Innovative Self-concept of Micro-entrepreneurs: Perception of Barriers and Intention to Invest.

AutorVerdugo, Gustavo Alfonso Barrera
CargoChile - Report


Entrepreneurship has been recognized as a relevant activity for economic development, as it encourages self-employment and economic activity (Schumpeter, 1934). Moreover, studies have described entrepreneurial activity as a source of job creation and economic growth (Ovaska & Sobel, 2005; Zacharakis, Shepherd, & Bygrave, 2000).

The recognized effect of entrepreneurship on countries' economic growth has encouraged the development of research to identify factors that favor or hinder it. These factors relate to conditions in the entrepreneurial environment or with internal motivations to perform a different job to that of salaried workers. Two areas of research development in recent years are the study of the perception of barriers to entrepreneurship (Kouriloff, 2000; Lofstrom, Bates, & Parker, 2014; Sarasvathy, 2004) and individual entrepreneur conditions related to a company's results (Hisrich & Brush, 1986; Kozubikova, Belas, Bilan, & Bartos, 2015).

Regarding the study of individual conditions of the entrepreneur, research has mainly analyzed demographic conditions such as gender (Henry, Foss, & Ahl, 2016; Humbert & Drew, 2010; Shinnar, Hsu, & Powell, 2014) and age (Minola, Criaco, & Obschonka, 2016). These demographic variables are easily identifiable, however, they have limited ability to predict behaviors, since people with similar demographic conditions may present different behaviors (Camino & Rua, 2012). As an alternative to the aforementioned demographic variables, in recent years studies of entrepreneurs' psychological variables, such as their personality (Miller, 2015) and personal values have been developed (Fayolle, Linan, & Moriano, 2014). One of the variables that integrates this category is the entrepreneurial self-concept, which consists of an individual's knowledge and belief about themselves at a moment in time (Hamachek, 1990), as Hamachek (1987, p. 10) points out, "it is our private mental image of ourselves, a set of beliefs about the kind of people we are".

Several researches have recognized the impact of entrepreneurial self-concept, self-perception or self-image of entrepreneurship (Krueger & Brazeal, 1994; Rhodes & Butler, 2004; Verheul, Uhlaner, & Thurik, 2005). A term in this area that has received primary attention is self-efficacy, defined as "the self-perception of individual capacities that affect motivation, personal resources and courses of action according to situational demands" (Wood & Bandura, 1989, p. 408).

Despite the recognition of self-concept, especially self-efficacy, with motivation and results of entrepreneurship, there is scant evidence to link innovative self-concept with perceived barriers to entrepreneurship and the intention to invest in new assets, in the context of micro-enterprises in Latin America. In these countries, authors such as Ambrosini and Lopez (2006), Munoz (2011), Valladares and Lajo (2013), Berrios (2015), have studied the influence of self-concept or self-perception in areas such as motivation to start a business and entrepreneurial skills. In a complementary way, Vargas (2007) and Ferrer and Jimenez (2009), analyzed the relevance of entrepreneurial self-efficacy on variables such as intention to develop ventures and life satisfaction.

Specifically, the relationship of innovative self-concept on the perception of particular barriers has not been analyzed in the context of micro-enterprises in Latin America, and the innovative self-concept differs according to its demographic conditions of micro-entrepreneurs. That is, it has not yet been identified as to whether innovative self-appointed entrepreneurs, present differentiated perceptions about difficulties in undertaking and intention to invest and/or if sociodemographic variables such as gender, age and educational level have an impact on their innovative self-concept. Consequently, there is an apparent knowledge gap.

This knowledge would allow us to understand the benefits of current activities implemented for entrepreneurship training. It would also help to design programs directed towards specific groups, since self-concept is a condition that can be intervened through activities such as workshops and coaching. Chile is considered to be a country of interest, as it integrates the emerging Latin American economies (Morgan Stanley Capital International, n.d.) and may represent conditions present in Brazil, Mexico and Colombia, or other countries.

Theoretical Framework

Entrepreneurship and self-concept

From the perspective of the psychological characteristics of the entrepreneur, investigations have studied the relevance of aspects such as personality traits (Brandstatter, 2011; Leutner, Ahmetoglu, Akhtar, & Chamorro-Premuzic, 2014; Miller, 2015), lifestyles (Cederholm, 2015; Dale, 2015) and entrepreneurial self-concept (Poon, Ainuddin, & Juniy, 2006). Entrepreneur self-concept has been studied under different conceptions, using terms such as entrepreneur identity (Akerlof & Kranton, 2000), self-image (Verheul et al., 2005), self-awareness (Connell & Wood, 2005) and self-knowledge (Lans, Biemans, Mulder, & Verstegen, 2010).

