Measuring University Students’ Perceptions About the Role of Self-efficacy on Entrepreneurial Intentions in Cape Town

Abstract

Entrepreneurial self-efficacy is best perceived as a multidimensional variable built from individuals’ beliefs about their abilities and capabilities for tackling the challenges and nurture entrepreneurial intentions towards the establishment of a new venture. Numerous studies are unanimous about the insufficient level of entrepreneurship in South Africa, as well as its below average total entrepreneurial activity of 7.8per cent compared to all efficiency-driven economies (developed countries) which have 11.4 per cent of activity. This study conducted in Cape Town—South Africa—aims at identifying the factors of self-efficacy and the role self-efficacy plays in rising entrepreneurial intentions among university students. Data were collected with the use of a questionnaire survey, where entrepreneurship students were the respondents. SPSS 22 was used to conduct bivariate and multivariate tests of statistical significance. The reliability of the data collection instrument was tested with the use of Cronbach’s Alpha and the variable of self-efficacy scored a reliability level of 0.877. The validity was ensured by the assessment of the instrument by two statisticians and two academics who are experts in their fields. The findings reveal the existence of a positive relationship between entrepreneurship university students’ self-efficacy and their entrepreneurial intentions. Recommendations to enhance self-efficacy among students and other aspiring business people have been formulated.

Keywords

Self-efficacy entrepreneurial intentions entrepreneurship university students Cape Town entrepreneurial behaviour

Introduction

In this article, the role of self-efficacy on a business start-up process is discussed while the perception of university students of the role of self-efficacy on entrepreneurial intentions is measured. Drnovsek, Wincent, and Cardon (2010) posit that there are three dimensions of self-efficacy, namely self-efficacy domain (business start-up or growth), goals of self-efficacy (task or outcome) and valence (positive or negative). The current study finds these dimensions fundamentally important in research on self-efficacy. We focus on self-efficacy in starting and growing the business, which draws us into entrepreneurial self-efficacy.

In the literature, different approaches have been used to define entrepreneurial self-efficacy. First, self-efficacy is defined as an entrepreneur’s task-specific self-confidence (Baron & Markam, 1999; Baum, Locke, & Smith, 2001; Boyd & Vozikis, 1994). Boyd and Vozikis (1994) expanded this definition, referring to self-efficacy as a task-specific variable comprising an auto-evaluation (personality) and external (environment) conditions and possibilities. The studies by Segal, Borgia, and Schoenfeld (2002) and Chen, Greene, and Crick (1998) slightly differed with the above definitions, when they define self-efficacy as ‘the ability to master the necessary cognitive, memory processing, and behavioral facilities to deal effectively with the environment’.

Departing from the above paragraph, it seems as there is no single agreed-upon definition of self-efficacy, and this may negatively affect our work in an attempt to broaden our understanding of entrepreneurial venture because scholars tend to commit errors of inclusion or exclusion.

Various researchers have also highlighted the role of self-efficacy. Hmieleski and Corbett (2008) found the self-efficacy variable as playing a moderating role on new venture performance and entrepreneur’s satisfaction, while Byrant (2007) focussed on the role of self-efficacy in the use of decision-making heuristics by entrepreneurs. As posited by Shane, Locke, and Collins (2003, p. 267), ‘self-efficacy was the single best predictor in the entire arrays of variables utilized to study entrepreneurial outcomes for a group of founders in the architectural woodworking industry’.

In a similar vein, Markman, Balkin, and Baron (2002) described the role of self-efficacy as an indispensable factor of firm creation and growth as well as for personal success. Krueger, Reilly, and Carsrud (2000) describe self-efficacy as the best forecaster of behaviours to start with.

The rationale of conducting this research came from the observation that self-efficacy of an entrepreneur is gaining momentum as a valuable topic for the study and understanding of entrepreneurial success. Furthermore, a substantial amount of evidence supports self-efficacy’s influence on entrepreneurial success (Baum et al., 2001; Boyd & Vozikis, 1994; Chen et al., 1998; Krueger, 2003; Markam, Balkin, & Baron, 2002; Segal et al., 2002).

Figure 1.

Source: Authors’ compilation from the literature review read.

Given these two reasons, it is motivating to conduct such a research in South African environment, where studies about the advent of entrepreneurial intentions are still sketchy. In his study, Fatoki (2010) posits that most South African graduates prefer to work for private organizations or public establishments rather than thinking of entrepreneurial behaviour; and this is consistent with a study, previously done by Kazela (2009), when he pointed out that the main intention among members of the disadvantaged communities in South Africa is to earn an academic qualification in order to secure employment. This perception is a wrong mindset, because as stated by Herrington, Kew, and Kew (2009) in the Global Entrepreneurship Monitor, public and private sectors in South Africa are incapable of absorbing the growing number of job seekers and suggest that attention be focussed on entrepreneurship and new firm creation due to its potential of contributing to the economic growth and job creation.

