STANBUL NVERSTES
KTSAT FAKLTES
EKONOMETR VE STATSTK
DERGS
Ekonometri ve statistik Say:23 2015 79-93
THE EFFECT OF ENTREPRENEURSHIP
EDUCATION ON ENTREPRENEURIAL
INTENTIONS OF UNIVERSITY STUDENTS IN
TURKEY
Ebru DOAN*
Abstract
The number of entrepreneurs has been increasing with each passing day in the contemporary business world
where new opportunities have been emerging. As entrepreneurship, which is quite important for economic and
social development, has become more widespread and more active. Many studies have covered the topic of
determining the factors affecting individuals entrepreneurial intentions and the relation between
entrepreneurship education and entrepreneurial intentions.
This study examined the factors affecting the entrepreneurial intentions of the final year undergraduate students
of business administration at a selected Turkish university and the relation between the success levels of the
students in the entrepreneurship class and their entrepreneurial intentions. The study found a significant positive
correlation between the students success levels in the entrepreneurship class and their entrepreneurial intentions.
Besides, it was found that the students with a self-employed father have higher entrepreneurial intentions in
comparison with those whose fathers are not self-employed.
Keywords: Entrepreneurship, Entrepreneurial Intention, Entrepreneurship Education.method
Jel Classification: M13
1. INTRODUCTION
Entrepreneurship, one of the concepts that has been used in social disciplines for a
long time, is one of the most researched topics in the literature. Entrepreneurship is a
multidimensional phenomenon and an important element of economic development; in this
respect, the issue of developing the entrepreneurship more effectively emerges.
*
Asst. Prof. Dr. , Istanbul University, Faculty of Economics, Department of Business Administration, Istanbul,
Phone: 0(212) 440 00 00 11613, [email protected]
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The Effect of Entrepreneurship Education on Entrepreneurial Intentions of University Students in Turkey
Entrepreneurship, which is above all a mentality, refers to the motivation and capacity
of a person to determine an opportunity independently or within an organization and to go for
that opportunity in order to create a new value or achieve an economic success.
Entrepreneurship is related to people and their preferences and activities for establishing,
taking over or running an enterprise or participating in strategic decision mechanisms of a
company. Entrepreneurs benefit from creativity or innovations in order to get into the market
and compete, to change this market or to create a new market, and they are a heterogeneous
group coming from all social segments. Entrepreneurial behavior includes such common
features as readiness for taking risks and independence (CEC, 2003: 5,6).
Presence of successful entrepreneurs and the increase of the number of entrepreneurs
in a society is dependent on the potential entrepreneurs receiving entrepreneurship education
and having a desire for entrepreneurship. Thus, it is necessary to steer students with
entrepreneurial intentions towards entrepreneurship. And for this purpose, it is necessary to
make research on entrepreneurial intentions for revealing potential entrepreneurs and thus to
see their deficiencies in terms of entrepreneurship and determine the qualities requiring
improvement.
Especially young entrepreneurs receiving university education should be provided
with entrepreneurship education focusing on mentality, consciousness and skills. In this
respect, more courses should be provided in relation to entrepreneurship especially in
universities. This study examined the factors affecting the entrepreneurial intentions of the
final year undergraduate students of business administration at a selected Turkish university
who have received entrepreneurship courses, and the relation between the success levels of
the students in the entrepreneurship class and their entrepreneurial intentions.
2. THE RELATION BETWEEN ENTREPRENEURSHIP EDUCATION AND
ENTREPRENEURIAL INTENTION: LITERATURE REVIEW
Entrepreneurship has become much more important in the contemporary world where
financial crises have been occurring. Entrepreneurship and innovation are regarded as an
important tool to resolve the global challenges of the 21st century, to structure the sustainable
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development, to create new employment areas, to bring about renewed economic growth, and
to enhance welfare (WEF, 2009: 7).
The most commonly debated question in the research on entrepreneurship is probably
why some individuals are entrepreneurs while the others are not. Numerous studies on
business creation suggest that individual differences are the basic reason underlying the
question why some individuals actively go for establishing their own businesses while the
others do not. Behaviorists consider entrepreneurs independently from individual
characteristics as individuals with entrepreneurial behavior. According to the behavioral
approach, behavior can be learnt through formal and informal processes (Pao et. al., 2015:
58).
Drucker considers entrepreneurship as a discipline (Drucker, 1993: vii). From this
perspective, entrepreneurship appears as a learnable fact. Therefore, entrepreneurship plays a
critical role in improving prospective entrepreneurs and steering them towards development
and entrepreneurship by providing them with a combination of knowledge, skills and
capability to establish and maintain new enterprises (Dutta, Li and Merenda, 2011: 165).
