J Int Entrep (2015) 13:452–476

DOI 10.1007/s10843-015-0144-x

The effects of demographic, cognitive and institutional

factors on development of entrepreneurial intention:
Toward a socio-cognitive model of entrepreneurial career

Los efectos de factores demográficos, cognitivos

e institucionales, sobre el desarrollo de la intención
emprendedora: hacia un modelo socio-cognitivo
de carrera empresarial

Ali Dehghanpour Farashah

Published online: 10 March 2015
# Springer Science+Business Media New York 2015

Abstract Upon a well-established theoretical foundation Social Cognitive Career Theory;

Lent, Brown, and Hackett (J Vocat Behav 45:79–122, 1994; J Couns Psychol 47:36–49,
2000), this study examines the effects of cognitive, affective, social, demographic, and
contextual factors on the development of entrepreneurial intention. To test the hypotheses,

Summary Highlights Contributions: This study examines the role of the entrepreneur’s agency as well as the nature
of opportunity and context on the development of entrepreneurial intention in an integrated manner. The integration of
agency and opportunity as proposed by the research design and the use of multi-country multilevel data is novel in the
literature. The results highlight the relative importance of both cognitive and institutional factors and explain the
interaction of the factors.
Research questions/purpose: The aim of research is to examine: (a) the extent of influence of cognitive factors including
entrepreneurial self-efficacy beliefs emanated from sources of self-efficacy and entrepreneurial career outcome expec-
tations on entrepreneurial intention, and (b) the extent of influence of institutional factors including regulatory, cognitive,
and normative dimensions on sources of self-efficacy.
Results/findings: The results endorse the notion that multiple and multilevel, rather than single, factor explanations are
required to explain the mechanism of development of entrepreneurial intention more effectively. It emerges that
institutional, cognitive, and demographic factors all matter. More specifically, actors who seek to launch a business
appear to be differentially placed according to their national context, demographics, and access to sources of self-efficacy.
Theoretical implications and recommendations: This study first provides empirical evidence for verification of social
cognitive career theory in the context of entrepreneurship. The results also reveal that among three dimensions of
entrepreneurship institutional profile, normative dimension and among sources of entrepreneurial self-efficacy, personal
mastery, and vicarious learning are the most influential factors on the development of entrepreneurial intention.
Practical implications and recommendations: This study proposes new perspectives on the establishment of
institutional profile and policies (a) to provide better access to sources of self-efficacy and to influence individual
cognitive processes alongside regulating the structure of the market and competition and (b) to provide students
of entrepreneurship education programs with the opportunity to have a close encounter with the real world of
entrepreneurship such as networking with real entrepreneurs, exercising entrepreneurship in a simulated environ-
ment, and investing in entrepreneurial ventures.
A. Dehghanpour Farashah (*)
Umea School of Business and Economics, Umea University, Biblioteksgränd 6, Umeå 90187, Sweden
e-mail: ali.dehghanpour@umu.se
A socio-cognitive model of entrepreneurial career 453

binary logistic regression analysis was conducted using data from Global Entrepreneurship
Monitor survey in which 183,049 individuals nested within 54 countries that participated.
Entrepreneurial self-efficacy beliefs and entrepreneurial career outcome expectations are
significantly correlated with entrepreneurial intention. Mastery experience including pre-
vious business ownership, entrepreneurial activity as part of a regular job or investing in a
venture, exposure to a role model, social persuasion through media, and fear of failure are
significant sources of entrepreneurial self-efficacy. A moderate relationship exists between
country-level institutional profile and the sources of self-efficacy.

Resumen Sobre una base teórica bien establecida (Teoría de Carrera Cognitiva Social),
este estudio examina los efectos de factores cognitivos, demográficos y contextuales, en
el desarrollo de la intención emprendedora. Para probar las hipótesis, se realizó un
análisis de Bregresión logística binaria^. Los datos fueron recogidos mediante la
encuesta BGlobal Entrepreneurship Monitor^ en la que participaron 183,049 personas
de 54 países. Creencias de autoeficacia emprendedora y expectativas de carrera
empresarial se correlacionaron significativamente con la intención emprendedora.
Tener un negocio, actividad emprendedora como parte de un trabajo regular, invertir
en una empresa, tener un modelo a seguir, la persuasión social a través de medios de
comunicación y el miedo al fracaso, son importantes fuentes de autoeficacia
emprendedora. Existe una relación moderada entre el perfil institucional del país y las
fuentes de autoeficacia.

Keywords Social cognitive career theory . Outcome expectations . Self-efficacy .

Entrepreneurial intention . Institutional profile

Introduction

Entrepreneurship is defined as the Bnexus of opportunity and agency^ (Shane and

Venkataraman 2000). The intentional actions of entrepreneurs are shaped within the
context of the social and economic system. Researchers from a broad spectrum of
disciplines have formed hypotheses about individual and contextual determinants of
entrepreneurial intention and have included wide groups of factors that are related to
either the entrepreneur or the opportunity. Researchers have discussed the role of the
agency and characteristics of the entrepreneur (e.g., locus of control and creativity) as well
as the nature of opportunity (e.g., country-specific institutional environment, national
culture, and local competitive forces) on entrepreneurial intention across many countries
(Zahra and George 2002; Estay et al. 2013). However, the relationship between socio-
economic environment and entrepreneur has not been considered adequately (Sarason
et al. 2006). One step toward closing this gap would be to conduct multi-country studies in
order to measure the effects of both country-level and individual-level differences on
intention. Specifically, examining the effects of extant country-level institutional factors as
well as individual-level internal cognitive processes on the formation of entrepreneurial
intention assists us to explain entrepreneurship as a dynamic reflexive process through
which a purposeful agent interprets and acts upon opportunities and institutional factors in
the environment, as defined by Shane and Venkataraman (2000).
454 A.D. Farashah