In addition to the wrong mindset, there is a number of obstacles that have been identified as constituting impediment to the entrepreneurial behaviour among graduates in South Africa: lack of capital (Casson, 2003; Elsenhardt & Martin, 2004; Maas & Herrington, 2006), lack of skills, lack of support, fear of taking risks (Kazela, 2009; Robinson, 2008), lower economic growth and crime (Arzeni, 2010).

The hypothesis that the current study strives to prove is ‘students perceive self-efficacy as a propeller of entrepreneurial intentions’. This study will contribute to the ongoing debate on entrepreneurial intentions, putting self-efficacy at the centre of the discussion so that its role in implanting entrepreneurial intentions can be clarified.

This article is arranged in the following manner: first, the existing literature about self-efficacy and business start-up and growth, self-efficacy and tasks and outcomes, and self-efficacy control beliefs (positive and negative) is reviewed. It is followed by the review of literature about entrepreneurial intentions. Data presentation will follow, then there will be discussions of the findings before conclusion and recommendations.

Entrepreneurial Self-efficacy

Domains of Entrepreneurial Self-efficacy: Business Start-up and Growth

In the fields of management and psychology, studies have concluded that self-efficacy is domain specific which then decreases incremental value (Phillips & Gully, 1997). This implies that one entrepreneurial self-efficacy construct should not be used in all entrepreneurship studies. Practically put, it is expected that entrepreneurial self-efficacy beliefs about one’s capability to successfully handle business start-up activities will differ from entrepreneurial self-efficacy beliefs about one’s capability to handle business growth operations (Drnovsek, Wincent, & Cardon, 2010).

Ucbasaran, Howorth, and Westhead (2000) concurred with above statements by advancing that prior research have shown that entrepreneurs who are successful in the starting up of the business are not necessarily the ones who are successful at the growth of the business. If we then separate self-efficacy constructs of those two domains (business start-up and growth), the results will be the content of self-efficacy beliefs that is different in nature and scope.

Shook, Priem, and Mcgee (2003) identified four steps in the start-up of a business, during which, the dimension of self-efficacy plays specific roles at each phase.

Phase 1: Entrepreneurial Intention Formation

This is defined as a state of mind that directs one’s mind and action towards a specific goal. At this phase, self-efficacy has an effect on entrepreneurial intent as it contributes in controlling the attitudes and subjective norms of the entrepreneurs (Kolvereid, 1996). Similarly, Bird (1992) and Boyd and Vozikis (1994) posited that individual self-efficacy, which has been referred to as a person’s belief in his or her capacity to perform a task, impacts the development of both entrepreneurial intentions and actions or behaviours. In support, Wilson, Kickul, and Marlino (2007) reported that given the complex tasks involved in locating an opportunity, assembling the resource, setting up a business and bringing it to a success, the self-efficacy or belief in one’s ability to succeed would be especially important.

Zhao, Seibert, and Hills (2005) highlight the role of self-efficacy on students at this stage; that it plays a mediating role in the development of their intentions to become entrepreneurs.

Generally, self-efficacy is regarded as a major determinant of venture success and career-oriented behaviours; hence, Bandura, Barbaranelli, Caprara, and Pastorelli (2001) refer to self-efficacy as one of the influencers on careers aspirations of children and posit that academic self-efficacy had the strongest direct effect. Similarly, Markham, Balkin, and Baron (2002) reported that self-efficacy reliably predicts the scope of career intentions, occupational interests, perseverance in those domains and personal effectiveness.

Phase 2: Opportunity Identification

In Baron’s (2004) view, this is a phase where interrelated tasks are accomplished: environment scanning, information gathering, categorising and reflecting. This phase also involves the activation of an entrepreneur’s socio-cognitive skills and engagement in tasks. During this phase, self-efficacy beliefs about entrepreneurial tasks play a key role through consistent focus on those tasks (Drnovsek, Wincent, & Cardon, 2010).

However, not all agree on the role of self-efficacy on opportunity identification. Prior to the views above, Ardichvili, Cardozo, and Ray (2003) had argued that opportunity alertness is not directly dependent on self-efficacy, but personality traits, social networks and prior know-how, aspects which lead to a successful opportunity identification triad: recognition, development and evaluation.

Phase 3: Decision to Exploit

This phase refers to the tasks and investments mobilised to gain returns from the newly established or manufactured product (Choi & Shepherd, 2004). Self-efficacy will influence in this process, as it will convince the entrepreneur of his/her abilities to attain the envisaged results, especially financial returns from the investment.

