronbach’s alpha reached 0.86

with factor loadings between 0.80 and 0.91. For

the planned inclusion of a family co-founder

(H2b) we used two questions. The first was: “Do

youplantofoundyourcompanywithpartners?”

If students chose “yes,” they were asked a second

question: “Where do you recruit your partners

from?” One of the options was “Relatives/family

circle (parents, siblings).” We combined those

items into a binary variable coded “1” (planned

family co-founder), or “0” (no planned family co-

founder). The average value was 0.18 (standard

deviation [S.D.] 50.38). For entrepreneurial self-

efficacy (H2c), we used three items based on pre-

vious studies that captured students’ perceived

confidence in their abilities, capabilities, and skills

in terms of becoming a successful entrepreneur

(cf. Chen et al. 1998; Krueger et al. 2000; McGee

et al. 2009). The reverse coded prompt was:

“Please indicate to what extent the following

issues represent a barrier to founding a company

for you.” These were “Having the necessary skills

and capabilities,” “Having relevant technical

know-how,” and “Lack of the right business

idea.” Cronbach’s alpha reached 0.81 (factor load-

ings between 0.76 and 0.91).

Control Variables. We controlled for students’

age and gender (0 5male, 1 5female) (Schroeder

et al. 2011). As the proximity of a career choice

decision might affect intentions (Lee et al. 2011),

we controlled for study level. We used dummy

variables for undergraduate (bachelor) and

graduate (master) level (“1” if the respective

level applied; “0” if not; PhD level as holdout

category). We also accounted for the field of

study whereby we followed the classification

applied in the GUESSS project (see Sieger et al.

2011) and used three dummy variables for

business/economics,natural sciences, and

social sciences (“1” if the respective field

applied; “0” if not; “other” as holdout cate-

gory). To account for entrepreneurship educa-

tion (Souitaris, Zerbinati, and Al-Laham 2007),

we used a dummy variable to indicate whether

the student had attended any entrepreneurship

courses or seminars (“1” if yes, “0” if no). We

also considered students’ career motivations.

The GUESSS survey asked students: “How

important are the following motives for your

future work and career path?” 16 motives

based on Carter et al. (2003) and Kolvereid

(1996) were listed, such as “challenge myself,”

“financial security,” or “realize my own dream”

(all anchored from 1 5very unimportant,

75very important). We performed an explora-

tory factor analysis with varimax rotation;

applying face validity, we labeled the two

strongest extracted factors “achievement

motivation” (4 items, Cronbach’s alpha 50.79)

and “challenge motivation” (3 items, Cron-

bach’s alpha 50.74). We controlled for parents’

entrepreneurial status (Laspita et al. 2012)

with a dummy variable (“1” if the status

applied, “0” if not). The relevance of financial

capital may vary depending on the planned

firm’s industry sector; building on students’

responses to the question “In which industry

will your company mainly be active in?” we

created and added two dummy variables for

service and manufacturing sectors (“1” if the

respective sector applied, “0” if not; “other” as

holdout category). To control for economic

country-level differences, we included each

nation’s gross domestic product per capita

(GDPPC) and its unemployment rate. As entre-

preneurial intentions are embedded in the cul-

tural context (Li~

n

an and Chen 2009), we

controlled for three cultural dimensions: group

collectivism, uncertainty avoidance (Mueller

and Thomas 2001), and performance orienta-

tion, which is based on the need for achieve-

ment (McClelland 1965).

Data Quality Tests

To test the validity and distinctiveness of our

measures, we first applied Harman’s one-factor

test (Harman 1967). An exploratory factor analy-

sis with all study items revealed a 10-factor

GDP per capita data are taken from the International Monetary Fund (IMF) World Economic Outlook data-

base (see http://www.imf.org/external/index.htm). GDP data for Liechtenstein were not available there. Unem-

ployment rates are taken from the CIA World Factbook (see https://www.cia.gov/library/publications/the-

world-factbook/index.html). For the cultural dimensions we used corresponding indices from the GLOBE project

(House et al. 2004). These were not available for Belgium, Chile, Estonia, Luxembourg, Pakistan, and Romania.

This reduced our sample to 19 countries (Argentina, Austria, Brazil, China, Finland, France, Germany, Greece,

Hungary, Ireland, Japan, Mexico, the Netherlands, Portugal, Russia, Singapore, South Africa, Switzerland, and

the UK).

JOURNAL OF SMALL BUSINESS MANAGEMENT10

solution, accounting for 63.84 percent of total

variance (first factor: 16.97 percent). These

results, and in particular the fact that no factor

explains the majority of variance, provide initial

evidence that our measures are empirically dis-

tinguishable. Second, a confirmatory factor anal-

ysis with all our independent and moderator

variables showed a good fit (v

(39) 56367.522,

RMSEA 50.042, CFI 50.976). The fit of a one-

factor structure (v

(44) 594139.995, RMSEA 5

0.151, CFI 50.645) was significantly worse (dif-

ference in v

587772.473, df55, p<.001). This

further shows that our measures are empirically

distinguishable and may also provide a first

indication that common method bias is not a

very serious concern. To mitigate common

method bias concerns further we used the com-

mon latent factor (CLF) approach (Podsakoff

et al. 2003). We allowed the items of our inde-

pendent and moderator variables to load both

on their theoretical constructs and on an uncor-

related common factor. Adding this factor did

not improve model fit significantly; all original

factor loadings remained significant. Moreover,

Siemsen, Roth, and Oliveira (2010) have shown

that common method bias usually deflates inter-

action effects. We infer that finding significant

interaction effects, as we did, may thus be a pre-

liminary signal that common method bias might

not be a very serious concern. Multicollinearity

concerns are mitigated because the variance

inflation factors (VIFs) of our independent and

moderator variables did not exceed 1.239 (Hair

et al. 2006). Social desirability concerns are alle-

viated because respondents were assured of

strict confidentiality and because our variables

were spread over the long GUESSS survey,

which reduces the probability that respondents

anticipated our research question and adapted

their answers correspondingly (Podsakoff et al.

2003). We tested for potential endogeneity by

using a two-stage least squares approach with

multiple instrumental variables (Bascle 2008).

