INTERACTION BETWEEN FEASIBILITY AND DESIRABILITY IN THE

FORMATION OF ENTREPRENEURIAL INTENTIONS

Jason R. Fitzsimmons
Universitas 21 Global
Singapore
Phone: +65-6410-1300
Fax: +65-6410-1358
Email: [email protected]

Evan J. Douglas*
University of the Sunshine Coast
Queensland, Australia
Phone: +61-7-5430-1230
Email: [email protected]

* Contact author

Keywords: Entrepreneurial intentions, desirability-feasibility interactions

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INTERACTION BETWEEN FEASIBILITY AND DESIRABILITY IN THE

FORMATION OF ENTREPRENEURIAL INTENTIONS

Abstract

The literature argues that entrepreneurial intentions depend on perceptions of desirability

and perceptions of feasibility. Research in other fields suggests that there will be an
interaction effect between these two main antecedents of intentions, but such interaction
has not been investigated in the context of entrepreneurial intentions. In this paper we
explore this interaction effect in an expectancy framework, hypothesizing a negative
interaction effect between perceived desirability and perceived feasibility based on
regulatory focus theory. A large multi-country sample confirms this negative interaction,
and suggests a novel typology of nascent entrepreneurs as natural entrepreneurs,
accidental entrepreneurs, and inevitable entrepreneurs.

Executive Summary

Understanding the formation of entrepreneurial intentions is important for our

understanding of the study of entrepreneurial behavior (Shane & Venkataraman, 2000).

Krueger and colleagues have established that the antecedents of entrepreneurial intentions

can be parsimoniously characterized by the individual’s perceived desirability and

perceived feasibility of the entrepreneurial opportunity (Krueger & Brazeal, 1994;

Krueger & Carsud, 1993; Krueger, Reilly, & Carsrud, 2000). To this point only main

effects have been studied, with no consideration given to interaction effects. Yet studies

in other research fields (Conner & McMillan, 1999; Feather, 1988; MacIver, Stipek, &

Daniels, 1991) have argued a multiplicative relationship between the antecedents of

intentions, using expectancy theory (Vroom, 1964) which posits a multiplicative

 3

relationship between expectancy and valence. Steel & Konig (2006) argue that perceived

feasibility aligns with expectancy and perceived desirability aligns with valence.

Accordingly, we expect that perceptions of feasibility and perceptions of desirability may

interact in the formation of the individual’s entrepreneurial intentions.

If there is an interactive effect, should we expect it to be positive or negative?

Using regulatory focus theory (Higgins, 1987; Shah & Higgins, 1997) we argue for a

negative interaction effect, since prospective entrepreneurs are likely to adopt a

‘prevention’ focus when considering whether to invest their time and money into the

exploitation of an entrepreneurial opportunity, following Brockner, Higgins & Low (2004)

who argue that prospective entrepreneurs might adopt a promotion focus initially in the

opportunity recognition phase of the entrepreneurial process, but are likely to adopt a

preventative focus in the viability screening or exploration phase (Choi, Levesque, &

Shepherd, 2008). Accordingly we hypothesize a negative interaction effect between

perceived desirability and perceived feasibility in addition to the main effects.

Our sample comprises 414 MBA students taking an entrepreneurship course in

Australia, China, India or Thailand. We measured entrepreneurial intentions on four

items using a 7-point Likert scale, following Douglas & Shepherd (2002), which

provided good reliability. For perceived desirability we conducted a conjoint experiment

designed to discern attitudes to income, risk, work effort, independence and ownership of

the firm, using a 7-point Likert scale. This followed Douglas & Shepherd (2002) except

that we substituted ‘attitude to majority ownership of the firm’ (in which the respondent

would work) for ‘attitude to net perquisites’ in the earlier study. We argue that the

individual’s attitude to ownership is a parsimonious and sufficient proxy for perceived

 4

desirability. For perceived feasibility we used the entrepreneurial self-efficacy scale

developed by Chen, Greene and Crick (1998) which includes 22 items each measured on

a 5-point Likert scale. Since human capital has been shown to influence the formation of

entrepreneurial intentions (Davidsson & Honig, 2003; Dimov & Shepherd, 2005) we also

included measures of age, gender, and education. And since social norms may influence

behaviors (Krueger & Kickul, 2006) we included dummy variables for the respondents’

country of origin.