The economic, sociological, and personality trait theories of entrepreneurship pos-

tulate that certain types of structure of economic incentives, sociological and cultural
factors, and personality traits appear to have an impact on entrepreneurial activity
(Xie 2014; Zhao et al. 2010; Mitchell et al. 2002). For instance, neoclassical
economists argue that market conditions systematically regulate the level of entrepre-
neurship (Hamilton and Harper 1994), and Thornton (1999) and Zafirovski (1999) assert
the role of gender roles, social class, social network, morality, religious faith, and
ethnicity in entrepreneurial intention. The economic and sociological theories, while
explaining entrepreneurial response, take into account the role of immediate context (e.g.,
role model), broad context (e.g., culture and support institution), and embeddedness (e.g.,
social network) and put less emphasis on the role of human agency (Bögenhold et al.
2014; Xie 2014). Furthermore, Sánchez (2012) suggests that entrepreneurship intention
research should focus more on cognitive and social processes which encompass both
internal cognitive (e.g., values and self-efficacy) and external institutional (e.g., perceived
support) factors. Psychological stream has attempted to explain the role of cognitive
processes, non-monetary motivations, and internal state of mind in entrepreneurial
behavior and intention (Zhao et al. 2010; Baum, et al. 2014, p. 14). Although, due to
isolated consideration of psychological or demographic characteristics and the lack of
comprehensiveness, future research needs to address conditions, context, and mediating
processes that affect the relationship between individual differences and entrepreneurial
behavior (Rauch and Frese 2007). Therefore, this may be an appropriate time for
developing integrative models explaining the effects of country-level institutional factors
on entrepreneurial intention at the individual level.
A socio-cognitive approach is an appropriate approach for exploring the effects of
institutions and cognitive processes on intention (Vaillant and Lafuente 2007; Uhlaner
and Thurik 2004). Utilizing the social cognitive theory of career (Lent et al. 1994), the
current study aims at incorporating the role of individual-level cognitive processes and
country-level institutional factors in forming the entrepreneurial intention. Considering
both cognitive processes and institutional factors in a single study, the current study
reflects a progress in extending the multi-disciplinary study of entrepreneurship. Social
Cognitive Career Theory (SCCT), derived from Bandura’s (1986) general social
cognitive theory, asserts the process by which individuals exercise control and agency
in career selection, as well as the role of institutional factors in enhancing or limiting the
agency (Lent et al. 1994). Bandura (2001) asserts that agency operates within a broad
context of institutional influences. This is in accordance with Shane and
Venkataraman’s (2000) view of entrepreneurship as an interaction between a purposeful
entrepreneur and opportunity that is embedded in the environment. SCCT can make
unique contributions to model entrepreneurship as an emergent agency interacting with
institutional factors and to understand entrepreneurial intention formation, develop-
ment, and change. The theory focuses on the constructs of self-efficacy and outcome
expectations and their relationship with institutional influences and contextual
affordances. Agentic perspective is another contribution of the current study. This
perspective can assist us in better understanding of the perceptions of institutional
factors at the individual level and the mechanisms at play through which these
institutions create intention.
Applying the Social Cognitive Career Theory, Vanevenhoven and Liguori (2013)
studied the underlying motivational processes which encourage students to pursue an
A socio-cognitive model of entrepreneurial career 455

entrepreneurial career. By initial analysis of a culturally and geographically diverse data

set, they concluded that a number of entrepreneurship courses significantly and posi-
tively correlate with the core SCCT constructs. Their research concentrates on entre-
preneurship education and leaves the discussion open on the effects of other types of
environmental influences and incentives. Further studies on SCCT in the context of
entrepreneurship are required to provide a consistent set of findings in this area (Zhao
et al. 2005). Gathering data from individuals in diverse cultural and economic milieus
permits to empirical testing of cross-cultural generalizability of SCCT (Bandura 2002).
In order to develop entrepreneurship literature further, researchers need to study real
entrepreneurs at the aggregate level (Fernández et al. 2009). It is necessary to sample
actors who are developing and shaping their entrepreneurial intention in a real setting,
rather than students who prioritize interests over environmental contingencies (Rotefoss
and Kolvereid 2005; McGee et al. 2009). This study uses profiles of individuals across
54 countries that are provided by Global Entrepreneurship Monitor.
In the remainder of the paper, previous research on the main components of SCCT in
the entrepreneurship literature is first reviewed. Then, an elaboration of the SCCT in the
context of entrepreneurship is presented. Consequently, using the data provided by
Global Entrepreneurship Monitor, the role of individual demographic and cognition as
well as that of country institutions in forming the entrepreneurial intention is empiri-
cally examined. The final section proposes some practical and theoretical implications,
discusses limitation, and suggests some new ideas for future research.

Theoretical background

Economics, sociology, psychology, political sciences, and different streams of man-

agement literature have tried to extend our theoretical understanding of the factors
affecting entrepreneurship. Economic theories have an outcome-based approach and do
not consider entrepreneur characteristics and, therefore, are not able to answer the
internal mechanism of occurrence of entrepreneurial intention (Mitchell et al. 2002). To
broaden purely economic modeling of the entrepreneurship phenomenon and consid-
ering non-rational, non-utilitarian, political, and altruistic factors, many researchers
have adopted a sociological perspective. The sociological perspective of entrepreneur-
ship has explored the role of social context such as social networks, cultural-historical
factors, gender roles, social class, morality, religious faith, and ethnicity in entrepre-
neurial behavior (Zafirovsky 1999; Thornton 1999). The sociological perspective has
concluded that the social, societal, and institutional context may either create or
constraint opportunities for performing an entrepreneurial activity (Johns 2006).
Therefore, these factors are important for understanding when, how, and why entre-
preneurship occurs and who becomes involved (Welter 2011). From a psychological
perspective, a substantial amount of research has examined the effects of individual
factors on entrepreneurial behavior. The psychological perspective incorporates a
variety of variables including biological determinants such as temperament, personality
types (e.g., Big Five personality traits), motives (e.g., need for achievement), and
generalized attitudes and beliefs (e.g., self-efficacy) (Kanfer 1992).
The current study applies SCCT in the context of entrepreneurship to explain the
formation of entrepreneurial intention through entrepreneurial cognitions as well as the
456 A.D. Farashah

institutional factors. Mitchell et al. (2002) define entrepreneurial cognitions as Bthe

knowledge structures that people use to make assessments, judgments, or decisions
involving opportunity evaluation, venture creation, and growth.^ SCCT proposes a
unifying theory in which institutional, cognitive, and demographic variables jointly
determine the formation and elaboration of career interest, choice, and performance. A
recent meta-analysis by Sheu et al. (2010) summarized the empirical research on SCCT
and validated the proposed relations among the core cognitive constructs, the effects of
contextual supports, and the barriers in SCCT.
One of the core constructs in SCCT is the notion of goal which is key to under-
standing human motivation and development as it gives a sense of purpose and
direction to people’s behavior (Vanevenhoven and Liguori 2013). Entrepreneurial
intention is considered to be the goal in the context of this study. Figure 1 presents
an overview of the application of the theory in the context of entrepreneurship.