According to Wilson et al. (2007), self-efficacy may have an impact even after a career decision to pursue entrepreneurship has been taken. Issues such as persistence are also considered as being influenced by self-efficacy. Bandura et al. (2001) underscored this by arguing that making a decision is not the same as implementing it, and self-efficacy can have greater effect throughout the implementation stages.

Phase 4: Opportunity Exploitation

In the view of Shook et al. (2003), this phase consists of activities such as planning, networking, selling and locating resources. This implies that if entrepreneurs possess a higher level of self-efficacy beliefs for attaining success on tasks, they will persevere in order to achieve higher levels of success as far as the opportunity exploitation is concerned.

Despite this assertion, Chowdhury and Endres (2005) and Cox, Mueller, and Moss (2002), posit that self-efficacy is rarely used as an outcome measure. They argue that though a small number of studies have examined the role of self-efficacy, their results were not conclusive in their findings, thereby making it difficult to define its effect on opportunity exploitation.

Entrepreneurial Self-Efficacy Goal Beliefs: Tasks and Outcomes

The beliefs about the abilities to reach the expected results, paired with the beliefs about one’s capabilities to successfully complete the tasks, are part of personal self-efficacy and are integral parts of social cognitive theory (Drnovsek, Wincent, & Cardon, 2010). However, it is important to note that the success of a business is not only a result of completing tasks as they were planned, but rather on reaching the desired outcomes that result from those tasks. While it is necessary and beneficial for an entrepreneur to have both types of goals, entrepreneurs tend to focus on opportunity search activities during the start-up process and neglect to focus on reaching the specific goal during this phase.

Entrepreneurial Self-efficacy Control Beliefs: Positive and Negative

In an attempt to establish a business venture, the future entrepreneur goes through a difficult stage, a mix of positive and negative thoughts. Indeed, the chances of success or failure are high. However, Eisenberg, Fabes, Guthrie, and Reiser (2000) report that ‘two mechanisms operating under positive and negative cognitive states, may be significant’ in the self-regulation thinking of an entrepreneur:

A self-regulation that is operated by a negative control efficacy belief involves an ‘individual’s efficacious control over negative thinking and secures re-activation after failure experiences’, while ‘the prevention regulation exerts efficacious control over to positive thinking and keeps an individual in the creative mode, thus preventing escalation of overconfidence biases’ (Martin & Clore, 2001).

From the above, it is therefore argued that entrepreneurial self-efficacy beliefs about the capability to control positive thoughts is different from entrepreneurial self-efficacy beliefs about capability to successfully control negative thoughts.

Despite the growing number of studies supporting the view that self-efficacy leads to entrepreneurial intentions, Bandura et al. (2001) expressed their reservations and proposed the undertaking of a longitudinal study to confirm the arguments. For them, these cross-sectional studies provide us with inconclusive insights concerning the connection between entrepreneurial self-efficacy and behaviour.

Entrepreneurial Intentions

One of the reasons why researches about entrepreneurial intentions continue to receive attention among entrepreneurship researchers and academics is because ‘venture creation is a process that begins with the individual’s personal decision to implement it’ (Liñán, 2008, p. 2). Bird (1988) posits that intentionality is a key element that can determine the reasons for individual’s careers, and it is closely linked to attitudes, more precisely with perceived desirability and feasibility (Gatewood, Shaver, & Gatner, 1995). Intentionality is a behavioural intention resulting from attitudes to become an immediate determinant of behaviour (Pihie, 2009). Intentions of behaviour can be strong indicators of that behaviour (Fishbein & Ajzen, 1975), and several variables, including education, are greatly correlated with the intention to start a business (Packham, Jones, Miller, Pickernell, & Thomas, 2010; Mushtaq, Niazi, Hunjra, & Rehman, 2011).

In the view of Malle and Nelson (2003), intention is an alignment of mental conditions (intention, belief and desire) which shape intentionality towards a behaviour. Intentionality is a conscious state of mind that leads attention (and therefore experience and action) towards a specific object (goal) or pathway to achieve it (Bird, 1988), and those people who establish ventures not only have courage to begin, but also acquire a coherent behaviour to attain their objectives. Hence, the argument that intentionality is built on cognitive psychology that endeavours to clarify or forecast the human behaviour.

Franco, Haase, and Lautenschläger (2010) reported that several previously conducted studies on intentionality concluded that intentionality is determined by many, sometimes different factors (Harris & Gibson, 2008; Hisrich, Peters, & Shepherd, 2004; Jones, Packham, Jones, & Miller, 2008; Kuratho & Hodgetts, 2006; Liñán, 2008; Nabi & Holden, 2008). Entrepreneurial intention is strongly influenced by self-efficacy, as it was ascertained by Kristiansen and Indarti (2004), Ramayah and Harun (2005), Segal et al (2002), Zhao et al (2005) and Taormina and Santos (2008), as cited by Da Costa and Mares (2016). In their opinion, self-efficacy has a positive influence towards entrepreneurial intention. Taormina and Lao (2006), as well as Urban (2006), opposed this view and argued that self-efficacy does not have a positive influence towards entrepreneurial intention. These contradictory views as well as many others of similar nature in this field are partly what motivated us to undertake the current study.