We used hierarchical regression analysis, first entering the control variables, then

the perceived desirability and perceived feasibility measures, and finally introducing the

interaction variable. The base model showed only prior self-employment to have a

significant positive relationship with entrepreneurial intentions. The main effects model

showed both perceived desirability and perceived feasibility to be highly significantly and

positively related to entrepreneurial intentions, and the human capital variables of age and

eduction became significant at this point. When the interaction effect was considered it

was found to be negatively and significantly related to entrepreneurial intentions,

confirming our hypothesis, and perceived desirability, perceived feasibility, and prior

self-employment remained significant as before. The results indicate that entrepreneurial

intentions are high when both perceived desirability and perceived feasibility are high,

but are also high when either perceived desirability or perceived feasibility is high (and

the other is low). We argue that the high/low and the low/high combinations represent the

‘inevitable’ and the ‘accidental’ entrepreneur, respectively, and provide support for

Bhave (1994).
 5

This paper makes several main contributions to the entrepreneurial intentions

literature. First we make the case for a negative interaction effect based on regulatory

focus theory and demonstrate this empirically. Second, we introduce a more

parsimonious measure of perceived desirability, this being the attitude towards ownership

of the firm. Third, we demonstrate that perceived desirability and perceived feasibility

need not both be high to induce entrepreneurial intentions, since nascent entrepreneurs

with a high/low combination are also likely to form entrepreneurial intentions. Fourth, we

introduce a taxonomy of nascent entrepreneurs (natural, accidental, and inevitable

entrepreneurs) which may have value in studies of different entrepreneurial types.

Introduction

As intentions have been shown to be a good predictor of subsequent behavior (e.g. Ajzen,

2001; Bagozzi, Baumgartner, & Yi, 1989), understanding the identity and nature of the

antecedent factors that influence entrepreneurial intentions is of crucial importance to the

study of entrepreneurial behavior (Shane et al., 2000). Existing theory suggests that

entrepreneurial intentions are largely a function of perceptions of desirability and

perceptions of feasibility (Krueger, 1993; Krueger et al., 1994; Krueger et al., 2000).

Recent research, however, has suggested that the relationship between these factors might

be more complex (e.g. Krueger et al., 2006).

In addition, recent work on motivation theory in the organisational behavior

literature has explored the close relationship between intentions models and expectancy

theory (Vroom, 1964). Expectancy theory assumes a multiplicative relationship between

expectancy and valence in individual decision making. Steel & Konig (2006) argue that
 6

perceived feasibility aligns with expectancy and perceived desirability aligns with

valence. Thus, there is reason to suggest that perceptions of feasibility and perceptions of

desirability may be expected to interact in the formation of an individual’s intention to

become an entrepreneur. Indeed, several researchers in the organizational behavior

literature have suggested that such an interaction effect is to be expected (e.g. Bandura,

2002; Eagly & Chaiken, 1993; Eccles, Adler, Futterman, Goff, & Kaczala, 1983) and

empirical work has found evidence of an interaction between perceptions of feasibility

and perceptions of desirability in the formation of behavioral intentions in other contexts

(e.g. Conner et al., 1999; Feather, 1988; MacIver et al., 1991).

But while interaction effects have been observed in other contexts, we are not

aware of any study that has investigated the possibility of interaction effects in the

formation of entrepreneurial intentions. If interaction effects are present, they will have

important implications for understanding entrepreneurial behavior. For example, while it

is commonly supposed that an individual requires both high perceived desirability and

high perceived feasibility to be motivated to act entrepreneurially, it may be that strong

entrepreneurial intentions will form as long as either perceptions of desirability or

perceptions of feasibility are above some threshold value.

In the following sections we review existing literature and examine the relationship

between entrepreneurial intentions models and expectancy theory. We subsequently

develop our argument for the existence of a negative interaction effect in the formation of

entrepreneurial intentions. We then outline our sample and methodological approach,

before reporting the empirical results. Lastly, we conclude with our main contributions,

and discuss the limitations and implications of this study for further research.
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Theory

Entrepreneurial Intentions Models

A number of models have been proposed to explain the relationship between an

individual’s personal characteristics and their entrepreneurial intentions (e.g. Ajzen, 1987;

Bird, 1988; Boyd & Vozikis, 1994; Krueger et al., 1994; Shapero, 1982). These have

been largely based on two models in particular, viz: the Entrepreneurial Event Model

(Shapero, 1982) and the Theory of Planned Behavior (Ajzen, 1991). The Entrepreneurial

Event Model views the intention to start a new venture as being dependent on three

elements, these being (i) the perceptions of desirability,(ii) the propensity to act, and (iii)

the perception of feasibility. In contrast, the Theory of Planned Behavior outlines three

key factors that influence an individual’s intention to perform a given behavior, these

being (i) the attitude towards the act,(ii) social norms, and(iii) perceived behavioral

control. Both of these models have been shown to be powerful in predicting

entrepreneurial intentions (Krueger et al., 2000). Brannback et al. (Brannback, Carsrud,

Elfving, Kickul, & Krueger, 2006) see entrepreneurial models being primarily dependent

on perceived desirability and perceived feasibility. While the social norms element is

also thought to influence entrepreneurial intentions, several empirical studies (e.g.

Krueger et al., 2000; Li, 2007) have found little evidence of this. Consequently, we align

our study with the predominant view that entrepreneurial intentions are seen as a function

of preceived desirability and perceived feasibility.