Self-efficacy

Self-efficacy has repeatedly been reported as an important antecedent to entrepreneurial

intention. Simply stated, it refers to the people’s judgment of their ability to success-
fully start a new venture. Ajzen’s (1991) Theory of Planned Behavior is widely adopted
and applied to examine the effects of perceived behavioral control (i.e., self-efficacy)
on intention. There is a tremendous amount of robust studies that assert the relationship
between self-efficacy and intention (Kickul et al. 2009).
The expressions of career interest, the degree of ambition in the career goal, and the
level of effort and persistence in achieving the career goal are affected by self-efficacy
(Gist 1987). An entrepreneurial career is a challenging and demanding career. People
with stronger beliefs regarding their entrepreneurial capabilities will be more persistent
in showing their interest and will exert greater effort to achieve their goals. Moreover,
self-efficacy reflects the one’s perceived abilities in doing a task. People’s motivation
and courses of actions are based more on their beliefs in their capabilities than on the
objective reality. In the context of entrepreneurship, Krueger and Dickson (1994) stated
that the perception of self-efficacy is even more important than actual skills as a
determinant of entrepreneurial behavior. Following the notion that stronger beliefs lead

H2, H3 En
ntrepreneurial H1
Self-efficacy
S
Entrep preneurship Sourcess of Self-efficaccy
Instituttional Profile (Masteryy Experience, Role Career Cho
oice
(Regulatory, Normative, H6 Model, Social Persuasion, (Entrepreneuurial
H5
Psychological and Emotionaal Intention))
Coognitive)
State)

Outcome
H4

Gray shadding indicates coountry-level coonstruct; other vvariable are at thhe individual leevel.
Fig. 1 Mechanism of the impact of demographic, institutional, and cognitive factors on entrepreneurial
intention, elaboration based on Lent et al. (1994). Gray shading indicates country-level construct; other
variable are at the individual level
A socio-cognitive model of entrepreneurial career 457

to a higher level of effort and persistence, the fact that belief about skills is more
important than the objective beliefs and based on the previous research on self-efficacy,
hypothesis 1 is proposed:

Hypothesis 1: there is a positive relationship between entrepreneurial self-efficacy

belief and entrepreneurial intention.

Furthermore, the current study attempts to advance the understanding of entrepre-

neurial self-efficacy belief by considering its sources. SCCT states that self-efficacy is
largely determined by four sources: (a) personal mastery which refers to repeated
challenges, experiences, and successful performances under varying conditions that
are related to entrepreneurship; (b) vicarious learning which pertains to observing
similar others performing entrepreneurial activities; (c) social persuasion; and (d)
psychological state which reflects the state of mind held during formation of intention,
such as anxiety or feeling of composure (Bandura 1986; Lent et al. 1994). Previous
entrepreneurship research has studied these sources and asserted their positive roles on
entrepreneurial self-efficacy and intention. Zhao et al. (2005) showed the mediatory
role of self-efficacy in the relationship between previous entrepreneurial experience and
formal education and entrepreneurial intention. BarNir et al. (2011) observed the
mediating role of self-efficacy in the positive relationship between exposure to entre-
preneurial role models and intention. Erikson (1999) found a strong relationship
between social persuasion and entrepreneurial intention. Regarding the effects of
psychological state, Welter et al. (2013) found a significant relationship between
judgment of one’s own psychological state and entrepreneurial self-efficacy. The
arguments and hypotheses regarding the effects of sources of self-efficacy on entrepre-
neurial self-efficacy beliefs are presented in the following paragraphs.
Confronting a challenging task frequently and being successful in accomplishing it
result in personal mastery. Dealing with similar tasks in the past influences future
judgment of self-efficacy regarding the task (Berry and West 1993). Frequent accom-
plishment of entrepreneurial tasks acts as a positive reinforcement and gradually
reinforces beliefs about one’s own capabilities and skills. Specifically, undergoing a
challenging and stressful situation such as a previous attempt to launch a venture affects
entrepreneurial self-efficacy beliefs positively (Welter et al. 2013). Therefore, it is
hypothesized that

Hypothesis 2-1: entrepreneurial self-efficacy beliefs are positively related to per-

sonal mastery.

By observing a role model who is engaged in entrepreneurship, an individual

realizes that development and possession of the entrepreneurial capabilities and skills
is attainable. Furthermore, the observer can learn from the role model the right attitudes,
methods, and strategies which can be applied during the process of starting a business.
Social learning theory states that learning as a change in cognition can take place
through pure observation. Knowing role models, observing their behavior s, and
getting feedback from them may change the observer’s beliefs regarding entrepre-
neurship. These significantly affect the formation of individual beliefs regarding an
entrepreneurial career.
458 A.D. Farashah

Hypothesis 2–2: entrepreneurial self-efficacy beliefs are positively related to

exposure to role models.

Persuasion in the form of success stories which are disseminated through public
media show practicality and desirability of entrepreneurship and influences people in a
way that they assess themselves as capable potential entrepreneur and in possession of
the necessary skills to start a business. Persuasion can convince individuals that they are
able to cope successfully with the challenge of launching a venture due to the
Pygmalion effect. The Pygmalion effect is a type of self-fulfilling prophecy and states
that raising the expectations placed upon people encourages their performance
(Eden 1993). The Pygmalion effect supports the social persuasion process which
refers to the higher level of self-efficacy beliefs due to the higher level of expectations
(Gist 1987). Therefore, it is hypothesized that

Hypothesis 2-3: entrepreneurial self-efficacy beliefs are positively related to per-

suasive social environment.

Positive physiological sensations are more likely to lead a person to feel confident in
their ability to handle the situation at hand. People associate failure with negative
feelings and success with pleasant feelings. The presence of a negative state such as
fear might recall the unpleasant feeling of adversity which would decrease the intention
to act (Welter et al. 2013).

Hypothesis 2-4: entrepreneurial self-efficacy beliefs are negatively related to

negative psychological state.

Measuring the relative effects of the four sources of self-efficacy within entrepre-
neurial learning context can provide useful information for entrepreneurship policy
makers and pedagogical content developers. Zhao et al. (2005) mixed the effect of role
models, social persuasion, and personal mastery in one variable entitled Bperception of
formal learning^ and showed that it has a larger effect on self-efficacy than entrepre-
neurial experience. Generally, direct personal experiences and accomplishments are
viewed as the most influential source of self-efficacy (Bandura 1986). Persuasion, role
models, and emotions have a short-term effect and have less potential in changing self-
efficacy since it is not associated with real experience of the situation and tangible
change in skills. On the contrary, personal mastery pertains to acquiring new knowl-
edge and skills and practicing or observing the application of them which in turn leads
to learning and stable behavioral changes. Therefore, hypothesis 3 is proposed:

Hypothesis 3: personal mastery is more influential in forming self-efficacy beliefs

than vicarious learning, social persuasion, and psychological state.