Bird (1988) praised the role of entrepreneurial intention in the beginning of the organization, since the influence of other external stakeholders, corporate structure, politics and image and culture is not yet established. Consequently, the founder’s intention determines the form and the direction the newly established venture must take.

While previous authors referred to entrepreneurial intentions as the best predictor of individual behaviours and particularly when these behaviours are not common, Delmar and Davidsson (2000) supported the argument that entrepreneurial ideas start with an inspiration, but appends that intentions are needed in order for those entrepreneurial ideas to nurture.

Entrepreneurial intentions have an effect on the intended or newly established organization, but also have an influence on the actions of existing organizations. As a result, existing organizations embody and elaborate intentions that ultimately affect a venture’s success.

Figure 2 shows the role of self-efficacy in shaping entrepreneurial intentions. Entrepreneurial environment, risks and hardships, as well as our ability to anticipate different outcomes of our ventures, are all life variables in nurturing entrepreneurial intentions.

Figure 2.

Sources: Adapted from Boyd and Vozikis (1994), Krueger and Brazeal (1994) and Scherer, Adam, Carley, and Wiebe (1989).

A study conducted by Da Costa and Mares (2016) revealed that in Portugal, entrepreneurial intentions among university students from Politechnic Institute of Setúbal (Portugal) was gender specific where males were found to have a higher level of entrepreneurial intentions than their female counterparts. In South Africa, similar study results revealed a low level of entrepreneurial intentions among graduates in the country, because most of graduates favour seeking employment from private companies or public organizations instead of thinking of working for themselves. This is a disappointing finding, considering both the importance of self-efficacy and the need for higher level of entrepreneurial behaviour in the country (Fatoki, 2010). According to him (Fatoki), macro-economy conditions are to blame for this poor level of entrepreneurial behaviour in South Africa. Given these findings, there is a need to consider entrepreneurial intentions as environment and discipline specific as well, because, according to Remeikiene, Startiene, and Dumciuviene (2013), 77 per cent of university students in economics have shown intentions in entrepreneurship, and this percentage is higher than that of students in engineering.

Concerning the field/sector of exercising entrepreneurial behaviour, Scheepers, Solomon, and De Vries (2009) conducted a study on entrepreneurial intentions and behaviour of South African university students. The findings revealed that students prefer to venture into services such as consulting based on traditionally proven concept. This finding suggests less risk-taking attitude, which also confirms the low interest in entrepreneurial intentions among university students in South Africa as mentioned above.

Methodology

Research Philosophy and Approach

This study departed from a philosophical view that factual knowledge gained through observation, including measurement, is trustworthy. Hence, there is use of positivism philosophy, which depends on quantifiable observations that lead themselves to statistical analysis. The study’s approach was hypothetico-deductive. By this method, hypothesis has been formulated which was proven at later stage in the study.

The next step was to specify the most adequate operations to be performed in order to test the specific hypothesis under given conditions, which allows us to accept or reject the hypothesis. The following are the steps performed to conduct the study:

Literature review on self-efficacy; its domains, goals and control beliefs.

Questionnaire design and its pilot-testing

Collecting data from entrepreneurship students

Data capturing and generating statistical data

Data presentation, analysis and interpretation

Research Strategy and Paradigm

The appropriate strategy for the current study was a survey-correlation as it is frequently used in many researches in the same domain. In addition, and subsequent to the current study, a survey usually adopts both qualitative and quantitative methodologies. A research strategy selects a sample of respondents out of a population and then assesses the information using statistical techniques to make inferences about the population. This is what the current study did.

The Population and Sample

The study departed from a view that a sample size varies inversely to the internal length: the larger the sample, the shorter the interval length for a given confidence level. If the sample is too large, the extra data collected will be a waste of money and effort, because the same results would have been obtained by a smaller sample. Similarly, if the sample is too small, the resulting conclusions will be uncertain. From these observations, it is possible to conclude that the correct sample size depends on the following three factors:

The level of confidence desired: This is selected by the researchers.

The variability in the population being studied: So, if the population is widely dispersed, a large sample is required, while a small dispersion would require a smaller sample.

The maximum allowable error (E): This is the maximum amount a point estimate should, in the opinion of the researchers, differ above or below the parameter being estimated, that is, the difference between the sample mean and the population mean.