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Interaction of perceived desirability and perceived feasibility

Expectancy theory (Vroom, 1964) suggests that an individual will act in a certain

way based on the expectation that the act will be followed by a given outcome

(expectancy) and on the attractiveness of the outcome to that individual (value or

valence). Steel and Konig (2006) suggest that behavioral intentions models bear close

similarity to expectancy-valence models and that expectancy theory can be assimilated

into the Theory of Planned Behavior (TPB) framework (Ajzen, 1991). Indeed, they

further suggest that Bandura (2002) integrates the TPB into the traditional expectancy

framework. Steel and Konig (2006) suggest that self-efficacy theory is closely related to

expectancy if not identical in some respects. In addition, they note that Gollwitzer (1996)

states that “preferences are established by employing the evaluative criteria of feasibility

and desirability”. Thus, feasibility is related to expectancy and desirability is a form of

value (Steel et al., 2006).

The expectancy model assumes a multiplicative relationship between expectancy and

valence. Individuals considering a course of action estimate firstly the probability that the

outcome will be achieved and secondly the value of the expected outcome. The

components of expectancy and value are then multiplied together and the action that is

appraised as having the largest expected value is the one most likely to be pursued (Steel

et al., 2006). Prior research in other contexts has found empirical evidence validating this

multiplicative relationship between expectancy and value (e.g. Arnold, 1981).

The relatedness of the TPB and expectancy frameworks suggests that interaction

effects might be expected in the context of entrepreneurial intentions. Indeed, a number

of behavioral science studies outside the entrepreneurship domain have found support for
 9

such an interaction effect between factors related to perceived feasibility and perceived

desirability (e.g. Bandura, 2002; Conner et al., 1999; Eagly et al., 1993; Eccles et al.,

1983; Feather, 1988; MacIver et al., 1991). These indicate that it seems likely that

entrepreneurial intentions are, in the general case, not only a function of the main effects

of perceived feasibility and perceived desirability but also a function of the interaction

between these factors.

Greater understanding of these observed interactions is offered by regulatory focus

theory (Higgins, 1987, 1998; Shah et al., 1997), which suggests that individuals regulate

their behavior by adopting one of two perspectives in order to achieve desired ends

(Baron, 2004). One of these perspectives is a promotion focus, where the ultimate goal

sought by individuals is accomplishment of positive outcomes. The second is a

prevention focus, where the goal sought by individuals is safety, and where negative

outcomes are to be avoided. Promotion- and prevention-focussed self-regulation differ

depending on the underlying motives people are trying to satisfy, the nature of the goals

they are trying to attain, and the types of outcomes salient to the individual (Brockner et

al., 2004).

Individuals are likely to differ in their predisposition to promotion focus and

prevention focus (Liberman, Idson, Camacho, & Higgins, 1999), with differences in

chronic (or dispositional) regulatory focus for a variety of reasons (see for example

Higgins & Silberman, 1998). The regulatory focus of individuals can also differ

according the situation with which they are confronted (Liberman et al., 1999).

Consequently, an individual’s regulatory focus orientation can depend on both

dispositional and situational factors (Baron, 2004; Brockner et al., 2004).

 10

Shah and Higgins (1997) considered the impact of regulatory focus in an expectancy

framework and suggested that the interaction effects between goal expectancy and goal

value would be positive for individuals with a promotion focus and negative for

individuals with a preventative focus. Their study found empirical evidence confirming

these effects in the context of experiments on university students which included

experiments designed to manipulate an individual’s regulatory focus by framing a choice

situation in terms of either prevention or promotion, thus confirming that situational

contexts may induce individuals to adopt a particular regulatory focus.

Regulatory focus theory has also recently been applied to the entrepreneurial process

(Brockner et al., 2004) who argue that both promotion and prevention regulatory focus

orientations are important for entrepreneurial success, but that different regulatory focus

orientations might be advantageous at different stages of the entrepreneurial process. For

example, they suggest that a promotion focus may be advantageous during the idea-

generation stage of the entrepreneurial process, when multiple alternatives and novel

solutions would be potentially desirable, and individuals adopting a promotion focus

would be more inclined to consider novel solutions to problems.

In contrast, a preventative focus is expected to better serve the individual when

screening a venture idea (Brockner et al., 2004). Having recognized an entrepreneurial

opportunity, the individual undertakes viability screening and at some point in this

entrepreneurial process the individual’s thought processes coalesce from a vague notion

that entrepreneurship might be a good idea to a firm intention to act entrepreneurially

(Choi et al., 2008; McMullen & Shepherd, 2006). In the context of the particular

(situational) opportunity, individuals must decide whether they believe they possess the
 11

necessary skills and abilities required to be successful in this particular entrepreneurial

situation (i.e. feasibility), but also whether the desirability of the entrepreneurial option is

greater than for alternative career options (Douglas & Shepherd, 2000). Given that the

risks associated with entrepreneurship are widely recognised, we contend that in both

viability screening and in forming the intention to act entrepreneurially, the individual

will be cautious about making mistakes and in such situations will tend to be oriented

towards a prevention focus.