Outcome expectations

Outcome expectation referring to personal beliefs about consequent benefits and costs
of performing a certain behavior is another basic construct in SCCT and a major
A socio-cognitive model of entrepreneurial career 459

influence in shaping career choice. Evaluating expected consequences and the decision
to engage in an action based on this evaluation is the central idea of expectancy-value
theories such as Vroom’s (1964) Expectancy Theory. These models and theories existed
before proposing the notion of self-efficacy was proposed (Williams 2010). Outcome
expectation reflects the belief in consequences of performing entrepreneurial activities.
Therefore, desirability of the outcomes leads to a clear goal and goal-oriented behavior
including planning, aspiration, and behavioral change (Betz and Voyten 1997).
Outcome expectations affect entrepreneurial intention directly and indirectly by medi-
ating the relationship between self-efficacy and intention. When outcomes are loosely
predicted based on the quality of performance, the role of outcome expectations
becomes stronger and they may individually predict the intention (Lent et al. 1994).
This fits well in a nascent entrepreneur situation during start-up when the individual
performance and a wide range of contextual factors, such as regulation (Stel et al. 2007),
experience of venture capital firms (Sorensen 2007), and social capital and networks
(Casson and Giusta 2007; Semrau and Werner 2012), affect the outcomes. Krueger et al.
(2000) assert the role of outcome expectations, including personal wealth, stress,
autonomy, and social status and benefits of having positive attitudes toward a behavior.
Furthermore, the reciprocal relationship between self-efficacy and outcome expectations
is up for debate (Shell et al. 1995). Therefore, hypotheses 4 and 5 are proposed:

Hypothesis 4: there is a positive relationship between entrepreneurs’ outcome

expectations and entrepreneurial intention.
Hypothesis 5: outcome expectations have a positive relationship with entrepre-
neurial self-efficacy.

The role of institutional framework

Personal agency is under influence of a broad network of social and cultural stimuli. In
addition to intrapersonal cognitive constructs such as self-efficacy, outcome expecta-
tions, and personal goals, SCCT asserts the influences of additional sets of variables
such as demographic attributes and features of the environment (Lent et al. 2000). In
general, societal institutions affect people’s choices, and particularly in the context of
entrepreneurship, they may affect perception of opportunities and the intensity of
entrepreneurial behavior (Campbell and Mitchell 2012).
Economic and sociological theories recognize a diverse set of macro-level country-
specific variables in order to justify the cross-national variance in the level of entre-
preneurial activity (Welter and Smallbone 2011). After inconsistent results and inade-
quate research that narrowly focused on the role of culture in cross-national variance
(European Network for SME Research 1996), Scott (1995) developed the notion of the
three pillars of institutional environment, and Kostova (1997) examined the effects of
three pillars on business behaviors. Busenitz et al. (2000) applied the Scott’s (1995)
institutional profile in the context of entrepreneurship and developed a measure for a
country’s institutional profile of entrepreneurship, which consisted of three dimensions:
(a) regulatory (national regulations and government policies), (b) cognitive (widely
shared social knowledge and skills pertaining to entrepreneurship and start-up), and (c)
460 A.D. Farashah

normative (the social value system admiring entrepreneurial activity, risk taking, and
creative thinking).
The institutional profile of a country, either formally or informally, sets norms and
standards of behavior and reinforces certain behaviors and ways of thinking through
reward and punishment systems to ensure compliance (Valdez and Richardson 2013).
By learning through social interaction and by following codified and enforced laws and
regulations, individuals in a society are affected by institutions. The entrepreneurship
institutional profile defines entrepreneur in the minds of society members and encour-
ages and constrains the scope of entrepreneurial behavior and attitudes, thus affects the
intention to involve in it. Entrepreneurs are forced to think and behave in a socially
constructed desirable or appropriate manner to avoid punishment for deviation.
Therefore, the range of available options, the degree of exerted individual agency
and consequently cognitive processes through which entrepreneurs perceive them-
selves, the opportunity, and the outcomes are influenced by entrepreneurship institu-
tional profile (Ahlstrom and Bruton 2002).
Although the similar factor structure of social cognitive theory across cultures
verifies generalizability of the theory, different milieus and institutional frameworks
can affect cognition and efficacy beliefs. Institutional influences precede or encourage
shaping of certain interests and cognitions at the individual level. Dennis (2011)
articulated that institutions could fuel personal interests and career choices by encour-
aging change in institutions, mainly by limiting the effect of institutions on competition.
Offering several types of institutional levers and tangible physical and emotional
incentives (e.g., financing, advisory services, and reducing the administrative burden
or constraints) and also targeting women, ethnic minorities, disabled/handicapped, and
immigrants would directly assist individuals to be empowered, perceive themselves
effective in launching a venture, and pursue an entrepreneurial trajectory (Dennis
2011). Although the way that institutional support is presented and the process of
formation and development of self-efficacy, and the purpose to which it is devised, vary
in different contexts, all types of institutional support can shape the self-efficacy beliefs
(Bandura 2002).
The physical and emotional incentives offered by the regulatory dimension remove
the adversative feeling regarding starting a business such as fear of failure. The
regulatory dimension might also diminish self-efficacy beliefs of nascent entrepreneurs.
Features such as a cumbersome, inefficient, and time-consuming bureaucracy, a low
level of subsidy, a high level of tax, and a substantial amount of time needed to acquire
permits might dissuade entrepreneurs from following an opportunity since they add to
the current level of complexity and risk embedded in the start-up process (Sambharya
and Musteen 2014) which consequently increase the fear of failure. The cognitive
dimension and entrepreneurship promotion programs introduce entrepreneurship as a
proper career choice and familiarize the general public with great entrepreneurs, their
attributes, and their tactics. Such programs also act as a persuasive force since they
demonstrate the possibility of success and pleasant social and economic outcomes of
entrepreneurship. Many policies associated with cognitive dimension directly aim for
the formation of networks of role models and promoting investment in new high-tech
ventures. Access to knowledge and information regarding start-up process and small
business management is a determinant of the level of entrepreneurial intention in a
country (Busenitz et al. 2000). The level of social support offered by the normative
A socio-cognitive model of entrepreneurial career 461

dimension of an institutional profile can encourage or discourage self-efficacy beliefs,

and this relationship is similar cross-nationally. De Clercq et al. (2010) reported that in
countries where entrepreneurship is not always seen as a positive phenomenon, the
level of intention to start a new business is lower. The influence of institutions on
productive entrepreneurship has been shown to be effective in a wide range of contexts
and cultures. For instance, Lewis et al. (2013) indicate that while there are huge
differences in economic and cultural factors between China and America, the entrepre-
neurs’ responses to policies are similar or slightly different. Following these arguments
regarding the effect of institutions on entrepreneurship, hypothesis 6 is proposed:

Hypothesis 6: in countries with a more structured institutional profile of entrepre-

neurship—(H6-1) higher regulatory, (H6-2) higher cognitive, and (H6-3) higher
normative dimensions—the level of self-efficacy sources is higher than in coun-
tries with a less-structured institutional profile.