Education is vital to create an understanding of entrepreneurship, to develop entrepreneurial
capabilities, and to contribute to entrepreneurial identities and cultures at individual,
collective and social levels (Rae, 2010: 603). Therefore, an individual, who receives a basic
entrepreneurship education providing competence in administrative terms, is more likely to
engage in an entrepreneurship activity in the future (Dutta, Li and Merenda, 2011: 174).
Entrepreneurship education has not achieved sufficient maturity either in theory or in
practice. Early courses on entrepreneurship have started in the United States in 1940s. Since
those times, entrepreneurship education has increased considerably in the developed world
(Pao et. al., 2015: 59). The number of universities and colleges with entrepreneurship
courses in their curricula has clearly increased in the United States since the late 1960s. The
entrepreneurship-related courses of many schools such as Entrepreneurship & Venture
Creation, Small Business Management, Enterprise Development occupy a significant
place in their curricula. Increasingly large number of colleges and graduate schools have
accepted entrepreneurship as a fundamental area (Lee, Chang and Lim, 2005: 30). This trend
became especially common in the universities in the United States, Canada and France in
1990s (Pao et. al., 2015: 59). The financial and economic crisis that emerged in 2008 and
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The Effect of Entrepreneurship Education on Entrepreneurial Intentions of University Students in Turkey
the subsequent global recession have led to the emergence of a new economic era with
important effects on entrepreneurship education, too (Rae, 2010: 591).
A study was carried out on the graduates who completed the University of Arizonas
Berger Entrepreneurship Program between 1985 and 1999. This study determined that
entrepreneurship had an effect on generating enterprises and creating welfare. Furthermore, it
was concluded that entrepreneurship education had positive impacts on individuals risk
taking, enterprise education, inclination to be self-employed, and income/welfare generation.
Those who received entrepreneurship education earned 10% higher monthly income in
comparison with those who did not. In addition, and more interestingly, it was found that the
graduates who had received this education gained 62% more personal assets than those who
had not received (Charney and Libecap, 2000: 1-7).
The entrepreneurship education and culture existing in the United States have formed
the basis of the strong infrastructure needed for the creation of worldwide organizations such
as Microsoft, Oracle, Dell, and Wal-Mart. In addition to increasing the national welfare, such
successful enterprises have created innovative products and services and strengthened the
competitive advantage of the United States (Lee, Chang and Lim, 2005: 30).
Entrepreneurship education is an important method encouraging entrepreneurship
because education 1) gives a feeling of independence and self-confidence to individuals, 2)
enables the recognition of alternative career options, 3) broadens the individuals horizons by
enabling them to better perceive the opportunities, and 4) provides the knowledge that
individuals will use in developing new business opportunities. Through adequate
entrepreneurship education, an individual acquires the skills and knowledge needed for
establishing and developing a new business (Pao et. al., 2015: 60). However, what can
change the entrepreneurship intentions of students during education programs is not what they
learn about entrepreneurship itself, but rather what they learn about themselves and their own
capabilities. When they want to put their entrepreneurship education into practice (to establish
an enterprise) in any future stage of their lives, the learning resources and incubation will help
them (Snchez, 2011: 251).
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Entrepreneurship is the basic guide for innovation, competitiveness, and development.
Due to their strong presence in basic sectors such as service- and knowledge-based activities,
smaller enterprises and entrepreneurs play a fundamental role in the economy of the European
Union today. There is a strong positive correlation between economic performance and
entrepreneurship in terms of growth, companies lifetime, innovation, employment
generation, technological change, increase in productivity, and export. Besides,
entrepreneurship also contributes to the society. Entrepreneurship is a tool for personal
development, and it provides social cohesion when everybody is provided with the
opportunity to establish his/her own business regardless of his/her background or origins (EC,
2004: 3).
One of the four strategic objectives of the Strategic Framework for European
Cooperation in Education and Training, which was approved by the Council of the European
Union in 2009, is enhancing creativity and innovation, including entrepreneurship, at all
levels of education and training (European Council, 2009: 4). In this respect, the basic
knowledge created through entrepreneurship education broadly involves (1) determining
opportunities, (2) realizing the opportunities by producing new ideas and mobilizing
necessary resources, (3) establishing and managing a new enterprise, and (4) developing
creative and critical thinking skills (CEE, 2005: 3).