Thus, when considering the intention to act entrepreneurially we expect a similar

response to that of the screening process, where attention is drawn to the ways in which

ventures can fail and which, as suggested by Brockner et al. (2004), is consistent with a

prevention-focused orientation. Therefore, when forming the intention to act

entrepreneurially, we expect the situational aspects to induce individuals who are in the

process of forming entrepreneurial intentions to adopt a prevention focus. Consequently,

we offer the following hypothesis:

H1: Perceived feasibility and perceived desirability will have a negative interaction effect

in the formation of entrepreneurial intentions.

Method

Our sample is 414 MBA students taking an entrepreneurship course in Australia,

China, India or Thailand (n = 46, 39, 204 and 125 students respectively). The surveys

were undertaken between late 2003 and late 2004, in the first class of the course before

any instruction in entrepreneurship took place. In each country the sample was generally
 12

similar in characteristics such as age (averages between 26.6 and 30.5 years), work

experience (averages between 4.7 to 9.4 years) and prior educational background, which

allowed us to focus on other aspects relating to their perceived desirability of

entrepreneurship, perceived entrepreneurial abilities and their entrepreneurial intentions.

These individuals may be considered potential entrepreneurs, since they were

approaching a career decision point at the end of their MBA programs at which they

might either enter into or return to employment or become a self-employed entrepreneur

(Shepherd & DeTienne, 2005)

Entrepreneurial Intentions

Entrepreneurial intention can be defined as the intention of an individual to set up

a new business venture some time in the future (Thompson, 2009). In this study, we

measured entrepreneurial intentions of the students in the sample using a 7-point Likert

scale ranging from very unlikely (‘1’) to very likely (‘7’) for four items measuring

intentions to engage in a range of entrepreneurial behavior. Following Douglas &

Shepherd (2002) we asked how likely it was that they would (i) start their own firm

within two years, or (ii) at any time in the future. Two other items related to

entrepreneurial intentions involved (iii) the exploitation of a radical innovation or (iv) the

exploitation of an incremental innovation. We used the average scores of these items as

our measure of entrepreneurial intentions, which provided good reliability ( = 0.79).

Perceived Desirability
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To obtain a measure of perceived desirability we used individuals’ entrepreneurial

attitudes derived from a conjoint analysis experiment, again following Douglas &

Shepherd (2002). Respondents were asked to evaluate a series of hypothetical career

profiles and subsequently decide on the attractiveness of each profile presented. Based

on a career scenario provided, respondents were asked to rate the attractiveness of that

career alternative (assumed to be available within two years of graduation) on a seven

point Likert scale anchored by very low attractiveness (‘1’) to very high attractiveness

(‘7’). The hypothetical scenarios presented were based on five career attributes, these

being income, risk, work effort, independence and ownership. The attractiveness ratings

derived for each of these attributes revealed the strength of their preference for each of

these attributes in considering a career option.

Note that our career attributes differ importantly from those used by Douglas and

Shepherd (2002). Whereas they used attitudes toward income, risk, work effort,

independence and net perquisites to predict the desirability of an entrepreneurial career

alternative, we used the first four but replaced net perquisites with the individual’s

attitude to ‘majority ownership of the firm in which they work’. We will now suggest that

this attitude alone is a sufficient proxy for perceived desirability, in a similar manner to

McMullen and Shepherd (2006) arguing that attitude to risk is a sufficient proxy for

perceived desirability of the entrepreneurial action. First, while the attributes of income,

autonomy, risk, work and perquisites are common (with potentially different degrees of

fulfilment) to both entrepreneurial action and employment situations, majority ownership

of the firm is a binary variable – one either does, or does not, own a majority share of the

organization in which one works, according to whether one is self-employed or employed.

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The other four attributes of the career option may be higher or lower in entrepreneurial

self-employment or in organizational employment, but it is the combined effect of the

products of the attitude to them and the career option’s supply of the object of each

attitude that promises greater desirability in one career option or the other (Douglas et al.,

2000). Thus we might see, for example, people who are highly risk averse becoming

entrepreneurs (notwithstanding that aversion) because the combined effect of their

attitudes, each interacting with the opportunity’s fulfilment of the objects of those

attitudes, causes entrepreneurial action to be more desirable than organizational

employment (Douglas et al., 2000).

Second, the individual’s attitude to ownership is expected to capture the career

attributes within the ‘net perquisites’ construct of Douglas & Shepherd (2000; 2002) that

are unique to entrepreneurial self-employment, as distinct from the perquisites that might

also be derived from employment. We expect there to be extrinsic and intrinsic benefits

associated with ownership of one’s own firm that are not available to the individual when

they do not hold a majority ownership position in the firm where they work. These might

include personal choice of business mission, firm location, company car and office fit-out,

inclusion of family members on payroll, choice of organizational structure, roles, and co-

workers, plus other psychic benefits associated with ‘being one’s own boss’ such as

having greater independence in decision-making.