Table 1 below shows the total number of students undertaking the entrepreneurship programme from the four mentioned universities during the 2014 academic year.

Sampling was deemed essential because not all 966 students (see table 3 below) could be reached due to time constraints and financial constraints. Table 2 shows the formula used to calculate the sample for the study.

Table 1.

Determination of the Population

University	Number of Students and Level of Study		Source of Information
	Undergraduate	Postgraduate
University of Cape Town	57	62 MBA	Administrative staff and program coordinator
University of Stellenbosch	250	40 MBA	Administrative staff and subject lecturer
University of the Western Cape	170	52 Honours	Administrative staff and program coordinator
Cape Peninsula University of Technology	335 for both undergraduate and postgraduate		Administrative staff and head of department
Total	966

Source: Authors’ compilation from data collected.

Table 2.

Formula to Determine the Sample Size

N =

\frac{π (1 - π)}{E^{2}}

Z²

Key:N = size of sample neededπ = proportion of the populationZ = the critical value associated with the chosen level of confidenceE: Margin of error

Source: Willemse (2009, p. 195).

Table 3.

Population and Sample

University	Number of Students*
University of Cape Town	119**
University of Stellenbosch	290
University of the Western Cape	222
Cape Peninsula University of Technology	335
Total	966
Sample	270

Source: Authors’ compilation from data collected.

Notes: *2014 academic year figures.

**This figure from UCT does not include modular students. It includes undergraduate and MBA students only.

It was established that the total number of students attending entrepreneurship from the four universities that were the units of investigation was ± 966. Considering a 95 per cent confidence level, together with a margin error of 5 per cent, a sample of between 260 and 278 was judged enough.

Data Collection

In researches, data collection can be done through a number of means and techniques: observation, experimenting and many others. For the purpose of this study, the researchers requested the lecturers to spare a few minutes towards the end of their lecturing sessions in order for the students to complete the questionnaires. Concerning full-time students, both lecturers and researchers were present at the moment of data collection.

Data Capturing and Interpretation

After data has been collected data, the researchers proceeded by capturing it, with the use of Statistical Program for Social Science (SPSS 22). The use of this programme allowed the descriptive statistics to be produced, before univariate analysis (pie chart, histograms and frequency tables), regression and correlation analyses were conducted. A combination of factor analysis was used for correlation analysis while the analysis of variance (ANOVA) and Chi-square were used for nominal data (Multivariate analysis).

The use of the above statistical tests became imperative as they helped to explain or predict the behaviour of the dependant variable. The above statistical tests complemented each other, and in the current study, factor analysis was used due to its capacity of simplifying complex data, as the instrument used to collect data comprised 13 categories and 81 items. The usefulness of ANOVA lies in its ability to test the hypothesis. In early stages of the current study, a hypothesis to test was formulated, and with the help of ANOVA, it was possible to prove that hypothesis and draw conclusion about it. The data collected contained nominal data, and Chi-Square test are suitable for nominal data. Chi-Square test is probably the most widely used nonparametric test for significance. This led to regression analysis in order to test the relationships between variables, as well as correlation analysis to test the strength of those relations.

Findings

Being an instrument to test the existence of any relation between dependent and independent variables, regression analysis conducted between self-efficacy and entrepreneurial intentions concluded the existence of a positive relationship between them. However, the results of the regression analysis are always regarded as inconclusive, hence the researchers proceed with correlation analysis, which is the determination of the strength of the relation identified during regression analysis. For the purpose of the current study, the correlation analysis showed a strong relationship between dependent and independent variables since eight out of nine items.

During the discussion in the literature review, several arguments have been raised regarding the relationship between self-efficacy and entrepreneurial intentions. For instance, it was argued that self-efficacy has an effect of entrepreneurial intent as it contributes in controlling attitudes and subjective norms of an entrepreneur. Furthermore, it was revealed that a person’s belief in his/her capacity to perform a task has an impact on the development of both entrepreneurial intentions and actions or behaviours.

Concerning entrepreneurial intentions, the literature review has richly argued that several constructs, including education, are greatly correlated with intentions to found a venture. Further arguments in this regard, such as those by Kristiansen and Indarti (2004), Ramayah and Harun (2005), Segal et al. (2002), Zhao et al (2005) and Taormina and Santos (2008), as cited by Da Costa and Mares (2016), support the view that entrepreneurial intention is strongly influenced by self-efficacy. The literature review has also found argument that is opposed to this view: Taormina and Lao (2006), as well as Urban (2006), argued that self-efficacy does not have a positive influence towards entrepreneurial intention. However, the findings from the statistical analysis of the current study revealed that self-efficacy supports entrepreneurial intentions.