In summary, Fig. 1 illustrates the research model and hypotheses. Entrepreneurial

self-efficacy beliefs and entrepreneurial career outcome expectations are assumed to be
related to entrepreneurial intention. Mastery experience, including experiencing busi-
ness ownership, entrepreneurial activity as part of the regular job or investing in a
venture, exposure to a role model, social persuasion through media, and emotional state
(not being afraid of failure) are sources of entrepreneurial self-efficacy. The country-
level institutional profile and the sources of self-efficacy are related. As Fig. 1 shows, it
is hypothesized that regulatory dimension, cognitive dimension (shared knowledge and
skills regarding entrepreneurship) and normative dimension (shared value system) of
institutional profile encourage self-efficacy through self-efficacy sources.

Methodology

Data and sample

The data are obtained from the Global Entrepreneurship Monitor (GEM) survey on
adult population in 54 countries. Led by Babson College and London Business School,
GEM annually collects data on populations of countries worldwide in order to assess
the level of entrepreneurial activity and attitude toward entrepreneurship. The GEM
database has kindled a lot of research in the entrepreneurship literature in areas such as
differences in the level entrepreneurial activity in the surveyed countries, determinants
of appropriate level of entrepreneurship, and policy making to enhance entrepreneur-
ship (e.g., Kobeissi 2010; Evald et al. 2011; Volchek et al. 2013). Two data-sets from
the GEM survey were used. The first one provides data at the individual level and
contains 183,049 people, representing entire populations of 54 countries. The sample
includes 96,396 (52.7%) female and 86,653 (47.3%) male. The average age of the
sample is 44. The first data-set provides the data source for self-efficacy sources,
entrepreneurial self-efficacy, entrepreneurial career outcome expectations, and entre-
preneurial intention. The second data set provides data at the national level for 42
countries and is used to calculate the country-level institutional profile. The national
survey is based on an average of 40 expert surveys in each country.
462 A.D. Farashah

Measures

Table 1 summarizes the measures of the constructs in the research model. Guerrero
et al. (2008) and Tominc and Rebernik (2007) used the same measure for self-efficacy.
Veciana et al. (2005) used the same measure for entrepreneurial intention.
The summated scale of institutional profile is developed following Spector’s (1992)
guideline for scale construction. First, items were selected from the GEM study that
were believed to fit each of the three dimensions of the institutional environment,
according to Busenitz et al.’s (2000) definition of these dimensions. GEM has mea-
sured the items by asking experts to state their perception regarding the institutions in
their country on a 5-point Likert-type scale. In order to validate the scale, exploratory
factor analysis (EFA) was conducted. A factor analysis of the 17 items resulted in three
factors explaining 71 % of the common variance of the items. Results of EFA, shown in
Table 2, justify the institutional profile measure regarding its three hypothesized
dimensions, selection of the items, and the associations of each item to the assigned
dimension. Manolova et al. (2008) has adopted a similar approach to measure institu-
tional profile.

Analyses

Binary logistic regression is used to examine the relationships between self-efficacy

sources and self-efficacy, the relationships between self-efficacy and outcome expec-
tation, the relationships between self-efficacy and outcome expectations and entrepre-
neurial intention, and the relationships between institutional profile and self-efficacy
sources. To analyze the relationship between institutional profile and sources of self-
efficacy, the average of properties of individuals from each country was attributed to
their country (Heck et al. 2010).
Since certain countries participating in GEM survey have not collected the data for
some of the survey items, the response rate to the questions varies significantly. For
instance, the response rate for the outcome expectation item is 6.6 %, while the
response rate to the self-efficacy item is 75 %. Since the outcome expectation response
rate is highly lower than self-efficacy response rate, the relationship of self-efficacy and
conducting two separate binary logistic regressions instead of one regression model
with two independent variables assessed outcome expectations with the entrepreneurial
intention.
Blanchflower et al. (2001) indicated that an increase in age decreases the probability
of becoming self-employed (Blanchflower et al. 2001), while Wilson et al. (2007)
reported a significant disparity between men and women in entrepreneurial self-
efficacy and behaviors. Therefore, two control variables of age and gender were further
introduced.

Results

Globally, 56.2 % of people believe that they possess the required knowledge and skills to
start a business, but only 16.6 % have the intention to start a business. The descriptive
statistics and correlation among key variables are presented in Tables 3 and 4. Mean of
A socio-cognitive model of entrepreneurial career
Table 1 Measures of the constructs
Construct Dimensions/ explanation
Institutional Profile for Regulatory
entrepreneurshipa
Cognitive
Normative
Self-efficacy Self-belief and judgment
about personal capabilities
Entrepreneurial intention Interest to be involved in
entrepreneurial activities
463
Questions/Items
There are sufficient government subsidies
available for new and growing firms
Government policies (e.g., public procurement)
consistently favor new firms
The support for new and growing firms is a
high priority for policy at the local
government level
Taxes and other government regulations are
applied to new and growing firms in a
predictable and consistent way
Coping with government bureaucracy,
regulations, and licensing requirements is
not unduly difficult for new and growing
firms
There is an adequate number of government
programs for new and growing businesses
Government programs aimed at supporting
new and growing firms are effective
Many people know how to start and manage a
small business
Many people have experience in starting a
new business
Many people can react quickly to good
opportunities for a new business
Many people have the ability to organize the
resources required for a new business
The creation of new ventures is considered to
be an appropriate way to become rich
The national culture is highly supportive of
individual success achieved through own
personal efforts
The national culture encourages creativity and
innovativeness
The national culture encourages entrepreneurial
risk taking.
Most people view becoming an entrepreneur
as a desirable career choice
Successful entrepreneurs have a high level of
status and respect
Most people think of entrepreneurs as competent,
resourceful individuals
Have you the knowledge, skill, and
experience required to start a new
business?
Are you expecting to start a new business,
including any type of self-employment,
alone, or with others, within the next
3 years?
464 A.D. Farashah

Table 1 (continued)