The individual’s attitude to ownership is formed in the context of a specific career

alternative (scenario), which has attributes relating to income, independence, work effort

and risk levels, each of which gives utility or disutility (Douglas et al., 2000).

Accordingly, attitude to ownership can be construed as reflecting the difference in the

 15

utility from these attributes in the entrepreneurial (self-employment) context as distinct

from their expected value in an employment context. This difference in expected utility in

turn reflects the perceived desirability of becoming self-employed in an entrepreneurial

new venture. The use of attitude to ownership as a measure of perceived desirability is

also consistent with Krueger & Brazeal’s (1994) ‘attitude towards the act’ and previous

definitions of perceived desirability in the entrepreneurship context (Krueger et al., 1994;

Shapero, 1982). In addition, when it is derived as a revealed preference, as in this study,

the measure is less likely to suffer from methodological problems such as common

method bias found in many behavioral research studies (Podsakoff, MacKenzie, Lee, &

Podsakoff, 2003).

Perceived Feasibility

Our measure of perceived feasibility was entrepreneurial self-efficacy, which has

been used in several prior studies of entrepreneurial intentions (Krueger et al., 1994;

Krueger et al., 2000). While many researchers consider entrepreneurial self-efficacy as

best conceptualised as a multidimensional construct (McGee, Peterson, Mueller, &

Sequeira, 2009), for this study we required an overall measure of self-efficacy across a

range of entrepreneurial competencies. Consequently, we used the entrepreneurial self

efficacy scale developed by Chen, Greene & Crick (1998) who found significant and

consistent support for this measure as a determinant of intentions to be an entrepreneur.

This scale consists of 22 items measuring an individual’s abilities in performing

entrepreneurial tasks with each item measured on a five point Likert scale ranging from

completely unsure (‘1’) to completely sure (‘5’). Following Chen et al. (1998), we
 16

calculated the total entrepreneurial self-efficacy score by taking the average of the 22

items ( = 0.91).

Control Variables

Since other individual level characteristics have been shown to be associated with

entrepreneurial intentions, we included several control variables. An individual’s human

capital has been shown to be associated with the decision to exploit an entrepreneurial

opportunity, with individuals having greater human capital being more likely to form the

intention to exploit an entrepreneurial opportunity (Becker, 1964; Davidsson et al., 2003;

Dimov et al., 2005). At an individual level, human capital factors such as age, education

and prior business experience have also been shown to be associated with the decision to

exploit an opportunity (Casson, 1995; McMullen et al., 2006; Reynolds, 1997; Shane,

2003; Storey, 1994). Consequently, we include variables to represent individual human

capital such as age, gender, education and business experience. A dummy variable was

also included for those individuals with previous entrepreneurial experience, since their

prior experience with entrepreneurship is expected to influence positively their intention

to become an entrepreneur again (see for example Ajzen, 2001). We note that the

education variable is somewhat problematical in this sample since all MBA candidates

have at least a prior bachelor’s degree, some have a prior Masters degree and a few have

a prior Doctoral degree. Thus there is very little dispersion across the four levels of

education measured for this sample. We also included dummy variables for each country

sample in order to check for differences across the four countries in the study. Although

previous research has shown little evidence of social norms influencing entrepreneurial
 17

attitudes (Krueger et al., 2000), recent research suggests that if social norms are a valid

construct then cultural contexts might be a proxy for such effects (Krueger et al., 2006).

Results

The descriptive statistics and inter-correlations for the sample are given in Table 1.

Note that there are significant positive correlations between measures of perceived

desirability and entrepreneurial intentions as well as between perceived feasibility and

entrepreneurial intentions.

[Insert Table 1 about here]

We used hierarchical regression analysis to investigate the relationship between

entrepreneurial intentions (as the dependent variable) and our measures of perceived

desirability (attitude to ownership) and perceived feasibility (entrepreneurial self-

efficacy). The control variables of gender, education, prior income, prior self-

employment, total prior work experience, and the country dummies were first entered to

form the base model 1 . In the following step we added the perceived desirability and

perceived feasibility variables. Finally, the full model using interaction effects of

perceived desirability and perceived feasibility was tested.

The independent (main) effects model using entrepreneurial intentions as the

dependent variable is shown in Table 2. The main effects model contributed a significant

1
The ‘age’ variable was entered initially but was insignificant in the base model. Although it was weakly
significant in the main effects model, it was insignificant in the model with the interactive term. Since age
was highly correlated with prior income level and total prior experience, it was removed from the analysis.
 18

increase in the explanation of variance, over and above the base model (R2 = 0.19). We

found the human capital variables of education, prior self-employment, and total prior

work experience to be significant determinants of entrepreneurial intentions. Note that

prior self-employment was positively related to self-employment intentions while greater

education and prior work experience were negatively related to entrepreneurial intentions.

We do not find the country dummy variables to be significant, which raises questions

about the role of the social norm construct in explaining entrepreneurial intentions

consistent with Li (Li, 2007). In addition, significant positive relationships were also

found between perceived desirability, perceived feasibility and entrepreneurial intentions,

thus replicating prior studies.