Respondents’ Details

This section presents the age, gender, race and the level of study of the respondents; entrepreneurship students from University of Cape Town (UCT), University of Stellenbosch (US), and University of the Western Cape (UWC) as well as Cape Peninsula University of Technology (CPUT).

Table 4.

Age Groups pf Respondents

Age Category	<20	21–25	26–30	31–35	36–40	>40
%	35.4	52.8	5.9	1.8	2.6	1.8

Source: Authors’ compilation from data collected.

Table 4 displays information about the different age categories of the respondents where the cohort of 21–25 is mostly represented (52.8%). The category of up to 20 comes in the second position with 35.1 per cent. Both groups combined represent a huge majority of 87.9 per cent from the respondents. The current study’s respondents were both undergraduate and postgraduate university students. However, undergraduate students constitute a majority, and many of those undergraduate students belong to those two groups, if one considers the average age of starting university to be 18 years in South Africa. There were also a few postgraduate and MBA students, hence the presence of some elements that are older than 25 years of age.

Considering the fact that some universities in South Africa still do not have a dedicated department of entrepreneurship, this high percentage of young people who are undertaking entrepreneurship education shows a positive sign about the future of entrepreneurship in the country. This is in line with Co and Mitchell’s (2006, p. 349) call that Higher Learning Institutions’ (HLIs’) intervention can also consist in promoting the character of entrepreneurship among the youth: some of the techniques that can be used are as follows:

 Implanting a deep awareness of risks and benefits

 Teaching opportunity identification

 Creating and destructing enterprises

 Instilling the traits of entrepreneurship in students

Furthermore, this finding would be responding to Fayolle and Gailly’s (2008) as cited by Da Costa and Meres (2016) pronouncement that one of the role entrepreneurship education plays is to stimulate students to consider starting business as one of career alternatives and instil a positive attitude towards it.

Table 5 reports that 56.9 per cent of the respondents were female as opposed to 42.3 that were male. In all, 0.7 per cent of the respondents did not indicate whether they were male or female. In South Africa, the percentage of females surpasses that of males (CS2016.statsSA). If the finding of Da Costa and Meres (2016)—that male students show higher entrepreneurial intentions than females—is to be true in South Africa, this would be regarded as a problem considering they will have a higher number of people following a programme without an intention of establishing a career in it.

Table 5.

Gender of Respondents

		Frequency	Percentage	Valid Percentage	Cumulative Percentage
Valid	Male	116	42.3	42.6	42.6
	Female	156	56.9	57.4	100.0
	Total	272	99.3	100.0
Missing	system	2	0.7
Total		274	100.0

Source: Authors’ compilation from data collected.

Table 6.

Racial Group of the Respondents

		Frequency	Percentage	Valid Percentage	Cumulative Percentage
Valid	African	127	46.4	46.9	46.9
	Chinese	1	0.4	0.4	47.2
	Coloured	44	16.1	16.2	63.5
	Indian	4	1.5	1.5	64.9
	White	94	34.3	34.7	99.6
	Other	1	0.4	0.4	100.0
	Total	271	98.9	100.0
Missing	system	3	1.1
Total		274	100.0

Source: Authors’ compilation from data collected.

However, the enrolment of a higher number of females in South African Institutions of higher learning is in line with the government and other stakeholders’ requests (such as organizations for human rights and organizations for women empowerment and emancipation) as they are the majority of the population. There is expectation that their increased number at the university may lead them to an entry to entrepreneurial activities in order for them to participate in the mainstream economy.

Table 6 provides an attention-grabbing picture concerning the racial groups of the study participants. A simple majority of (46.4%) belonged to the African group while 34.3 per cent went to whites. Also, 16.1 per cent went to coloured while Indians were 1.5 per cent. There was a group referred to as ‘other’ which scored 0.4 per cent (1 respondent) while Chinese also scored 0.4 per cent. In many parts of the world, the issue of race is sometimes very sensitive and cause debates especially when people do not want to be associated with this or that race. In the current study, all races were considered, and opinions are from across the board, making the study complete with regards to racial representation. A study conducted by Luiz and Mariotti (2011) on entrepreneurship in an emerging and culturally diverse economy revealed that coloured and Africans were more likely to take risk upon completion of their studies than Indians and whites, because the former believe that entrepreneurs do almost anything to make a profit, while the latter were neutral about this option. Contrary to our argument earlier and finding of Da Costa and Meres, a further interesting finding of Luiz and Mariotti’s study is that whites respondents felt that tertiary education is not necessary to succeed as an entrepreneur, Africans were least to think like that. These diverging opinions among certain aspects of entrepreneurship among our youth are really important for the continuity of research in entrepreneurship and entrepreneurial intentions.