Construct Dimensions/ explanation Questions/Items

Entrepreneurship outcome
expectations
Sources of SE—personal
mastery
Sources of SE—vicarious
learning
Sources of SE—social
persuasion
Sources of SE—emotional
state
Imagined outcomes and
consequences
Business ownership
experience
Entrepreneurship as part
of the regular job
Investment in a new
venture
Past entrepreneurship
experience
Exposure to role models
Entrepreneurship promotion
in media
Fear of failure
Do you feel that greater independence,
increase or maintains personal income,
income or higher status, and respect, is an
important motive for pursuing an
entrepreneurial career?
You are, alone or with others, currently the
owner of a company you help manage,
self-employed, or selling any goods or
services to others
You are, alone or with others, currently trying
to start a new business or a new venture for
your employer as part of your normal work
You have, in the past 3 years, personally
provided funds for a new business started
by someone else, excluding any purchases
of stocks or mutual funds
You have, in the past 12 months, sold, shut
down, discontinued, or quit a business you
owned and managed, any form of self-
employment, or selling goods or services to
anyone
You personally know someone who started a
business in the past 2 years
You often see stories in the public media about
successful new businesses and
entrepreneurs
Fear of failure would prevent you from
starting a business

Respondents answered items related to regulatory, cognitive, and normative dimensions of institutional profile
in a 5-point Likert-type scale. Respondents answered the questions regarding the rest of the constructs with a
yes or no answer

both entrepreneurial intention (.19>.13, p<.001) and self-efficacy belief (.63>.48,

p<.001) are significantly higher among men than women.
The relationships between self-efficacy and outcome expectations as dependent
variables and the dependent variable of entrepreneurial intention were assessed by
conducting two binary logistic regression models. Wald criteria demonstrate that
entrepreneurial self-efficacy significantly and positively correlates with entrepreneurial
intention (p=.02, Exp(B)=4.00, B=1.38, hit ratio=78.5%). Similarly, outcome expec-
tations and entrepreneurial intention have a significant positive relationship (p=.05,
Exp(B)=1.25, B=.22, hit ratio=75.9%). These results support H1 and H4.
Hypotheses H2-1 to H2-4 were tested using a binary logistic regression with sources
of self-efficacy as independent variables and self-efficacy beliefs as the dependent
variable. Results are shown in Table 5. A test of the model with seven independent
variables (items related to sources of self-efficacy and two control variables of gender
and age) indicates that the model performs better than the null model (χ2 =9783, df=9,
p<.000). Nagelkerke’s R2 is equal to .184 and indicates a moderate relationship
A socio-cognitive model of entrepreneurial career 465

Table 2 EFA results, the measure of institutional profile

Scale items Rotated factor loading

Factor 1: Factor 2: Factor 3:

regulatory cognitive normative

Sufficient government subsidies .77

Favorable government policies .62
Prioritized support for new businesses .88
Predictable and consistent tax regulations .68
Not highly bureaucratic procedures .69
Adequacy of governmental supportive programs .90
Effective governmental support .86
Knowledge to start and manage a small business .79
Experience in starting a new business .82
Quick reaction to opportunities .87
Ability to organize the required resources .88
Appropriate way to become rich .81
Encouraging individual success .74
Encouraging creativity and innovativeness .55
Encouraging entrepreneurial risk taking .78
Desirable career choice .76
High level of status and respect .85
Entrepreneurs as competent/resourceful .80

Extraction method: principal axis factoring; rotation method: Varimax with Kaiser Normalization; VAF for
three factor solution 71 %. Loading less than .40 are not shown in the Table

between the independent variables and self-efficacy beliefs. Wald criteria demonstrate
that all sources of self-efficacy are significantly related to self-efficacy (p<.000). The
total hit ratio of model of effects of sources on self-efficacy is 70.4 %. The result
supports H2.
Regarding H3, odd ratios and beta values in Table 5 indicate that experiencing
entrepreneurship in the past and owning a business have the strongest relationship with
self-efficacy beliefs as predicted. It should be noted that analyses is limited to the have
provided the data. Previous entrepreneurial experience and owning a business increase
the formation of self-efficacy beliefs by factors of 1.9 and 1.4, respectively, but the
effects of exposure to a role model and fear of failure are stronger than experiencing
entrepreneurship as part of a regular job and investing in a new venture. Exposure to a
role model increases the odds of self-efficacy belief by a factor of 1.1, while fear of
failure decreases the odds by half. Therefore, H3 is partially supported.
Hypothesis 5 was tested using binary logistic regression. The independent variable
was self-efficacy, and dependent variable was outcome expectations. The results show
that self-efficacy belief is not significantly related to outcome expectations (p=.30).
Therefore, results do not support H5.
To measure the effects of institutional profile on sources of self-efficacy, the second
data set including country-level data was analyzed using multivariate regression
 466

Table 3 Mean, standard deviation, and Kendall’s correlation coefficient (tau) of the individual-level variables

Variables Mean Standard 1 2 3 4 5 6 7 8 9 10

deviation

1—Business ownership .14 .35 1 .11* .12* .09* .15* .05* −.10* .59* .26* .14*
2—E.ship as part of the job .03 .17 1 .10* .08* .11* .05* −.02* .18* .09* .20*
3—Investment in a venture .03 .18 1 .16* .16* .03* −.03* .13* .11* .16*
4—Past e.ship experience .04 .19 1 .10* .04* −.02* .09* .13* .16*
5—Exposure to a role model .41 .49 1 .11* −.04* .17* .243* .23*
6—Media persuasion .54 .50 1 −.05* .04* .09* .12*
7—Fear of failure .39 .49 1 −.10* −.13* −.09*
8—Outcome expectations .96 .20 1 .24* .19*
9—Self-efficacy .56 .50 1 .25*
10—Intention .17 .37 1

*Correlation is significant at the .01 level

A.D. Farashah
Table 4 Mean, standard deviation, and Pearson’s correlation coefficient (r) of the country-level variables

Variables Mean Standard 1 2 3 4 5 6 7 8 9 10

deviation

1—Business ownership 14.9 8.06 1 .03 .52** .68** .41** .31* −.23 −.09 .04 .14
2—E.ship as part of the job 3.8 3.38 1 .194 .08 .36** .27* .12 −.03 −.03 .14
3—Investment in a venture 4.0 3.19 1 .77** .50** .19 −.26 .02 .17 .32*
A socio-cognitive model of entrepreneurial career

4—Past e.ship experience 2.9 3.04 1 .44** .29* −.20 −.11 .02 .24
5—Exposure to a role model 42.2 10,6 1 .34* .02 .08 .18 .20
6—Media persuasion 58.2 15.0 1 −.12 .08 .18 .36*
7—Fear of failure 36.6 9.4 1 −.28 −.08 −.20
8—Regulatory profile 2.6 .4 (.92) .214 .20
9—Cognitive profile 2.5 .4 (.93) .61**
10—Normative profile 3.2 .4 (.92)

Variables 1 to 7 represent the perception of people between age of 18 to 60. Variables 8 to 10 show the perception of the people of the country regarding the extensiveness of
institutional profile for entrepreneurship in the range of 1 to 5. Values in parentheses show the Cronbach’s alpha (test of the reliability of the measure)
*Correlation is significant at the .05 level
**Correlation is significant at the .01 level
467
468 A.D. Farashah