[Insert Table 2 about here]

The full model including interaction effects is shown in the last two columns of

Table 2. The perceived desirability and perceived feasibility variables were first centred

on their means in order to facilitate the interpretation of the interaction (Aiken & West,

1991). We find the interaction term to be negative and significant (p<0.001), suggesting

that interaction effects are indeed present, which provides support for Hypothesis 1. To

illustrate the nature of the interactions, Figure 1 shows the relationship between perceived

desirability and entrepreneurial intentions, for respondents with high perceived feasibility

(one standard deviation above the mean) and low perceived feasibility (one standard

deviation below the mean).

 19

[Insert Figure 1 near here]

The figure illustrates that although individuals with lower perceived feasibility and

lower perceived desirability have significantly lower entrepreneurial intentions, for those

with low perceived feasibility entrepreneurial intentions rise sharply as perceived

desirability increases. Oppositely, for those with high perceived feasibility,

entrepreneurial intentions are already high and increase only slightly as desirability

increases. Notably, the figure illustrates that the intention to act entrepreneurially is not

significantly different between (i) individuals with high levels of both perceived

desirability and perceived feasibility, (ii) individuals with high perceived desirability and

low perceived feasibility, and (iii) individuals with low perceived feasibility and high

perceived desirability.

Discussion

In line with prior studies, we found the individual’s entrepreneurial intention to be

positively related to both perceived desirability and perceived feasibility. In addition, and

in support of our hypothesis, we found evidence of a negative interaction effect between

an individual’s perceived desirability and their perceived feasibility in determining the

strength of their intention to be self-employed. Consistent with McMullen & Shepherd

(2006), we find evidence that individuals with lower levels of perceived desirability (or

‘motivation’ in their terms) may form the intention to act entrepreneurially if they

perceive themselves as having sufficient perceived feasibility (or ‘knowledge’ in their

 20

terms) to do so. But we also find empirical evidence that individuals with strong

perceptions of desirability may form the intention to act entrepreneurially even when they

perceive themselves as not having the perceived feasibility (self-efficacy) to do so.

We also note that the influence of prior entrepreneurial experience becomes more

significant and more positive (compared to the main-effects-only model) when the

interaction term is added to the model. These results suggests that prior entrepreneurial

experience is the most important human capital variable in the determination of

entrepreneurial intentions, and, along with self-efficacy and attitude to ownership,

provides a sufficient characterization of the individual when the interaction between

perceived desirability and perceived feasibility is included in the model of entrepreneurial

intentions.

Although cultural and social differences certainly differ across the countries in the

study, our study showed no significant impact of the country dummies on entrepreneurial

intentions, supporting recent work which finds little evidence of cross-cultural variations

in entrepreneurial intentions (Linan & Chen, 2009)., and thus suggesting the robustness

of entrepreneurial intentions models across cultures.

Next, previous studies (Krueger, 1993; Krueger et al., 1994) have implied that

entrepreneurial intentions are formed when perceived feasibility and perceived

desirability are both high. Our findings suggest that intentions might be high for not only

those with both high perceived desirability and high perceived feasibility, but also for

those with high/low and low/high combinations of these two main effects. Similarly,

traditional expectancy models assume that motivation is strongest when expectancy and

value are both high. However, based on the discussion by Shah & Higgins (1997), we can
 21

expect entrepreneurial intentions to be strong when either perceived desirability is above

some threshold value or when perceived feasibility is above some threshold value. In

such cases, the intention to act entrepreneurially will be formed as long as either

perceived desirability or perceived feasibility is high, in which case we find that high

values of either one of these factors would act to decrease the influence of the other on

the formation of intentions.

For convenience of exposition we can label these hybrid cases as the ‘accidental’

entrepreneur and the ‘inevitable’ entrepreneur, respectively. The accidental entrepreneur

is characterized by high perceived feasibility combined with low perceived desirability,

and the adjective ‘accidental’ conveys the notion that this person does not start out with

any strong desire to become an entrepreneur, but forms the intention to become one after

recognising the high feasibility of entrepreneurial action, after, for example, discovering

an unserved but apparently lucrative market opportunity and/or after discovering a

technology of production that will allow a known market need to be served. Bhave (1994)

called this ‘externally stimulated opportunity recognition’. An example of an accidental

entrepreneur is a career scientist who historically (dispositionally) has had low perceived

desirability of entrepreneurship, preferring instead to practice research and publish papers,

but who then discovers a new technology and gains intellectual property protection for

that technology. This ‘reluctant debutante’ (McMillan, Zemann, & Subbanarasimha,

1987) might then be ‘pushed’ (Smilor & Feeser, 1991) by members of his/her social

network, and perhaps also by investors and employer, to commercialize the technology.

An example of an accidental entrepreneur is Diana Williams, who wanted to get back into

shape after having children, and who started the women-only Fernwood Women’s Health
 22

Clubs in Australia. Diana experienced the problems confronting women in both-sex

gymnasiums and then discovered that she could buy a bankrupt gymnasium for a pittance.