Entrepreneurship education has recently come to be considered as a process in which
individuals are equipped with capabilities that they can use in many areas of their lives. In this
context, entrepreneurship covers the capability of individuals to transform their ideas into
action. Entrepreneurship includes such elements as creativity, innovation, risk taking, and
planning and managing projects. Entrepreneurship education contributes to the
competitiveness of Europe, and at the same time, it provides social benefits (EC, 2011: 2).
The report Effects and Impact of Entrepreneurship Programs in Higher Education
published by the European Commission in 2012 states that entrepreneurship education in
higher education improves students basic competence in entrepreneurship, reinforces
students entrepreneurial intentions, and increases their employability. The mentioned report,
which recommends that entrepreneurship education is disseminated to all disciplines and
delivered through compulsory courses in universities, emphasizes that the post-education
monitoring activities should be performed repetitively (EC, 2012: 7).
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The Effect of Entrepreneurship Education on Entrepreneurial Intentions of University Students in Turkey
One of the action pillars of European Commissions Entrepreneurship 2020 Action
Plan is entrepreneurial education and training to support growth and business creation.
Investment in entrepreneurship education is one of the investments that will yield the highest
return for Europe. Whether they establish an enterprise or not, those young people who
receive entrepreneurship education improve their business knowledge and basic attitudes and
skills that include creativity, initiative-taking, decidedness, team work, risk taking, and sense
of responsibility. Such entrepreneurial mentality enables entrepreneurs to put their ideas into
practice and increases their employability (EC, 2013: 5).
The report Educating the Next Wave of Entrepreneurs, Unlocking Entrepreneurial
Capabilities to Meet the Global Challenges of The 21st Century, which was published by the
World Economic Forum and focuses on entrepreneurship education, states that there are a
number of approaches which are being effectively utilized and which support the call to
action to mainstream entrepreneurship education. These approaches are developing
leadership and life skills, embedding entrepreneurship in education, taking a cross-
disciplinary approach, utilizing interactive pedagogy, and leveraging technology. And the
basic factors of success enabling efficient entrepreneurship education are considered as the
entrepreneurial ecosystem, developing effective educators, curriculum development,
engagement of business, advancing innovation, and sustainable funding (WEF, 2009: 20-22).
With its high dynamism to affect economic and social development, entrepreneurship
is an inevitable element in the achievement of Turkeys 2023 targets. For this purpose, a
strategy and action plan focusing on the topic of entrepreneurship has been created, and the
Entrepreneurship Council has been carrying out its entrepreneurship activities under the
coordination of KOSGEB (Small and Medium Enterprises Development Organization). The
general aim of the Entrepreneurship Strategy and Action Plan of Turkey for the period of
2015-2018 is to disseminate the culture of entrepreneurship, to create a strong ecosystem, and
to develop entrepreneurship. One of the strategic targets in the intervention areas determined
for the purpose of achieving this general aim is the dissemination of formal and non-formal
entrepreneurship education and the development of a consultancy system for entrepreneurs.
This strategic target aims to embed the topic of entrepreneurship in university programs as
well as primary/secondary education programs, to include entrepreneurship education in the
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curricula of the faculties of education, and to disseminate the KOSGEB trainings and
entrepreneurship trainings within the framework of lifelong learning. Entrepreneurship
education in higher education is delivered through formal education (entrepreneurship
courses), non-formal education (KOSGEB trainings), and various projects. KOSGEB
confirms the entrepreneurship courses that have been delivered in higher education
institutions in accordance with the KOSGEB criteria since 2012 as KOSGEB Practical
Entrepreneurship Education upon the requests of relevant higher education institutions
(KOSGEB, 2015: 7,13,50).
The literature related to the determination of the relation between entrepreneurship
education and entrepreneurial intentions of university students was reviewed, and some of the
related studies are summarized in Table 1.
Table 1: Studies on the Relation between Entrepreneurship Education and
Entrepreneurial Intentions of University Students
Author Purpose Findings
Souitaris, To test the effect of entrepreneurship The entrepreneurship programs raise some attitudes and
Zerbinati and programs on the entrepreneurial attitudes overall entrepreneurial intentions of students.
Al-Laham and intentions of students.
(2007)
Balaban and To determine the factors affecting the Entrepreneurship education is a sufficient condition (vis--vis
zdemir (2008) entrepreneurial intentions of students of a necessary condition) for the emergence of entrepreneurial
business administration and the relation intentions.
between the intentions and the
entrepreneurship education/courses.