Table 5 Model summary of effects of self-efficacy sources on entrepreneurial self-efficacy

Sources of self-efficacy −2 Log likelihood Cox and Snell R2 Nagelkerke’s R2

77567 .133 .184

B S.E. Wald Significance Exp(B)

Ownership experience 1.060 .022 2379.14 .000 2.885

E.ship as part of the job .290 .042 48.84 .000 1.337
Investment in a venture .357 .040 80.61 .000 1.429
Past e.ship experience .890 .040 502.78 .000 2.435
Role model .750 .018 1659.61 .000 2.116
Media persuasion .235 .018 178.62 .000 1.264
Fear of failure −.671 .018 1448.17 .000 .511
Age −.004 .001 32.56 .000 .996
Being female −.361 .018 424.18 .000 .697
Constant .499 .034 215.22 .000 1.647

Dependent variable: entrepreneurial self-efficacy

analysis. The correlation coefficients among the key country-level variables are pre-
sented in Table 4. Seven models were run for each source of self-efficacy, which acted
as the dependent variables with regulatory, normative, and cognitive dimensions of
institutional profile as the independent variables. A summary of the results is presented
in Table 6. The values of Exp(B) support the H6-2 and H6-3 but do not support H6-1.
Therefore, H6 is partially supported.

Discussion

Cognitive factors

In line with many researchers (e.g., Kristiansen and Indarti 2004; Zhao et al. 2005),
self-efficacy appears to be a particularly important antecedent of entrepreneurial inten-
tion. The exponential logistic coefficient of the first regression model shows that one’s
self-efficacy beliefs increase the odds of having entrepreneurial intention by a factor of
three. There is a similar relationship between outcome expectations and entrepreneurial
intention. Individuals with clear expectations of an entrepreneurial career have in-
creased odds of having an entrepreneurial intention by 25 %. While Bandura (2007)
suggested that self-efficacy causally influences expected outcomes, some authors have
argued that expected outcomes of action can influence self-efficacy (Williams 2010).
However, our study did not find a significant relationship between these two constructs.
Regarding sources of self-efficacy, the figures show that social network and personal
mastery are more related to entrepreneurial self-efficacy than other sources. Empirical
data also show the important role of emotion. Fear of failure lead to a 50 % decrease in
the odds of having entrepreneurial self-efficacy. The growing literature on interaction
among cognitive and affective variables support this finding and suggest that negative
Table 6 Model summary of effects of three pillars of institutional profile on self-efficacy sources

Sources of self-efficacy Regulatory dimension Cognitive dimensions Normative dimension

B Wald Significance Exp(B) B Wald Significance Exp(B) B Wald Significance Exp(B)

A socio-cognitive model of entrepreneurial career

Ownership experience −.40 376.2 .000 .67 .10 10.5 .001 1.1 .27 172.9 .000 1.31
E.ship as part of the job −.20 18.3 .000 .821 −.16 7.2 .007 .852 .77 337.3 .000 2.15
Investment in a venture −.04 .9 .340 .96 .29 34. 8 .000 1.34 .52 194.7 .000 1.69
Past e.ship experience −.62 235.3 .000 .54 −.07 2.1 .150 .93 .82 499.3 .000 2.26
Role model −.22 146.1 .000 .8 .41 281.7 .000 1.51 .23 185.2 .000 1.26
Media persuasion −.31 264.9 .000 .73 −.01 .265 .600 .99 .92 2510 .000 2.5
Fear of failure −.06 9.09 .003 .94 .40 244.3 .000 1.49 −.73 1588 .000 .48

Dependent variable: sources of self-efficacy

469
470 A.D. Farashah

emotions may lead to negative interpretations and may act as a shortcut to make a
biased decision (Blanchette and Richards 2010). Fear of failure acts as a significant
determinant of entrepreneurial career.

Demographic factors

Both age and gender are related to self-efficacy beliefs. Regarding age, a 10-year
increase in age would lead to only 10 % decrease in the odds of having entrepreneurial
self-efficacy beliefs. One may justify this small effect by the notion of professional age
which is considered to be superior over chronological age (Simonton 1984) and the fact
that some cognitive capacities will not change with age (Zelinski and Lewis 2003).
However, adding abilities into the model would probably increase the effect of aging on
self-efficacy. Global Entrepreneurship Monitor’s (GEM) report on women shows that
the rate of entrepreneurship among women is lower than the men’s rate across 40
countries (Allen et al. 2007). In line with this report, our findings suggest that being
female decreases the odds of having entrepreneurial self-efficacy beliefs by 30 %.

Institutional factors

The scores of three dimensions of institutional profile were summated to provide a

single score for institutional profile. There is a negative and significant relationship
between country institutional profile and entrepreneurial self-efficacy beliefs (Beta=
−.174, Exp(B)=.84, p<001). The inconsistency in this finding (negative relationship
between institutional profile and self-efficacy) with the common wisdom may imply
that entrepreneurship institutional profile should aim directly at supporting sources of
self-efficacy. Forming networks of mentors comprising experienced and passionate
entrepreneurs, providing opportunities to practice entrepreneurship in a controlled or
simulated environment, and elevating the entrepreneurship status in the media are
sample policies toward this aim. Table 6 reveals some interesting relationships between
each dimension of the profile and sources of self-efficacy. While cognitive and
normative dimensions significantly increase the odds of investment in a new venture,
the regulatory dimension does not associate with investment in a new venture. This
finding is similar to the results reported by Valdez and Richardson (2013) and could be
recommended to enhance a regulatory dimension in this regard and to formulate
policies that encourage the general population to experience investing in entrepreneur-
ial ventures. Surprisingly, regulatory dimension associates significantly with other
sources of self-efficacy in a negative way (the exponential logistic coefficients are less
than one in Table 6). While this negative association may vary from country to country,
one may infer that in general, the formal governmental policies and programs for
encouraging entrepreneurship are ineffective in providing the conditions necessary for
the development of entrepreneurial self-efficacy beliefs. Curran (2000) similarly raised
a doubt about the need for and cost effectiveness of national policies. Cognitive
dimension referring to widely available knowledge and skills pertaining to entrepre-
neurship is associated significantly with a decrease in fear of failure and an increase in
exposure to an appropriate role model and investment in ventures. Therefore, using the
media to demonstrate that the knowledge and skills required in entrepreneurship is
publicly accessible appears to be useful. This would result in a better persuasion and
A socio-cognitive model of entrepreneurial career 471

consequently would make formation of self-efficacy belief more likely. The beta values
and odds ratios associated with normative dimension are greater than the beta values
and odds ratios associated with the other two dimensions. This shows that the norma-
tive dimension is the most influential dimension of institutional profiles in affecting
self-efficacy resources. It seems that the social value system is more effective than
regulations and policies in influencing self-efficacy beliefs. One possible public policy
implication could be that in addition to current widespread policies such as business
formation assistance, providing access to finance, protection of intellectual property,
and tax policies (Acs and Szerb 2007), a new type of initiatives for highlighting the
value of innovation and encouraging entrepreneurial risk-taking spirit through media
and educational systems would be valuable. Regarding the weak role of formal
regulations, it is helpful to remind that a) they are typically crude instruments and b)
it is questionable how many potential entrepreneurs actually understand the formal
institutions or are even aware of them.