Instrumental variables should be significantly

correlated with the potentially endogenous vari-

able (i.e., availability of family financial support)

but not with the dependent variable (Kennedy

2008). We identified several variables in the

GUESSS data set that met these criteria through

a correlation analysis. Then, we selected those

where we would expect a correlation with AFFS

and a non-correlation with our entrepreneurial

intention variable also from a conceptual point

of view: the industry sector dummy variable

“agriculture,” GLOBE “power distance,” and

“exchange student status.”

Using these three

variables we computed the estimated values of

the availability of the family financial support

variable and then used those values to estimate

a regression model for our entrepreneurial

intention variable.

The Durbin-Wu-Hausman

chi-square test and the Wu-Hausman F-test were

not significant (both p5.336), which mitigates

endogeneity concerns. We did not test for

potential non-response bias by comparing early

and late respondents (Oppenheim 1966).

Because of the GUESSS data collection proce-

dure involving different starting and closing

dates of countries and universities, it was not

possible to identify early and late respondents

in a reliable way.

Results

Means, S.D., and Pearson correlations are

shown in Table 1. The correlations of our inde-

pendent, dependent, and moderator variables

are at or below 0.206 in magnitude, which indi-

cates no apparent shared variance concern (Hair

et al. 2006).

Table 2 shows the results of our multi-level

mixed effects logistic regression models. Model

1 includes our control variables only. Several

control variables are significant, such as age

(negatively) and having entrepreneurial parents;

The agricultural sector can be characterized by long-term and stable returns (Brewton et al. 2010) which

should be appealing to family members who might provide financial support. Also, family financing is particu-

larly important for new ventures in this industry (Alsos, Carter, and Ljunggren 2014). This suggests a positive cor-

relation with AFFS. For power distance, we note that when a society accepts power differences between

members and values hierarchy (Hofstede 2001), this could lead to lower AFFS (as the “more powerful”—

parents—might be less willing to support the “less powerful”—children). Doing an exchange term, in turn, con-

stitutes a considerable financial investment that is very likely to be financed by parents or family members. For

exchange students, it might thus be more likely that parents or family members would also support an entrepre-

neurial endeavor. For all these three variables, we believe there are no clear and convincing arguments why they

should make the formation of entrepreneurial intentions more or less likely.

This was done by using the ivreg2/ivendog commands in Stata 13.

SIEGER AND MINOLA 11

Table 1

Means, S.D., and Pearson Correlations

MeanS.D.12345678910111213141516171819202122

1 Age 25.23 6.08 1

2 Gender 0.47 20.045** 1

3 Undergr. level 0.80 20.218** 0.026** 1

4 Graduate level 0.15 0.113** 20.028** 20.856** 1

5 Business and

econ.

0.35 20.091** 0.019** 20.002 0.011 1

6 Natural science 0.31 0.012 20.184** 0.005 20.015* 20.491** 1

7 Social science 0.11 0.068** 0.134** 20.078** 0.068** 20.240** 20.221** 1

8 Entrepr.

education

0.79 20.042** 0.006 20.035** 0.036** 0.013* 20.015* 0.030** 1

9 Achievement m. 5.88 0.49 20.041** 0.066** 0.159** 20.157** 0.056** 20.020** 20.107** 20.042** 1

10 Challenge m. 5.70 1.06 20.001 20.032** 0.091** 20.086** 0.019** 0.034** 20.095** 20.049** 0.449** 1

11 Parents’ entr.

status

0.62 20.099** 0.038** 0.045** 20.041** 0.026** 20.029** 20.019** 20.011 0.031** 0.047** 1

12 Service 0.47 20.011 0.201** 20.010 20.001 0.074** 20.220** 0.119** 0.015* 0.018** 20.049** 0.011 1

13 Manufacturing 0.09 0.012 20.102** 0.025** 20.021** 20.037** 0.110** 20.072** 20.015* 0.004 0.029** 0.022** 20.301** 1

14 GDPPC 24911 14293 20.065** 20.055** 20.276** 0.292** 0.010 20.042** 0.091** 0.084** 20.327** 20.168** 20.076** 0.031** 20.072** 1

15 Unemployment 6.58 3.22 20.036** 0.036** 0.060** 20.060** 0.071** 20.019** 20.051** 20.045** 0.127** 0.060** 0.042** 20.004 0.037** 20.454** 1

16 Uncertainty

avoid.

4.21 0.82 0.005 20.088** 20.279** 0.282** 20.049** 0.003 0.082** 0.095** 20.317** 20.140** 20.061** 0.022** 20.062** 0.860** 20.485** 1

17 Perf.

orientation

4.14 0.40 0.030* 20.078** 20.139** 0.131** 20.047** 20.011 0.045** 0.056** 20.200** 20.057** 20.020** 0.033** 20.066** 0.651** 20.612** 0.833** 1

18 Group

collectivism

4.74 0.66 20.010** 0.080** 0.236** 20.254** 20.011 0.066** 20.093** 20.073** 0.291** 0.142** 0.036** 20.027** 0.071** 20.732** 0.307** 20.751 20.568** 1

19 Av. Fam.

Fin. support

2.78 1.74 20.151** 20.021** 0.033** 20.020** 0.038** 0 20.037** 20.025** 0.009 0.045** 0.131** 0.018** 0.024** 0.026** 20.022** 0.031** 0.043** 0.025** 1

20 Family

cohesion

5.63 1.26 20.027* 0.117** 0.045** 20.048** 0.035** 20.014* 20.033** 20.016* 0.234** 0.228** 0.045** 0.040** 0.022** 20.146** 0.093** 20.160** 20.132** 0.173** 0.156** 1

21 Family

co-founder

0.18 0.38 20.057** 0.043** 0.054** 20.047** 0.036** 20.023** 20.022** 20.020** 0.057** 0.039** 0.033** 20.009 0.032** 20.093** 0.043** 20.108** 20.074** 0.116** 0.093** 0.129** 1

22 Entr.

self-efficacy

4.50 1.59 0.115** 0.002 20.009 20.007 20.069** 0.018** 0.029** 20.002 20.007 0.011 0.009 20.009 20.023** 20.072** 0.039** 20.052** 20.050** 20.010 20.206** 20.021** 20.024** 1

23 Entr.

intention

0.55 20.091** 20.016 0.043 20.015* 0.068** 20.016* 20.055** 0.007 20.003 0.092** 0.025** 20.043** 0.003 20.038** 0.030** 20.064** 20.064** 0.028** 20.027** 0.010 0.032** 0.060**

N523,304.

*p<.05.