Wu and Wu To examine the relationship between Students who had entrepreneurship education show a greater
(2008) university students higher educational intention to start up new business then those who did not
background and their entrepreneurial have.
intention
Patr and To determine potential entrepreneurs and University students have sufficient levels of entrepreneurship
Karahan (2010) find the ways to lead them to the market, capacities and that those who took entrepreneurship
and to detect the problems in education are more likely to establish their own businesses.
entrepreneurship education and produce
solutions.
Izedonmi and To examine the effect of entrepreneurial Positive relationship exists between students
Okafor (2010) education on students entrepreneurial entrepreneurship education and their entrepreneurial
intentions. intentions. Knowledge and skills are major influencing
factors in the students entrepreneurial intentions.
Ahmed et. al. To study the impact of personal traits, Increased education level has an impact on entrepreneurial
(2010) demographic characteristics and intentions. Years of study are found to be an important
entrepreneurship education on predictor of entrepreneurial intentions. Family business
entrepreneurial intentions of university experience is also one of the important predictors of
students entrepreneurial intention.
Sanchez (2011) To test the effect of entrepreneurship Entrepreneurial education increases students competencies
education programs on the entrepreneurial (self-efficacy, pro-activeness and risk taking) and intention
competencies and intention of university towards self-employment.
students.
Byabashaija and To examine the impact of entrepreneurial Entrepreneurship education effects perceptions of the
Katono (2011) education and societal subjective norms on desirability and feasibility of entrepreneurship as a career of
entrepreneurial attitudes and intentions of choice and increases students self-condence.
university students to start a business
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The Effect of Entrepreneurship Education on Entrepreneurial Intentions of University Students in Turkey
Gzek and To detect the entrepreneurial intentions of Entrepreneurship is directly proportional to education.
Akbay (2012) prospective entrepreneurs, the qualities they
need to have, the places they can get
support, and their problems.
Yumuk (2013) To determine the factors playing a role in Entrepreneurship education have a partial effect on
the occupational preferences of university entrepreneurial intention.
students and to explain the factors affecting
entrepreneurial intentions.
zdemir (2015) To determine the effects of socio- Whether there are any entrepreneurs in a students family or
demographic characteristics of university not have an effect on the need for success and creativity
students on their entrepreneurial intentions dimensions of entrepreneurial intention. Whether a student
and to reveal whether their status of has received entrepreneurship education or not have an effect
receiving entrepreneurship courses has an on the external locus of control dimension of
impact on entrepreneurial intention. entrepreneurial intention. Those who have not received
entrepreneurial education have higher belief in external locus
of control in comparison with those who have received. The
entrepreneurship courses have contribution to the awareness
of students about entrepreneurship.
Sources: (Souitaris, Zerbinati and Al-Laham , 2007: 566-591; Balaban and zdemir, 2008: 133-148; Wu and Wu, 2008: 752-774; Patr and
Karahan, 2010: 27-44; Izedonmi and Okafor, 2010: 49-60; Ahmed et. al., 2010: 14-22; Snchez, 2011: 239-254; Byabashaja and
Katono, 2011: 127-144; Gzek and Akbay, 2012: 45-60; Yumuk, 2013: 96-120; zdemir, 2015: 41-65)
3. RESEARCH METHOD
The present study aims to detect the factors affecting entrepreneurial intentions of
university students and to determine the effect of entrepreneurship education on
entrepreneurial intention.
The population of the study was made up of the final year students of the Department
of Business Administration of the Faculty of Economics at Istanbul University who took the
entrepreneurship course. An entrepreneurial intention questionnaire was created for the
university students by using the entrepreneurial intention test developed by KOSGEB. The
questionnaire was administered to the students face-to-face. 83 of the 110 students (75.45%)
answered the questionnaire; according to the results of the scoring, those students who took a
score above 70 out of 100 were considered as having entrepreneurial intention.
Socio-demographic characteristics of the students are presented on a frequency
distribution table. Then, the factors affecting entrepreneurial intention were analyzed through
the use of logit model. Such models are named as binary choice models if the dummy
variables, which take two values, are included in the regression models as dependent
variables. Binary choice models reveal the relation between the characteristics of a decision
unit and the possibility of making a certain choice (zer, 2004: 61). Among the choice
models, the logit model, which is the most commonly used one, was preferred in this study.
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The logit model, which ensures that the probability remains between 0 and 1 and
which is nonlinear in terms of coefficients, relies on the following logistic cumulative
distribution function:
The estimation of this model was made through the maximum likelihood method.