Limitations and directions of future research

It is important to mention that this study does not claim that the cognitive processes tell
the entire story of formation of entrepreneurial intention. Also, the research model has
not included all the cognitive factors. For instance, abilities, interests, personality traits,
the existence of opportunities, and access to the resources are some of the factors which
are not captured by this study. The items related to sources of self-efficacy are able to
describe 18.4 % of variance in self-efficacy beliefs. Considering personality traits,
abilities, and other sources of self-efficacy will complement the current study.
Further research may also use a multidimensional measure of entrepreneurial self-
efficacy (e.g., McGee et al. 2009) to understand how different dimensions of self-
efficacy relate to self-efficacy sources and institutional profile.
The data from GEM provides us with a unique data set that contains comparable
data on entrepreneurial activities worldwide. However, it is useful to acknowledge
some of the limitations of the data. First, the survey relies on self-reported measures.
Therefore, the measures are susceptible to social desirability response effect (Ganster
et al. 1983). However, the perception and judgment of individuals are the main
determinant of their behavior (Koellinger 2008). It therefore seems correct to use
self-reported measure in this study. Second, some of the measures such as entrepre-
neurial intention and self-efficacy are dichotomous, yet they are more naturally thought
of as being on a spectrum. Third, the scarcity of outcome expectations responses
(only 6.6 % of respondents had answered the outcome expectations item) can be a
technical explanation for the lack of ability to find a significant relationship
between self-efficacy beliefs and outcome expectations (i.e., H5). Also, the low
response rate may create nonresponse bias, but a substantial number of 15,000
respondents to the outcome expectation items and GEM probabilistic sampling
procedure diminish this bias. The paper makes no rigid claim of causality since it
uses regression as the method of data analysis. The sole foundation upon which
our causal claims rest is Social Cognitive Career Theory. Utilizing structural
equation modeling in order to assess the overall power of the model and multilevel
analysis in order to take into account the dependency of the observations by clustering
people within countries can lead to further understanding.
472 A.D. Farashah

Regarding the areas in which future research should dwell more and more studies
are needed to show how gender as a socially constructed factor, not as a biological
variable, affects underlying cognitive processes that lead to a lower entrepreneurial
intention among women. Another fruitful area would be study of the effects of
emotions. Studies in general assume entrepreneurs as pure rational decision makers,
and emotions have rarely been included in the study of entrepreneurial behavior
(Delgado-García et al. 2012). The current study took a small step toward including
affective variables and its relationship with cognitive processes. The significant rela-
tionship between fear of failure and self-efficacy beliefs suggests a systematic investi-
gation on the effect of emotion in different stages of entrepreneurship. Vaillant and
Lafuente’s (2007) study showed the territorial specificity of institutional framework
effects of social stigma caused by entrepreneurial failure and the presence of entrepre-
neurial role models. Future research may consider national/regional differences and
propose better policies by doing cross-cultural comparison. Furthermore, cross-cultural
research is necessary to provide further support for the model and include other
variables in SCCT, such as personality and interests, in order to depict a clearer picture
of underlying cognitive and affective mechanisms of formation of entrepreneurial
intention.
The findings should be considered as a preliminary result of research on a complex
research subject.
In summary, three areas of future research are needed to advance our understanding
of the process of development of entrepreneurship intention: (a) including new
individual- and country-level factors in the research (e.g., interests, personality traits,
and educational system), (b) studying the interaction of socially constructed institutions
with the individual agency at the cognitive level (e.g., the relationship of gender roles
and self-efficacy), and (c) utilizing qualitative research method to explain the process
narratively in a certain socio-economic context.

Conclusion

From a socio-cognitive perspective, this study takes a step toward understanding some
aspects of entrepreneurial career development and concludes that (a) individual-level
cognitive processes including self-efficacy and outcome expectations are related to
entrepreneurial intention, (b) there are four types of sources of self-efficacy and their
relative importance varies, and (c) the country-level institutional profile of entrepre-
neurship is associated with the entrepreneurial self-efficacy beliefs. The socio-cognitive
model of entrepreneurial career development may contribute to the literature by
providing a more comprehensive understanding of entrepreneurial career development.
People develop intention to pursue entrepreneurial activities when it is consistent with
their interests as well as when they have self-efficacy beliefs and clear outcome
expectations. The role of institutional factors is mediated through sources of self-
efficacy. The regulatory, cognitive, and normative dimensions of a country’s institu-
tions facilitate access to the sources of self-efficacy such as exposure to role models,
experiencing related innovative and risky behaviors (e.g., investing in a new venture)
and positive affection toward entrepreneurship. Therefore, a country’s institution can
affect the level of entrepreneurial activity.
A socio-cognitive model of entrepreneurial career 473

This study supports the notion that country-level institutional factors are associated
with the level of entrepreneurial activities. While the result may vary from country to
country, among the three dimensions of institutional profile, the normative dimension is
the most influential in promoting sources of self-efficacy.
Given the robust relationship between entrepreneurship and economic development
(Henderson and Weiler 2010), developing a policy mix and a set of persuasive and
educational initiatives to promote entrepreneurship has become increasingly popular
(Campbell and Mitchell 2012; Campbell 2012). However, the weak relationship
between the three pillars of institutional profile and sources of self-efficacy reveals
that, from a cognitive perspective, the current regulatory efforts and to a lesser degree
normative institutions are not completely effective in encouraging entrepreneurial
intention and entrepreneurial self-efficacy beliefs. While the positive economic effects
of a country’s institutional profile is not deniable, this study proposes a new perspective
on the establishment of cognitive process institutional profile and policies to provide
better access to sources of self-efficacy and to influence individual cognitive processes
alongside regulating the structure of the market and competition.

Acknowledgments The author would like to thank Professor Etemad, the Editor-in-Chief of JIEN, and three
anonymous reviewers for their insightful comments.

Conflict of interest The author declares that they have no conflict of interest.

Funding This study was not funded by any organization.

Research involving human participants/animals This article does not contain any studies with human
participants or animals performed by the author.

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