**p<.01.

S.D. for dummy variables are not reported.

JOURNAL OF SMALL BUSINESS MANAGEMENT12

Table 2

Results of Multilevel Mixed Effects Logistic Regressions (xtmelogit)

Model 1 Model 2 Model 3 Model 4

Coeff. S.E. Coeff. S.E. Coeff. S.E. Coeff. S.E.

Constant 0.363*** 0.089 0.358*** 0.087 0.355*** 0.088 0.368*** 0.089

Control variables

Age 20.155*** 0.015 20.168*** 0.016 20.174*** 0.016 20.172*** 0.016

Gender 20.017 0.014 20.020 0.014 20.019 0.014 20.019 0.014

Undergr. level 0.126*** 0.028 0.126*** 0.028 0.128*** 0.028 0.129*** 0.028

Graduate level 0.100*** 0.028 0.100*** 0.028 0.103*** 0.028 0.104*** 0.028

Business and economics 0.074*** 0.017 0.076*** 0.017 0.083*** 0.017 0.082*** 0.017

Natural science 20.015 0.017 20.015 0.017 20.012 0.017 20.012 0.017

Social science 20.070*** 0.018 20.072*** 0.018 20.072*** 0.018 20.071*** 0.018

Entrepreneurship education 0.019 0.013 0.016 0.013 0.016 0.013 0.014 0.013

Achievement motivation 20.165*** 0.017 20.167*** 0.017 20.159*** 0.017 20.157*** 0.017

Challenge motivation 0.263*** 0.017 0.268*** 0.017 0.267*** 0.017 0.270*** 0.017

Parents’ entrepreneurial status 0.028* 0.013 0.038** 0.013 0.035** 0.013 0.034** 0.013

Service 20.067*** 0.012 20.065*** 0.012 20.063*** 0.012 20.063*** 0.012

Manufacturing 20.021* 0.010 20.020* 0.010 20.018 0.010 20.017 0.010

GDPPC 20.231* 0.104 20.236* 0.102 20.228* 0.103 20.230* 0.104

Unemployment 20.088 0.045 20.088* 0.044 20.090* 0.045 20.090* 0.045

Uncertainty avoidance 20.053 0.159 20.046 0.157 20.032 0.158 20.030 0.160

Performance orientation 20.008 0.112 20.004 0.110 20.006 0.111 20.003 0.112

Group collectivism 20.103 0.085 20.088 0.084 20.071 0.085 20.066 0.086

Independent variable

Availability family financial

support (AFFS)

20.094*** 0.014 20.069*** 0.015 20.058*** 0.015

Moderators: main effects

Family cohesion (FC) 20.02 0.015 20.028 0.015

Planned family co-founder (FCF) 0.035*** 0.01 0.035*** 0.01

Entrepreneurial self-efficacy (ESE) 0.142*** 0.014 0.141*** 0.014

SIEGER AND MINOLA 13

Table 2

Continued

Model 1 Model 2 Model 3 Model 4

Coeff. S.E. Coeff. S.E. Coeff. S.E. Coeff. S.E.

Constant 0.363*** 0.089 0.358*** 0.087 0.355*** 0.088 0.368*** 0.089

Interaction terms

AFFS * FC 20.036* 0.015

AFFS * FCF 20.003 0.010

AFFS * ESE 0.030* 0.013

Model fit statistics

Degrees of freedom 18 19 22 25

Log likelihood 215,564.218 215,542.112 215,486.138 215,479.809

Wald chi

547.28 588.26 691.67 703.59

AIC

31,168.44 31,126.22 31,020.28 31,013.62

LR test versus linear regression: v

102.52*** 104.20*** 115.76*** 117.37***

LR test of model fit: v

44.21*** 111.95*** 12.66***

Standardized variables used; N523,304, countries 519.

Akaike’s information criterion (2k22)*(log likelihood), k5degrees of freedom. Gradually smaller values denote improved model fit;

Statisti-

cal significance confirms that the country-level variance component is important;

LR test performed between models using maximum-

likelihood estimates (MLE).

*p<.05.

**p<.01.

***p<.001.

JOURNAL OF SMALL BUSINESS MANAGEMENT14

the latter is positively and significantly related to

entrepreneurial intentions. Of our five country-

level control variables, GDP per capita and

unemployment are significant in most models

(both negatively). In Model 2, we added the

availability of the family’s financial support vari-

able (AFFS) and found it had a significant and

negative relationship with entrepreneurial inten-

tion (coeff 520.094, p<.001). This supports

Hypothesis1.InModel3,weaddedthemain

terms of our moderator variables. The interaction

terms to test our moderation hypotheses were

added in Model 4. The interaction between AFFS

and family cohesion is significant and negative

(coeff 520.036, p<.05), confirming Hypothesis

2a. The interaction term of AFFS and the family

co-founder variable is not significant (coef-

f520.003, p>.05); we thus cannot support

Hypothesis 2b. The AFFS-entrepreneurial self-effi-

cacy interaction term is positive and significant

(coeff 50.030, p<0.05), providing support for

Hypothesis 2c.

To assess incremental model fit, we con-

ducted pairwise likelihood ratio (LR) tests and

found that adding predictors always improved

model fit significantly (p<.05). To facilitate the

interpretation of our significant interaction

effects we followed Ai and Norton (2003) and

plotted the marginal effects of the moderator

variables using the “marginsplot” command in

Stata. In both Figures 2 and 3, the main relation-

ship between AFFS and entrepreneurial intentions

is negative for both values of the moderator,

whereby Figure 2 shows the negative moderation

effect of family cohesion and Figure 3 shows the

positive moderation effect of entrepreneurial self-

efficacy. The plots therefore strongly support our

findings.

Tests for Robustness and Alternative

Explanations

To assess the empirical robustness of our

results, we first ran binary logistic regression

models that did not take the multi-level data

structure into account (see Laspita et al. 2012)

and found unchanged results. Then, as an alter-

native multi-level estimation method, we

applied the “meqrlogit” procedure in Stata 13

and found unchanged results as well.

In addi-

tion, we ran our models without our country-

level control variables; also, in a separate test,

we did not use our country-level control varia-

bles but added country dummies for all coun-

tries except one (the holdout category). In both

cases, our results were unaffected. Also, we

assessed whether our results were driven by

exchange students that were included in their

respective host country. Neither excluding all

exchange students (1.89 percent of the total

sample) nor adding exchange student status as a

Figure 2

Availability of Family Financial Support and Family Cohesion

We also used the “svy: logit” command (with country as the primary sampling unit) instead of the “xtmelogit”

command and found stable results.