Diana describes herself as an “accidental entrepreneur” (Williams, 2005) who had never

previously considered entrepreneurship and notes that she was encouraged to become an

entrepreneur by friends and investors.

The ‘inevitable’ entrepreneur is the opposite case, with low perceived feasibility

and high perceived desirability. The inevitable entrepreneur has a strong and ongoing

desire to become an entrepreneur and may explore many entrepreneurial opportunities

before ultimately forming the intention to act entrepreneurially (McMullen & Shepherd,

2006; Choi et al, 2008) when a sufficiently attractive opportunity presents itself. Bhave

(1994) calls this ‘internally stimulated opportunity recognition’. This person typically

may not have the self-efficacy (nor the underlying skills, education and experience) that

will ensure successful entrepreneurial action, but is very highly motivated to be one’s

own boss and subsequently forms the (potentially ill-fated) intention to become an

entrepreneur. Their strong desire to be an entrepreneur may cause them to be ‘pulled’

(Smilor et al., 1991) into new ventures that are neither necessarily lucrative nor long-

lived. It may be useful to depict this taxonomy in terms of Figure 2, where the accidental

and inevitable entrepreneurs are contrasted with the high-feasibility high-desirability

individual, who for expositional convenience we might call the ‘natural’ entrepreneur,

and the low-feasibility low-desirability individual who we might call the ‘non-starter’

(non-entrepreneur).

[Insert Figure 2 near here]

 23

A typology of entrepreneurs along these lines might be useful for further research

into the entrepreneurial process. Gartner (1985) notes that the characteristics of new

ventures, and of the characteristics of the entrepreneurs who start them, vary widely.

Shane & Venkataraman (2000) argue that we should be concerned with the individual-

opportunity nexus, and consider the heterogeneity that exists on both sides of that nexus.

Bhave (1994) argues that developing typologies of entrepreneurs is important for research

comparisons across entrepreneurial types, as it will serve to enhance the external validity

of research studies in entrepreneurship. For example, studies of differential birth, survival,

growth, and profitability rates amongst new venture firms (see for example McMillan et

al., 1987) might be usefully correlated with the type of entrepreneur (natural, accidental,

or inevitable) at the helm, where the typology usefully and succinctly summarizes their

underlying perceptions of desirability and feasibility.

Conclusion, Limitations, and Implications

In this study we make four main contributions to the literature. First, we argue the

case for a negative interaction effect between perceptions of feasibility and perceptions of

desirability in the formation of entrepreneurial intentions using an expectancy-value

approach (Vroom, 1964) and by incorporating regulatory focus theory (Higgins, 1987,

1998; Shah et al., 1997). Second, we introduce a more parsimonious measure of

perceived desirability – we argue that the individual’s attitude to majority ownership of

the firm in which he/she works is a sufficient proxy for the perceived desirability of
 24

entrepreneurial action and more effectively captures the differences between

entrepreneurship and employment. Third, we demonstrate that entrepreneurial intentions

may be high even when one of the two main determinants, perceived desirability and

perceived feasibility, are relatively low. Lastly, on the basis of our findings we propose a

categorization of entrepreneurial types (natural, accidental and inevitable, based on their

combinations of perceived feasibility and perceived desirability) which might prove

useful in studies where it is convenient to classify types of entrepreneurs in the

investigation of other aspects of the entrepreneurship process or entrepreneurial behavior.

There are nonetheless several important limitations to this study. The first concerns

generalizability – these results may not be generalizable to the wider populations of

Australia, China, Thailand and India, nor to other populations, since our sample was

better educated and on average younger than the general populations. We note that

neither education nor age was a significant determinant of entrepreneurial intentions in

the final model, and that the country dummies were also not significant.

A related issue is the use of students as subjects, which has been criticized by some

(Copeland, Francia, & Strawser, 1973; Robinson, Huefner, & Hunt, 1991) but others

have argued that graduate business students are sufficient proxies for business executives

in some contexts (Khera & Benson, 1970) including the entrepreneurial context (Gaglio

& Katz, 2001; Shepherd et al., 2005). Our sample was of students who were taking an

entrepreneurship course and as such, we can argue that our sample more likely represents

people with a strong interest in becoming an entrepreneur than would samples of non-

business students or business students enrolled in non-entrepreneurship courses. Indeed,

the mean intention to become an entrepreneur was 5.38 on a 7-point scale, indicating
 25

relatively high intentionality across the sample, although this is consistent with previous

studies of entrepreneurial intentions (e.g. Chen et al., 1998; Zhao & Seibert, 2005).

A third concern with the sample might be that the respondents may have exhibited

‘interviewer bias’ and produced responses that they felt were the ‘right’ answers given

the course material they already had in their possession at the time of the survey. But note

that the survey was conducted in the first hour of the first class of the entrepreneurship

course, before any instruction in the principles of entrepreneurship had taken place, and it

is considered highly unlikely that any students had read any of the course material other

than the ‘opportunity recognition’ module assigned for the first class, and indeed it is

considered unlikely that many of the students had even read this module prior to class.