4. EMPIRICAL FINDINGS
The frequency table showing the socio-demographic characteristics of the students
taking part in the questionnaire is provided below:
Table 2: Frequency Distribution
Frequency Percent Cumulative Percent
Gender
Female 36 43.4 43.4
Male 47 56.6 100.0
Occupation of the Mother
Public sector 7 8.4 8.4
Private sector 17 20.5 28.9
Self-employed 2 2.4 31.3
Unemployed 57 68.7 100.0
Occupation of the Father
Public sector 16 19.3 19.3
Private sector 25 30.1 49.4
Self-employed 32 38.6 88.0
Unemployed 10 12.0 100.0
Income Status of the Family (TRY)
1-2000 21 25.3 25.3
2001-4000 30 36.1 61.4
4001-6000 17 20.5 81.9
6001 and above 15 18.1 100.0
Have You Worked in a Job During Your
Education in the Faculty
Yes 57.0 68.7 68.7
No 26.0 31.3 100.0
Do You Have a First-Degree Relative
That Have Established His / Her Own
Business
Yes 51 61.4 61.4
No 32 38.6 100.0
Does the Faculty Education Have a
Role in Encouraging You to Be An
Entrepreneur
Yes 71 85.5 85.5
No 12 14.5 100.0
As shown in Table 2, 43.4% of the respondents were female, and 56.6% were male.
The percentage of self-employed mothers was 2.4 while the same percentage was 38.6 for
fathers. The families of the 36.1% of the students had an income between 2001 and 4000
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The Effect of Entrepreneurship Education on Entrepreneurial Intentions of University Students in Turkey
TRY, and 18.1% had an income above 6000 TRY. 68.7% of the students had worked in a job
during their faculty education. 61.4% of the students had a first-degree relative that had
established his/her own business. Besides, 85.5% of the students stated that the faculty
education played a role in encouraging them towards entrepreneurship.
The factors affecting the entrepreneurial intentions of the respondents were analyzed
through the logit model. The most appropriate model that was found significant is presented
below.
Table 3: Logit Analysis Results
Logistic regression Number of obs = 83
LR chi2(2) = 55.68
Prob > chi2 = 0.0000
Log likelihood = -29.394724 Pseudo R2 = 0.4864
var12 Coef. Std. Err. z P>|z|
var13 0.16521 0.034964 4.73 0.000
var15 1.603556 0.685961 2.34 0.019
cons -12.1529 2.497964 -4.87 0.000
In the logit model in which the dependent variable was entrepreneurial intention (var12),
the variables of entrepreneurship exam score (var 13) and the status of having a self-employed
father (var15) were found to be statistically significant. Besides, the direction of the relation is
positive. According to the results of the LR Test, the coefficients of the model are significant, as
indicated in Table 3. The other variables used in the questionnaire (gender, occupation of the
mother, income status, status of having worked in a job during the faculty education, status of
having a first-degree relative that have established his/her own business) were also included in
the model; however, these factors were excluded from the model since they were not found to be
statistically significant. The marginal effects used for measuring the size of the relation are
provided in Table 4.
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Table 4: Marginal Effects After Logit
Variable dy/dx Std. Err. z P>|z|
var13 0.040897 0.00878 4.66 0.000
var15 0.38069 0.14673 2.59 0.009
According to Table 4, a 1% increase in the entrepreneurship exam score increases the
likelihood of having entrepreneurial intentions by 4%. And having a self-employed father
increases the likelihood of having entrepreneurial intentions by 38%.
5. CONCLUSION
The entrepreneurial potential of university students and a profile of entrepreneurial
students are quite important for achieving an entrepreneurial society. Therefore, there is a
clear need for the regulation of entrepreneurship education and training practices. The priority
of the entrepreneurship education should be the development of entrepreneurial attitudes,
skills and behavior. In this respect, the development of the current entrepreneurial potential of
Turkey is possible, above all, through a quality system of education.
It is quite important that university students be interested in entrepreneurship as a
career option, that they adopt entrepreneurship with their hearts and minds, and that
entrepreneurship courses be provided on the basis of the principle of developing their self-
efficacy. The study found a significant positive relation between entrepreneurship education
and entrepreneurial intention, confirming the important role played by such entrepreneurship
education on entrepreneurial intention.
In addition, it was revealed that the students with self-employed fathers had higher
entrepreneurial intentions than the others did. This result is also important in that it shows the
role-model position of the father in our national culture.
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The Effect of Entrepreneurship Education on Entrepreneurial Intentions of University Students in Turkey
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