SIEGER AND MINOLA 15

control variable changed our results. Further-

more, we split our sample according to the

question that asked students if and how seri-

ously they had been thinking about founding

their own company. One group contained those

who ticked options 3, 4, and 5, and the other

group contained those who had a more con-

crete plan. The relationship between AFFS and

entrepreneurial intentions remained negative

and significant in both subsamples (p<.05).

Furthermore, we tested for a curvilinear effect

of AFFS by adding its squared term; the results

show that a curvilinear effect does not exist.

Also, we re-ran our models three times whereby

we used a different single item of the AFFS mea-

sure as the independent variable each time. In

all those models, the single AFFS item was

always negatively and significantly related to

entrepreneurial intentions.

We note that we did not explicitly consider

intention theories such as the theory of planned

behavior (TPB) (Ajzen 1991), which is in line with

numerous other studies (e.g., Hmieleski and

Corbett 2006; Schroeder et al. 2011; Virick, Basu,

and Rogers 2015; Walter, Parboteeah, and Walter

2013; Wilson, Kickul and Marlino 2007). How-

ever, to test the reliability and validity of our con-

ceptual and empirical arguments, we checked

whether our results hold in a TPB setting. We

thus added established measures for attitude

toward entrepreneurship and subjective norms as

control variables. The four-item attitude measure

(cf. Li~

n

an and Chen 2009) exhibits a Cronbach’s

alphaof0.87;asampleitemis“Beinganentre-

preneur implies more advantages than disadvan-

tages to me.” The three items for subjective norm

have a Cronbach’s alpha of 0.83 (also based on

Li~

n

an and Chen 2009) and capture the expected

reaction of the reference groups parents/other

family members, friends/fellow students, and

important people in general in case an entrepre-

neurialcareerwouldbepursued.AFFSstillhasa

significant and negative relationship with entre-

preneurial intention (coeff 520.069, p<.001).

Also, a separate analysis showed that AFFS is neg-

atively and significantly related to the above-

mentioned attitude measure (p<.05) and that atti-

tude mediates the negative relationship between

AFFS and entrepreneurial intentions.

Lastly, statistical significance may be less

informative in a large sample; effect size may be

a more appropriate way to interpret the substan-

tive importance of results. Thus, we calculated

odds ratios (OR) as corresponding indicators

(cf. Autio, Pathak, and Wennberg 2013). An OR

smaller than 1 indicates a negative association

between two variables, and an OR greater than

1 indicates a positive association. For AFFS, the

OR was 0.944; for the interaction with family

cohesion it was 0.972; and for the interaction

with entrepreneurial self-efficacy it was 1.028.

We also calculated OR for simple logistic models

without multi-level specification because these

models are employed more frequently. The OR

Figure 3

Availability of Family Financial Support and Entrepreneurial Self-

Efficacy

JOURNAL OF SMALL BUSINESS MANAGEMENT16

were 0.943, 0.974, and 1.027, respectively.

Although we need to be careful when compar-

ing OR with that reported in studies which use

different data sets (Williams 2009), our OR and

thus effect sizes could be regarded as satisfac-

tory compared with other studies that test mod-

els with direct (Kam et al. 2016; Norman, Butler,

and Ranft 2013) and interaction terms (e.g., Bar-

kema and Schijven 2008; McGinn and Milkman

2013). Compared with other studies that use

GUESSS data from 2011 (Sieger and Monsen

2015; Zellweger et al. 2015) or from 2008 (Las-

pita et al. 2012), our effect sizes can be seen as

satisfactory as well. Besides, effect sizes that

may appear rather small in absolute terms can

still have substantial practical and theoretical

value (Aguinis et al. 2005).

Referring to potential alternative explanations

of our results, one could speculate that our main

effect is contingent on parental wealth (Rodri-

guezetal.2009).Unfortunately,GUESSSdoes

not offer a corresponding variable. However,

when parents were entrepreneurs, students were

asked to evaluate the performance of their

parents’ firm compared with its competitors in

four dimensions (growth in sales, market share,

and profit as well as performance in job creation)

from much worse (1) to much better (7) over the

last three years (cf. Eddleston, Kellermanns, and

Sarathy 2008). This should be a good proxy for

the family’s wealth, as families with a well-

performing business should be wealthier than

those with a poorly performing one. We esti-

mated a model for the subsample of students

with entrepreneurial parents (N57,835) with

this additional variable. The relationship between

AFFS and entrepreneurial intention remained

negative and significant (coeff 520.054, p<.05).

Finally, entrepreneurial intentions could be

driven by any positive or negative experiences

that students have had in their parents’ business

(Zellweger et al. 2011). We therefore used the

subsample of students with a family business

background (N57,835) and added a control

variable that indicates working experience in

the parents’ firm in number of years (with no

work experience represented by zero years).

Our results remained unchanged.

Discussion

Using a family embeddedness perspective

and a sample of 23,304 students from 19 coun-

tries, our study reveals a negative relationship

between the availability of family’s financial

support and individual’s entrepreneurial inten-

tions. This relationship is strengthened by

family cohesion, weakened by entrepreneurial

self-efficacy, and unaffected by family co-founder

considerations. These findings advance existing

literature in numerous ways.

First, we contribute to entrepreneurial inten-

tion literature. While family-provided financial

support may indeed be a conditio sine qua non

for new venture creation (Steier 2003) and may

have favorable economic conditions, we chal-

lenge the implicit assumption that more financial

support by the family is generically better and

universally beneficial for start-up intentions (cf.

Chang et al. 2009; Dyer et al. 2014; Fairlie and

Robb 2008; Kim et al. 2013). In fact, our theoriz-

ing suggests and our analyses show that the avail-

ability of family financial support can actually

impede the formation of entrepreneurial inten-

tions. In other words, our novel finding that the

availability of the family’s financial support and

entrepreneurial intentions are negatively related

shows that the “gift” of being able to use family

money—and thus being able to create a new firm

in the first place might indeed be “poisoned.”