For example, Akerlof and Kranton (2000) define the concept of identity as the sense of self in economic analysis and point out that it plays a key role in explaining individual intentions for carrying out entrepreneurship. The relevance of the entrepreneur identity concept has been recognized as a condition that implies stable behaviors in the field of entrepreneurship activities (Dobrev & Barnett, 2005; Milton, 2009). In this area, Hoang and Gimeno (2010) study the relationship between business identity and business persistence and Mitchell and Shepherd (2010) have analyzed the association between the entrepreneur's self-image and decisions about entrepreneurial opportunities.

According to James (1890, 1950), self-concept consists of an empirical self in quote, which is a material, social and spiritual component, and fundamental to the understanding of an individual's experiences. Mitchell and Shepherd (2010) acknowledge the importance of self-perception for entrepreneurs as they must estimate coherence between their self-concept and the business opportunities they identify. In a complementary way, Bird (1995) estimates that self-image affects entrepreneurs' capacities. To explain its relevance under a theoretical foundation, social learning theory (Bandura, 1977, 1986) suggests that there is a triangle of reciprocal causes, including behaviors, cognitions and other environmental factors. This means that the perception of the environment and of oneself affects behavior, and that the behavior of an individual affects the perception of self and of one's environment.

The relationship between entrepreneurial activity and self-concept has been studied mainly from the perspective of self-efficacy (Boyd & Vozikis, 1994; Bullough, Renko, & Myatt, 2014; Hsu, Wiklund, & Cotton, 2017), defined as self-perception of an individual's ability to perform certain tasks (Bandura, 1987) or self-confidence in performance within a self-perceived domain of personal abilities (Wilson, Kickul, & Marlino, 2007). It has been recognized that the self-perception of entrepreneurs' abilities impairs their performance, since it has been estimated that entrepreneurs are successful in activities that they believe to be competitive (Bandura, 1989). It has also been suggested that the motivations of the entrepreneur may depend on their self-efficacy, since self-perception affects affective and behavioral states (Markham, Balkin, & Baron, 2002), as well as individual motivation and persistence when developing ventures (Bandura, 1997).

Previous research evidences differences in performance, motivation and persistence of the entrepreneur, derived from self-perception. Consistent with this evidence, I estimate that there should also be variation in the intention to invest in assets according to the innovative self-concept of micro-entrepreneurs and, thus, I propose the following hypothesis:

Ho: There are differences in intention to invest in entrepreneurships according to the innovative self-concept of micro-entrepreneurs.

Barriers to Entrepreneurship

The study of barriers to entrepreneurship, defined as conditions that hinder or impede entrepreneurship, is relevant (Lien, Lytle, & Komro, 2002), since they help to identify aspects that affect entrepreneurial activity and, in an indirect way, the economic development of countries. It has been recognized that entrepreneurship intentions depend on the perception of barriers to entrepreneurship (Carayannis, Evans, & Hanson, 2003; Luthje & Franke, 2003). In this sense, Krueger (2008) considers that barriers perceived by entrepreneurs moderate their intentions and efforts to develop new businesses.

Regarding classification of barriers to entrepreneurship, Choo and Wong (2006) pose as barriers: lack of capital, lack of skills, high risk, lack of confidence and costs for government regulations. Moreover, Giacomin et al. (2011) define barriers as: lack of support structure and high fiscal and administrative costs, lack of knowledge and experience, economic climate and lack of entrepreneurship skills, lack of confidence and risk aversion. Finally, Donga, Ngirande and Shumba (2016) identify the following barriers: Lack of financing, market access, outdated equipment and technology, and poor infrastructure.

Among those mentioned, lack of financing has been estimated as outstanding (Robertson, Collins, Medeira, & Slater, 2003; Volery, Doss, Mazzarol, & Thein, 1997). In the field of micro-enterprises, Fielden, Davidson and Makin (2000) emphasize lack of funding as a prominent barrier. In addition, Villanger (2015) argues that access to capital and lack of skills and knowledge are significant obstacles for growth. Ahmad (2012) acknowledge the lack of financial support, bureaucracy, lack of credit options and lack of training as major problems.


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