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Considering business start-up in recession time: The role of risk perception and economic context in shaping the entrepreneurial intent

Ghulam Nabi (Department of Management, Business School, All Saints Campus, Manchester Metropolitan University, Manchester, UK)
Francisco Liñán (Applied Economics I, University of Seville, Seville, Spain)

International Journal of Entrepreneurial Behavior & Research

ISSN: 1355-2554

Article publication date: 23 September 2013

3862

Abstract

Purpose

The purpose of this paper is to examine under-researched psychological and environmental factors related to entrepreneurial motivation and intention. This helps us to explore the links between risk perception (risk as opportunity and risk as threat), economic context (in a recession), entrepreneurial motivation (personal attitudes and perceived behavioral control) and intention for new venture creation.

Design/methodology/approach

A sample of 619 individuals from two European countries, Spain and Great Britain, is studied. A range of control variables have been considered, including demographics, human/social capital and country effects. Structural equation modeling is used to analyze the relationships among the model constructs.

Findings

The structural model broadly holds and adequately fits the data. Entrepreneurial risk perception is strongly linked with entrepreneurial motivation. Entrepreneurial motivation, in turn, is strongly linked with entrepreneurial intention. It suggests, therefore, an indirect effect of risk perception on intentions. Economic context is also linked with risk perception and entrepreneurial intentions.

Research limitations/implications

Results from this exploratory study suggest a role of risk perception in establishing the entrepreneurial intention of individuals. Therefore, greater attention should be paid to this element in entrepreneurship education programs. Similarly, perceptions about the economic (recessionary) environment and its relationship with risk perception also have to be taken into account, with the purpose of letting students understand the possibilities that are present in a recessionary situation.

Originality/value

This is the first time that perceptions about risk and the economic context are tested within the theory of planned behavior.

Keywords

Acknowledgements

The authors would like to thank Professor Ajzen for providing useful insights in the risk-attitude link through personal correspondence.

Citation

Nabi, G. and Liñán, F. (2013), "Considering business start-up in recession time: The role of risk perception and economic context in shaping the entrepreneurial intent", International Journal of Entrepreneurial Behavior & Research, Vol. 19 No. 6, pp. 633-655. https://doi.org/10.1108/IJEBR-10-2012-0107

Publisher

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Emerald Group Publishing Limited

Copyright © 2013, Emerald Group Publishing Limited

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