This speaks to scholars who acknowledge the

importance of family financial support but are

also aware of potential disadvantages (e.g., Kha-

vul et al. 2009) and adds a novel twist to existing

research about how family resources can support

(or impede) entrepreneurial intentions and activ-

ities (cf. Basu and Parker 2001; Chang et al. 2009;

Dyer et al. 2014; Hindle et al. 2009). Our results

also advance research on the role of resources in

the entrepreneurship context in general (cf.

Aldrich et al. 1998; Davidsson and Honig 2003;

Kimetal.2006).Furthermore,theysupportthe

idea that entrepreneurs “must be particularly

adroit in sensing the resources and the limits that

moral obligations provide them” (Stewart 2003,

p. 390). Relatedly, we address research on

resource valence that investigates whether resour-

ces are benefits or burdens (Wade-Benzoni and

Tost 2009). For instance, as shown in our robust-

ness tests, the availability of equity capital from

the family, as captured with one of the AFFS

items, is negatively related to entrepreneurial

intentions, which may point to expected agency

problems if family members would become

shareholders in the planned firm. Similarly, more

favorable and flexible conditions of available fam-

ily money imply lower entrepreneurial intentions,

which further illustrates that the larger the favor,

the larger the obligation to reciprocate, with all

the consequences this implies. These findings are

SIEGER AND MINOLA 17

also valuable because more insights are needed

about family influence on nascent entrepreneurial

activity in general (cf. Heck et al. 2008; Matthews

et al. 2012).

In addition, we further complement recent

work on the role of the family in the context of

start-up decisions (e.g., Chang et al. 2009; de

Jong and Marsili 2015) with our finding that

family cohesion is a relevant family-related fac-

tor. More specifically, we show that strong fam-

ily cohesion is not necessarily beneficial.

Although it can have certain advantages, we

illustrate that family embeddedness-related obli-

gations appear even stronger; ultimately, strong

family cohesion might thus impede the entre-

preneurial activities of family members. This

offers a new twist to family cohesion literature

(e.g., Penney and Combs 2013; Zahra 2012).

Importantly, our robustness checks show that

our main relationship seems to be independent

of the level of parental wealth. What is more,

we also illustrate the relevance of individual-

level factors in our setting as we find that entre-

preneurial self-efficacy mitigates our negative

main relationship. In fact, when individuals per-

ceive they have the skills and capabilities to

become a successful entrepreneur, the potential

downsides of family embeddedness-related obli-

gations appear less severe.

We conclude that securing start-up financing

from the family may be a necessary but not suf-

ficient condition for actually starting a new ven-

ture (Rodriguez et al. 2009). Given the

difficulties of raising financial capital outside the

family sphere (Steier 2003), our findings point

to a critical paradox: on the one hand, creating

a firm may not be possible without financial

support by the family; on the other hand, the

higher the availability of this support, the lower

the likelihood that actual entrepreneurial inten-

tions will be formed.

As a second main contribution, we advance

family embeddedness literature. Although we

agree that family embeddedness may imply

advantages, such as positive performance impli-

cations (Welsh et al. 2014) or facilitated access

to resources (Arregle et al. 2015), both our theo-

rizing and our empirical findings explicitly sup-

port the recent and increasingly important

notion that family embeddedness can also

have a downside (Arregle et al. 2015; Au

and Kwan 2009; Ermisch and Gambetta 2010;

Uzzi 1997). Specifically, we show that the family

embeddedness–related obligations that arise

when individuals rely on their family’s financial

support seem to impede the formation of entre-

preneurial intentions. This is in line with and

adds to existing findings that strong family ties

can inhibit entrepreneurial action (Au and Kwan

2009; Khavul et al. 2009; Stewart 2003). In addi-

tion, our detailed elaborations on the specific

characteristics of family-provided financial sup-

port and its family embeddedness-related impli-

cations illustrate the unique nature of this

resource type and emphasize the importance of

considering the family context in investigating

entrepreneurial activities (Aldrich and Cliff

2003). This is reinforced further by our finding

that family cohesion indeed seems to vary (Lans-

berg and Astrachan 1994), which has important

consequences. Whereas strong family cohesion

may have advantages such as lower standards

of performance among members (Long and

Mathews 2011) and stronger understanding and

solidarity (Zahra 2012), we find a negative mod-

eration effect, which supports our claim that

family embeddedness-related obligations are

even more severe in cohesive families.

Third, we extend recent works on entrepre-

neurial family teams and entrepreneurial families

(Schjoedt et al. 2013; Uhlaner et al. 2012). We sup-

port the notion that family involvement in entre-

preneurial teams has positive (expected) outcomes

(Schjoedt et al. 2013) by showing explicitly that the

plan to include a family co-founder affects

individual-level cognitive processes, which makes

the formation of entrepreneurial intentions more

likely. However, this plan does not affect the mag-

nitude of family embeddedness-related considera-

tions, as we cannot confirm a moderation effect. A

potential explanation could be that while planning

to include a family co-founder might indeed be

able to weaken individuals’ family embeddedness-

related concerns, those considerations might be

offset by expected potential conflicts among family

members (cf. Jehn 1995; Kellermanns and Eddles-

ton 2004), which, in turn, reduces potential entre-

preneurs’ confidence in being able to fulfill family

embeddedness-related obligations. Furthermore,

our study is of value to scholars who investigate

entrepreneurship across generations within busi-

ness families (e.g., Laspita et al. 2012; Zellweger

et al. 2012) as we indicate that intergenerational

transmission of entrepreneurship might be

impeded by the provision of financial support by

entrepreneurial parents and corresponding family

embeddedness considerations.

Finally, our study is of value to practice. Fam-

ily members in general and parents and children

in particular should be aware that providing

JOURNAL OF SMALL BUSINESS MANAGEMENT18

financial support within the family has impor-

tant implications for all parties involved and

may actually discourage children from becom-

ing entrepreneurs. In this context we suggest an

open discussion of financial and non-financial

obligations and expectations, be they implicit or

explicit.

Limitations and Future

Research

Notwithstanding the contributions of our

study we need to note a few limitations which,

at the same time, also open up promising future

research avenues. First, we investigate inten-

tions and not actual behavior. Naturally, not all

intentions will lead to behavior; we thus cannot

be fully sure whether all students who exhibit

entrepreneurial intentions will actually create a

firm in the future. However, a strong link

between intentions and behavior certainly exists

(Armitage and Conner 2001; Kautonen et al.