Concerning entrepreneurial self-efficacy among racial groups in South Africa, a study conducted by Urban (2006, p. 6) indicates that Indians scored higher than any other race in general self-efficacy, entrepreneurial self-efficacy innovation and entrepreneurial self-efficacy financial control. Blacks scored higher in entrepreneurial self-efficacy marketing. However, as confirmed by Urban (2006, p. 6), there was no significant difference in self-efficacy total composite between Indians, Blacks and Caucasians.

Table 7.

Current Level of Study

		Frequency	Percentage	Valid Percentage	Cumulative Percentage
Valid	1st year	76	27.7	27.8	27.8
	2nd year	90	32.8	33.0	60.8
	3rd year	51	18.6	18.7	79.5
	Postgraduate	42	15.3	15.4	94.9
	Masters	13	4.7	4.8	99.6
	PhD	1	0.4	0.4	100.0
	Total	273	99.6	100.0
Missing	system	1	0.4
Total		274	100.0

Source: Authors’ compilation from data collected.

Table 7 shows that the majority of the study’s respondents (32.8%) were students in their second year, followed by the students in their first year (27.7%), followed by third year students (18.6%), and then postgraduate (Honours, B. Tech and Post-graduate diploma) students (15.3%). Thirteen (4.7%) of the respondents were Master’s students while one student (.4%) was a PhD student.

Though the researcher’s attempt to collect data from UCT-MBA students did not materialise, there is a clear indication that there are very few postgraduate students in entrepreneurship. This raises the question of whether after completing their undergraduate qualifications (as designated above) students go and find business enterprises, or whether they change their study programme. On the other hand, there is the possibility that some of those universities do not have specific Master’s and PhD programmes to give the student the option to continue in the same field. Future researches should shed more light in this regard.

Regression Analysis

Regression analysis is defined as a way of checking the relationship between variables. It is important to remember that variables are simply the bits of information we have taken, and the use of regression analysis enables us to find patterns in our data and make predictions.

The regression analysis between self-efficacy and entrepreneurial intentions was conducted to determine the extent to which self-efficacy influences entrepreneurial intentions. The results provided by the regression analysis show a statistical significance of p = 0.000<0.05 with the model summary indicating 0.112>0.05. This means that the model fits the data.

From Table 8, the item of ‘I believe in my creativity’ (p = 0.000) shows a positive relationship with the variable of self-efficacy, and therefore, this variable slightly increases the chances of entrepreneurial intentions among entrepreneurship students.

Based on the argument by Bandura (1989) and Bandura (1997) that self-efficacy is a key to determining human agency and has convincingly shown that people with higher self-efficacy for a particular task are more likely to pursue and persist in it, the researchers expected a higher rate of positive response between the two variables. Unfortunately, the variable of self-efficacy did not show a strong correlation with that of entrepreneurial intentions among the respondents. A finding such as this one makes one wonder if the respondents (entrepreneurship students) will ever become entrepreneurs while they do not have a high level of self-efficacy. This finding goes against Krueger and Brazeal (1994, p. 94)’s assertion that ‘No self-efficacy, no behaviour ’.

Table 8.

Regression Between Self-efficacy and Entrepreneurial Intentions

Model B		Unstandardised Coefficients		Standardised Coefficients	T	Sig.
Model B			Std. Error	Beta	T	Sig.
1	(Constant)	2.469	0.306		8.062	0.000
	When I try hard enough, I can always manage to solve difficult problems.	0.076	0.075	0.091	1.021	0.308
	In demanding situations, I can usually think of solutions.	0.015	0.084	0.017	0.179	0.858
	In demanding situations, I can always make decisions.	−0.013	0.076	−0.014	−0.167	0.868
	No matter what comes my way, I am able to handle it.	0.091	0.070	0.107	1.289	0.199
	I can rely on my ability to solve problems.	0.037	0.083	0.042	0.441	0.660
	I am able to manage money.	−0.002	0.048	−0.003	−0.044	0.965
	I believe in my creativity.	0.237	0.061	0.296	3.915	0.000
	I can get people to agree with me.	−0.001	0.078	−0.001	−0.016	0.987
	I possess leadership qualities.	−0.096	0.072	−0.110	−1.330	0.185

Source: Authors’ compilation from data collected.

Note: Dependent Variable: Entrepreneurial intentions.

However, not all may be bad with this finding. According to the European Commission (2012, p. 50), self-efficacy leads to the false perception of a very low possibility of failure, while it is an important requisite for entrepreneurial actions. Given the age groups of the respondents, where the majority of them are between 21and 25 years of age, one would assume that the respondents are yet to decide on their entrepreneurial orientations, which translates into a low self-efficacy level.

Correlation Analysis

Correlation analysis is a statistical measure that indicates the extent to which two or more variables fluctuates together, where a positive correlation indicates the extent to which those variables increase or decrease in parallel, while a negative correlation indicates the extent to which one variable increases as the other deceases.