Fourthly, although we argued that individuals will adopt a negative regulatory focus

when they are forming entrepreneurial intentions, we have speculated that our sample

respondents would have adopted a negative regulatory focus when assessing the

desirability of the career alternatives presented, and we cannot be sure from this study

that this is true. Respondents were aware of the degree of risk, and of work effort

required, (high or low) in each career scenario when assessing the desirability of each

scenario, and we speculate that this would likely have induced a preventative regulatory

focus. In future studies we would want to frame the scenarios more forcefully to more

reliably induce a preventative focus in respondents.

This paper identifies several avenues for further research into entrepreneurial

intentions. Further research might include attempts to replicate this study in other national

contexts and across more widely representative samples. Next, future research might

employ a more reliable method for ensuring that respondents do indeed adopt a
 26

preventative regulatory focus in the viability screening process, rather than simply

assuming they would, as we do, following Brockner et al (2004). Several other interesting

research issues have arisen in this paper. Can a reliable measure of an individual’s

attitude to ownership be gathered more economically as the (espoused) responses to a

simple questionnaire, rather than revealed from the time-consuming and complex

conjoint analysis of attitudes? Is the process by which entrepreneurial intentions are

formed different for novice vs. serial entrepreneurs? That is, are attitudes less important

as the behavior becomes habitual? Is the entrepreneurial process different for accidental

entrepreneurs versus inevitable entrepreneurs? Are accidental entrepreneurs characterized

by attitudinal ambivalence, and/or do they conduct more information search and

processing (i.e. due diligence activity) than do natural entrepreneurs or inevitable

entrepreneurs? These questions indicate that there is much scope for further research in

this area.
 27

Table 1

Descriptive statistics and Inter-correlation matrix

Mean Std.dev. 1 2 3 4 5 6 7 8
1. Intentions 5.38 1.26
2. Age 28.54 4.91 0.05
3. Gender (1=Female) 0.28 0.45 -0.05 -0.11*
4. Education 2.29 0.49 -0.11* 0.04 -0.01
5. Prior Income level 3.00 2.34 0.05 0.40* -0.09 0.06
6. Total Prior Experience 6.00 4.64 0.03 0.91** -0.11* -0.01 0.43**
7. Perceived Desirability 0.33 0.63 0.40** 0.03 -0.02 -0.03 0.18** 0.08
8. Perceived Feasibility 3.79 0.53 0.21** 0.08 -0.16** 0.11* 0.03 0.11* 0.01
9. Desirability x Feasibility 0.01 0.41 -0.06 0.03 -0.03 0.08 0.01 0.06 0.04 0.24**
* p<0.05, ** p<0.01, n=409
 28

Table 2

Hierarchical Regression Analysis. Dependent variable: Entrepreneurial Intentions.

Base Model Independent Effects Only Interaction Effects

B Standardised B Standardised B Standardised
Constant 4.85 *** 2.26 ** 2.96 *
Sex -0.15 -0.05 -0.07 -0.03 -0.07 -0.02
Education -0.26 -0.10 -0.27 * -0.10 -0.24 -0.07
Prior Income 0.01 0.02 -0.02 -0.04 -0.03 -0.05
Prior Self-Employed 0.74 *** 0.19 0.46 * 0.12 0.46 * 0.12
Total Prior Experience -0.05 -0.18 -0.07 * -0.24 -0.01 -0.02
Dummy for CHINA 0.03 0.01 -0.04 -0.01 -0.09 -0.02
Dummy for INDIA -0.18 -0.07 -0.22 -0.09 -0.21 -0.09
Dummy for THAILAND 0.10 0.03 0.05 0.02 0.17 0.06
Perceived Desirability 0.74 *** 0.37 0.74 *** 0.36
(Attitude to Ownership)
Perceived Feasibility 0.60 *** 0.25 0.71 *** 0.30
(Entrepreneurial Self-Efficacy)
Perceived Desirability X -0.49 *** -0.16
Perceived Feasibility

R2 0.07 0.26 0.28

Adjusted R2 0.05 0.23 0.25
Change in R2 0.19 0.02
* p<0.05; ** p<0.01; *** p<0.001; n=374
 29

Figure 1: Perceived Desirability x Perceived Feasibility Interaction

for Entrepreneurial Intentions

5
Entrepreneurial Intentions

2
Low Perceived Feasibility (Self-efficacy)

1
High Perceived Feasibility (Self-Efficacy)

0
Low High
Perceived Desirability
(Motivation)

Figure 2: Suggested Typology of Entrepreneurs

Accidental Natural
High entrepreneur entrepreneur
(sufficiently (very high
high intention) intention)
Perceived
Feasibility
Non- Inevitable
entrepreneur entrepreneur
Low (low intention) (sufficiently
high intention)

Low High
Perceived Desirability
 30

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