2015). We believe that our entrepreneurial

intention variable is reliable because when indi-

viduals indicate that they are aiming at a partic-

ular career, they normally have already begun

gathering relevant information and should thus

have a realistic idea of what is to come (cf.

Mitchell 2007; Zhao 2013). Nevertheless, future

research using longitudinal data that allow the

extension of our model to actual behavior

would be welcome. Such data would also

address the limitation that we cannot derive

valid conclusions with regard to causality

because of the cross-sectional nature of our sur-

vey data. Our theorizing, however, leads us to

believe that causality exists as we expect it. Fur-

thermore, reverse causality is one of the possi-

ble causes of endogeneity problems (Kennedy

2008); as our tests indicate that endogeneity

may not be a major issue, we can thus deduce

that reverse causality is not a fundamental prob-

lem in our data. In general, our numerous tests

support the overall quality and robustness of

our data and findings, even though we cannot

explicitly test for non-response bias, for instance.

Furthermore, although using a student sample

can be justified, we cannot rule out certain limita-

tions regarding the full generalizability of our

findings. Future research could use a general

adult population sample to replicate our findings.

This would also help in illuminating further

whether the relevance of obligations varies

depending on the life stage of individuals. What

is more, although our robustness checks support

the validity of our findings in a TPB setting, we

did not theorize on and test all the possible con-

nections between our study variables and the dif-

ferent TPB elements. Future research could move

in that direction by exploring various potential

moderation and mediation effects.

Turning to general potential future research

avenues, we encourage scholars to investigate

further the formation of entrepreneurial inten-

tions. Scholars could delve deeper into the

examination of how the availability of financial

capital from family members affects the cogni-

tive processes that lead to entrepreneurial inten-

tions. Specifically, the exact conditions of the

family’s financial support in terms of interest or

repayment conditions and related governance

arrangements (Steier 2003) and the relational

dynamics of intra-family financing (cf. Batson

and Powell 2003) deserve further research atten-

tion. To this end, we strongly advocate using a

family embeddedness perspective where intra-

family dynamics could be explored in greater

depth by capturing the potential entrepreneurs’

explicit perceptions of financial and non-

financial obligations and their consequences.

Family members’ motivations for giving (Kohli

and Kuenemund 2003) could also be explored

in more detail. Also, we find a consistent nega-

tive and significant relationship of age with

entrepreneurial intentions. Hence, older stu-

dents are less likely to exhibit entrepreneurial

intentions, which offers valuable insights to

recent research on age and entrepreneurship

(Kautonen, Down, and Minniti 2014). Scholars

could generate further insights in that regard by

applying for instance a developmental career

perspective (cf. Hall 2002) in that context. Fur-

thermore, potential entrepreneurs who have a

family business background could be of particu-

lar interest. Future research could explore for

instance how the family firm’s size, age, per-

formance, and corresponding socioemotional

wealth considerations (Gomez-Mejia et al. 2007)

affect their offspring’s entrepreneurial intentions

as well as the new venture’s characteristics and

long-term performance. Resource transfers and

cooperation or competition between the

parents’ firm and the new venture are worth

investigating as well. Also, a comparative analy-

sis that investigates the likelihood that a career

as an entrepreneur is preferred to another

career choice may provide additional nuanced

insights (Douglas and Shepherd 2002; Kolvereid

and Isaksen 2006; Krueger et al. 2000). For

instance, it would be interesting to examine

SIEGER AND MINOLA 19

how the factors described above affect the likeli-

hood of preferring to become an entrepreneur

to becoming an employee in the private sector

or a successor in the parents’ firm (if existing).

We also note that existing research is inconclu-

sive about how family involvement and family

support affect the performance of entrepreneur-

ial firms (Stewart and Hitt 2012). Scholars could

thus investigate how a family’s involvement in a

new venture in general, and the reliance on

family financing in particular, affects its long-

term success.

Finally, we believe that our findings are gen-

eralizable across contexts as they are based on a

19-country sample and because the phenom-

enon of obligations arising from strong family

ties is observable in most types of society (Kohli

and Kuenemund 2003). Nevertheless, GDP per

capita and unemployment are significant

country-level control variables in several mod-

els; hence, economic, cultural, institutional, or

family factors, such as family cohesion, may still

have specific effects that are worth exploring

and comparing across countries (cf. Fairlie and

Robb 2008).

To conclude, our study offers unique and

novel insights that advance existing knowledge

in numerous ways, and we hope that it will

spark promising and fruitful future research

efforts.

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A study of emerging entrepreneurs: do parent quality shaping entrepreneur intention?

Article

Full-text available

Mar 2024

This research aims to determine the influence of the quality of parental education on entrepreneurial intentions among young entrepreneurs. Through a comprehensive approach, this research analyzes the extent to which the quality of parental upbringing shapes young entrepreneurs' intentions to start a business venture. Entrepreneurship is a widely accepted social, economic and cultural phenomenon. Entrepreneurs are individuals who create businesses with risk and uncertainty in order to gain future profits. Entrepreneurship is influenced by family socialization factors, where parents act as the first agents in instilling entrepreneurial values. The family socialization process influences an individual's understanding of entrepreneurial literacy and determines his or her interest in this field. This research uses an extension of Ajzen's Theory of Planned Behavior (TPB), which assumes that parents' intention to support their children's entrepreneurship is influenced by attitudes towards behavior, subjective norms (SN), and perceived behavioral control (PBC). This research involves a sample of young entrepreneurs who are in the early stages of business development. A survey method is used to collect data from respondents, and statistical analysis will be carried out to link the quality of parental education with entrepreneurial intentions. It is hoped that the results of this research will provide better insight into how parental parenting factors can shape entrepreneurial intentions among young entrepreneurs. With a deeper understanding of these relationships, it will be possible to develop more effective policy recommendations and educational programs to support the development and growth of young entrepreneurs in the future.