Table 9.

Correlation Between Self-efficacy and Entrepreneurial Intentions

Item	Pearson Correlation	p value
When I try hard enough, I can always manage to solve difficult problems.	0.252	0.000
In demanding situations, I can usually think of solutions.	0.199	0.001
In demanding situations, I can always make decisions.	0.182	0.003
No matter what comes my way, I am able to handle it.	0.254	0.000
I can rely on my ability to solve problems.	0.243	0.000
I believe in my creativity.	0.333	0.000
I can get people to agree with me.	0.217	0.000
I possess leadership qualities.	0.143	0.022

Source: Authors’ compilation from data collected.

The independent variable of self-efficacy has a total of nine items. As reflected on table 9 above, the bivariate test showed that only eight have the required correlation value of above 0.005, paired with a p value of between 0.000 and 0.022. This means that there is a strong relationship between the independent variable of self-efficacy and entrepreneurial intentions. This also suggests that the independent variable is statistically significant.

Self-efficacy is considered a cornerstone of entrepreneurial behaviour; hence, these results are important and worth interpreting. It is by self-efficacy that one can judge how well the entrepreneur will cope with the challenges of running a venture. The European Commission (2012, p. 49) defines self-efficacy as the belief in one’s ability to perform certain activities successfully. Furthermore, the findings correlate with Bandura et al. (2001) (see Section 3.3.4.1 of the current study) who argued that self-efficacy is one of a variety of socio-cognitive influences on career aspirations among children, and that they influence the development of both entrepreneurial career intentions and subsequent actions.

Conclusion and Recommendations

The study’s objective was to measure the university students’ perception about the role of self-efficacy in enhancing entrepreneurial intentions. The study reviewed the scholars’ views on the role of self-efficacy in business start-up, as well as entrepreneurial intentions. To find the underlying cause of the topic under investigation, the study made use of statistical inferences; it was discovered that the students support the opinion that self-efficacy is essential for entrepreneurship, thereby confirming the hypothesis of the study. In addition, the study found that self-efficacy enables understanding of entrepreneurial success while influencing entrepreneurial success. To improve the entrepreneurial intentions, factors such as entrepreneurial environment, risks and hardships, as well as the ability to anticipate the different outcomes, have to be reinforced.

The domains of entrepreneurial self-efficacy have been unveiled as being business start-up and growth, goals beliefs as well as control beliefs (positives and negatives), which are the different phases one goes through to bring the venture to a success.

Through the above findings, the study has significantly contributed to the ongoing debate about self-efficacy, as well as entrepreneurial intentions. Specifically, the study showed the opinions of an important component of the population of our macro-social environment (university students) about the role of self-efficacy on entrepreneurial intentions.

The whole field of entrepreneurship study should have practical implications. The current topic carries practical implications as well, which once implemented can boost entrepreneurial behaviour in South Africa. It is therefore recommended to the Universities to do the following:

Develop self-efficacy courses in their entrepreneurship programmes

Identify business people with high self-efficacy to guest-speak

Engage students in self-efficacy building activities

In South Africa, there are many business owners without formal education and others with a formal education outside business fields. Many of those business owners rely on government support to successfully start and grow their businesses. Government should therefore make them understand the role of self-efficacy and train them to acquire it if they are to succeed in their business endeavours.

South Africa has established a number of agencies to help in entrepreneurial initiatives. Agencies such as Small Enterprise Development Agency (SEDA) and National Youth Development Agency should organise sessions and trainings to instil self-efficacy among students and other aspiring entrepreneurs. South Africa counts a big number of non-profit organizations that can also assist if they were funded through national and international grants. And lastly, ‘learning from peers’ or mentorship approach can be instituted by the above agencies, universities or government itself for the students to get training and motivation in entrepreneurship.

There is a growing awareness among university students that public or private sectors in South Africa are not capable of providing employment for all the graduates. Therefore, there is a need to encourage them to think creatively in a country that is in such high need of entrepreneurship.

Limitations and Future Research

A study of this nature is limited in terms of geographical scope, the audience and its age. The study was only conducted in universities located in Cape Town, and though they host a good number of students from many parts of the country, the results cannot be said to represent the opinion of all entrepreneurship students in South Africa.

Furthermore, the study mainly involved undergraduate students. From Table 6, it shows that 79.1 per cent of the respondents were undergraduate students, while 20.9 per cent were postgraduate students. This makes the audience a relatively young group, and these results must be interpreted in that context. Further research should include the whole country, focus on different or all age categories and involve other fields of study if possible.

Footnotes

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The authors received no financial support for the research, authorship, and/or publication of this article.

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