ENTREPRENEURIAL SELF-EFFICACY DRIVES AND AMPLIFIES PERCEIVED OPPORTUNITY TOWARDS THE ENTREPRENEURIAL INTENTION OF ULOS WEAVERS GENERATION

Article

Full-text available

Dec 2023

The basic problem of family business succession planning is whether the generation intends to continue the family business, so this study aims to examine the intention of generations to continue their family's ulos weaving business based on the planned behavior theory (Ajzen, 1991). The Purposive Random Sampling method was selected and obtained as many as 131 generations of ulos weavers aged at least 15 years in North Tapanuli Regency who were collected using the snowball technique. Data analysis used the Structural Equation Model with the Lisrel program. The findings of this study indicate that entrepreneurial self-efficacy (ESE) plays a role in encouraging perceived opportunity (PO) towards entrepreneurial intention (EI). However, the role of entrepreneurial self-efficacy (interaction with PO to become ESEXPO) cannot strengthen PO towards EI. Gender effect testing found that women's EI was higher than men's because it was related to weaving skills. The weakness of this study is the cross-sectional time dimension so the implications for future research are the longitudinal time dimension, especially for testing moderation as well as in different contexts for testing the role of moderation or results that are inconsistent with a combination of theories so as to find novelty. In addition, other predictors and controls need to be added to enrich research in the field of family entrepreneurship. The implication for family business actors is to have a succession plan long before being 'forced' or as early as possible so that entrepreneurial self-efficacy and perceived opportunity arise, as well as other factors (internal and external) that are needed by the next generation of family businesses.

Emprendimiento y empresa familiar: ¿dos disciplinas hermanas o distintas?

Article

Full-text available

Mar 2024

El emprendimiento y la empresa familiar ¿son dos disciplinas hermanas o distintas? Ambas son disciplinas con entidad propia, pero desde el inicio ambas han estado fuertemente conectadas. De hecho, las empresas familiares han sido consideradas como un elemento central del proceso emprendedor donde la influencia de la familia es particularmente relevante en las primeras etapas de la creación de la empresa. Sin embargo, la etapa inicial de estas empresas ha sido poco explorada. Este artículo tiene un doble objetivo. En primer lugar, proporciona una pequeña perspectiva histórica de la evolución de las dos disciplinas académicas y sus interrelaciones, y, en segundo lugar, trata de resumir las principales conclusiones de la escasa literatura sobre la perspectiva del arraigo familiar que estudia el binomio familia-emprendimiento. Por último, el trabajo propone diferentes líneas de investigación para futuros estudios relacionados con la empresa familiar y el emprendimiento. Recibido: 26 de abril de 2023 Aceptado: 05 de octubre de 2023

Legacy in Family Business: A Systematic Literature Review and Future Research Agenda

Article

Feb 2024

This article maps and integrates research on legacy in family business using a sample of 140 articles. After describing the process of arriving at a corpus of legacy articles, we propose a systematic literature review that summarizes current literature based on five overarching questions: (a) What is legacy? (b) Who sends and receives legacy? (c) Why is legacy sent and accepted/rejected? (d) How is legacy sent and received? and (e) In which contexts? Based on this review, we identify gaps in the literature and suggest theoretical perspectives and research questions to guide future research on legacy in family business.

Understanding family dynamics and entrepreneurship: A grounded theory analysis of opportunity-driven entrepreneurs in Turkey

Article

Feb 2024

Household and entrepreneurial entry: an individual entrepreneurial capital perspective

Article

Feb 2024

Purpose How does the family influence individual entrepreneurial entry? The literature does not provide a satisfactory answer. In this paper, we develop an individual entrepreneurial capital perspective to systematically evaluate the impact of current households on entrepreneurship at both theoretical and empirical levels. Design/methodology/approach Based on the Global Entrepreneurship Monitor (GEM) database from 2010 to 2018, we used logit regression models to examine the relationship between household size and opportunity- and necessity-motivated entrepreneurship. Findings The empirical results show that with the expansion of household size, the possibility of opportunity-motivated entrepreneurship shows a trend that first declines and then rises, and the possibility of necessity-motivated entrepreneurship shows an upward trend, suggesting that there are two types of opposing mechanisms that affect the relationship between household and entrepreneurial entry. Practical implications Family households are the starting point of individual growth and provide initial cognitive and social resources for decision-making. For entrepreneurs, it is necessary to make full use of household-based capital and networks to promote entrepreneurial activities. For the government, it is necessary to explore the development and implementation of household-based entrepreneurial policies. Originality/value Through analyses of the U-shaped relationship between household size and opportunity-motivated entrepreneurship and the positive relationship with necessity-motivated entrepreneurship, we reveal the relationship between household and entrepreneurship, reconcile the contradictions in the literature and contribute to the two fields of family studies and entrepreneurship.

Exploring Students' Entrepreneurial Intention and Entrepreneurship Education efforts through the lens of GUESSS project

Conference Paper

Full-text available

Feb 2024

The realm of Entrepreneurial Education (EE) has witnessed significant growth in recent years, emerging as a pivotal element in fostering entrepreneurial intention (EI) during the initial phases of entrepreneurial endeavors. The concept of EI, denoting a conscious predisposition towards pursuing entrepreneurial ventures, has garnered considerable attention from both academic researchers and policymakers alike. Various global initiatives, such as those advocated by UNESCO and the European Commission, underscore the imperative of instilling an entrepreneurial ethos, particularly within higher education institutions (HEIs). HEIs are recognized as pivotal hubs for fostering both academic and student entrepreneurship, which in turn, significantly influence national economies and innovation systems. Despite the growing interest in understanding the determinants of entrepreneurship among university students, challenges persist due to limited empirical evidence and datasets. The Global University Entrepreneurial Spirit Students' Survey (GUESSS) project emerges as a promising resource, aiming to explore entrepreneurial attitudes and activities among students across numerous countries. The surge in scholarly interest surrounding EI dynamics and collaborations with the GUESSS project has led to a burgeoning body of research, particularly focused on student entrepreneurship. However, amidst this burgeoning interest, there remains a notable lack of systematic categorization. Thus, this study seeks to address the research question of identifying the predominant thematic areas in scientific research on EI utilizing the GUESSS dataset. Serving as the first literature review of its kind, this study aims to provide a comprehensive overview of research themes and influential papers examining student entrepreneurship within the framework of the GUESSS project. By aligning with broader entrepreneurship datasets and examining the evolving research landscape, this study intends to delineate existing gaps, thereby paving the way for future research endeavors. Ultimately, this systematic approach aims to offer insights into unexplored avenues and guide future research initiatives within the field of entrepreneurial education and student entrepreneurship.

Seeds in rocky soil: the interactive role of entrepreneurial legacy and bridging in family firms’ organizational ambidexterity

Article

Full-text available

Dec 2023
SMALL BUS ECON

Existing research on family firms emphasizes the importance of entrepreneurship across generations but leaves the role of entrepreneurial transmissions between predecessors and successors relatively unexplore . Building on the concept of entrepreneurial legacy, we ask how interactions of entrepreneurial mindsets and resources influence organizational ambidexterity in family firms. The study’s central argument (and metaphor) is that organizational ambidexterity thrives in multigenerational family firms if successors’ awareness of the family’s entrepreneurial legacy (the right seed) interacts with predecessors’ provision of entrepreneurial resources during succession (the fertile soil), also known as entrepreneurial bridging. We analyze a unique sample of successors from 296 multigenerational family firms in the agricultural sector. Our results point to the relevance of entrepreneurial resources in predecessor-successor collaborations to unlock the family firm’s ability to balance entrepreneurial exploration and exploitation.

Influence of Family Environment in Promoting Entrepreneurial Intentions and the Proliferation of Entrepreneurs

Chapter

Dec 2023

Research has shown that the family environment is one of the factors that shapes a person's entrepreneurial intentions, thereby leading to the production of entrepreneurs. Although several studies exist, none seem to have adopted the approach employed in this chapter. Premised on that, the chapter employed a teaching case approach to explain the influence of family environment in promoting entrepreneurial intentions and the proliferation of entrepreneurs. Guided by one research question, namely “How does the family environment promote entrepreneurial intention?” the chapter analysed three cases from Chinese Indonesia, Turkey, and Tunisia building on the theoretical strengths of the theory of planned behaviour and social cognitive theory. These theories were employed to analyse how family environment promoted entrepreneurial intentions in the countries mentioned. Findings from the analysis in the three cases highlighted revealed that the family environment through the instrumentality of role modelling and support for autonomy promotes entrepreneurial intentions.

Psychosocial Wellbeing of Entrepreneurs: The Interplay of Business-Family Life Stressors and Social Support

Chapter

Dec 2023

Entrepreneurship engages every aspect of the entrepreneur's being in conducting work and engaging with family life. The entrepreneurial process, from beginning to completion, comprises transition stages, which are all distinctively stressful. Unlike people who are employees in the public or private sectors of any economy, the entrepreneur may not be able to draw boundaries between business life and family life as their business traverses both domains. These scholars argue that the resultant effect of the boundary-crossing activities of the entrepreneur will result in stress and conversely affect their psychosocial well-being. Amid their entrepreneurial activities and family responsibilities, the chaos unfolding opens the entrepreneur to needing balance. This chapter explores the role that business-family life strategies and social support could play in assisting entrepreneurs to achieve and maintain psychosocial well-being. The findings of the chapter from the review of extant literature will have practical and theoretical implications.

The role of social and human capital among nascent entrepreneurs

Article

Full-text available

Aug 2000

This study examined nascent entrepreneurship by comparing individuals engaged in nascent activities (n = 452), after screening a sample from the general population (n=30,427). Due to the large sample size and the utilization of a control group of non-entrepreneurs (n=608), the findings of this study present a new approach to the relationship between human capital, social capital and entrepreneurship. Our primary objective was to help close the significant research gap regarding the sociological characteristics of nascent entrepreneurs, as well as to examine the comparative importance of various contributions and factors, such as personal networks and business classes. Having friends in business and being encouraged by them was a strong predictor regarding who among the general population eventually engaged in nascent activity. The study fails to support the role of formal education in predicting either nascent entrepreneurship or comparative success, when success is measured in terms of the three defined activities — creating a business plan, registering the business, or obtaining the first sale. Of particular note was that attending business classes specifically designed to promote entrepreneurship failed to be associated with successful business paths. This research suggests that national governments considering intervention activities might be wiser to focus on structural relationships than on programs specifically targeted to promote certain entrepreneurial activities. The facilitation of entrepreneurial social capital should be more successful if agencies filter their assistance through previous existing social networks. In addition, our findings suggest that countries that lack a very highly educated population may not be at a particular disadvantage regarding entrepreneurial activities.

Careers in and out of Organizations

Book

Jan 2002

Douglas Hall

Alliances and networks

Article

Apr 1998
STRATEGIC MANAGE J

Ranjay Gulati

This paper introduces a social network perspective to the study of strategic alliances. It extends prior research, which has primarily considered alliances as dyadic exchanges and paid less attention to the fact that key precursors, processes, and outcomes associated with alliances can be defined and shaped in important ways by the social networks within which most firms are embedded. It identifies five key issues for the study of alliances: (1) the formation of alliances, (2) the choice of governance structure, (3) the dynamic evolution of alliances, (4) the performance of alliances, and (5) the performance consequences for firms entering alliances. For each of these issues, this paper outlines some of the current research and debates at the firm and dyad level and then discusses some of the new and important insights that result from introducing a network perspective. It highlights current network research on alliances and suggests an agenda for future research.© 1998 John Wiley & Sons, Ltd.

Generalized linear mixed-effects

Chapter

Jan 2008

Generalized linear mixed-effects models, more commonly known as generalized linear mixed models, are very popular in longitudinal data analysis. They are a natural combination of two modeling strands, linear mixed models and generalized linear models. Linear mixed models (e.g., Harville, 1977; Laird and Ware, 1982) are linear regression models that include normally distributed random effects in addition to fixed effects. A natural application is to longitudinal data where the random effects vary between subjects and induce within-subject dependence among repeated measurements after conditioning on observed covariates. Generalized linear models (Nelder and Wedderburn, 1972; Wedderburn, 1974) unify regression models for different response types such as linear models for continuous responses, logistic models for binary responses, and log-linear models for counts.

A Guide to Econometrics

Article

Dec 2000

Self-efficacy: the exercise of control

Book

Jan 1997

A. Bandura

Toward Unlocking The Full Potential of Acquisitions: The Role of Organizational Restructuring

Article

Aug 2008

Building on behavioral theory, we study when and how firms unlock synergy from acquisitions over extended periods of time. We argue that initial integration is inevi-tably suboptimal and that, as a result, acquisitive growth decreases an acquirer'sperformance, eventually forcing it to engage in organizational restructuring to more fully unlock the synergistic potential. Hence, we conceptualize organizational restructuring as a second stage in the integration process. Moreover, we theorize about how acquisition-restructuring cycles evolve as firms gain acquisition and restructuring experience. We tested our theory using panel data on firms undertaking almost 1,600 acquisitions over four decades.

A multimethod examination of the benefits and detriments of intragroup conflict

Article