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The central purpose of this study is to investigate the relative effects of leadership styles, i.e. transactional leadership and transformational leadership, and achievement motivation on the entrepreneurial potential of MBA and engineering students. This study also examines whether the MBA and engineering students differ in terms of their entrepreneurial potential.

This study has used a cross-sectional research design along with a quasi-experimental research method to investigate the study's objectives on a sample consisting of 952 engineering and business students. The study has also used the PLS-SEM approach to carry out the data analysis, and to evaluate the group differences among MBA and engineering students concerning the relationships investigated, i.e. leadership motivation-entrepreneurial potential, and achievement motivation-entrepreneurial potential.

This research has primarily made four findings. First, the study has found that there are statistically significant differences between students pursuing a business education, and those students who are seeking management education about their entrepreneurial potential. Second, this study demonstrates that leadership and achievement motivation are strongly associated with entrepreneurial potential. Third, this research shows that the achievement motivation-entrepreneurial potential is more substantial among engineering students than among business students. However, the leadership-entrepreneurial potential relationship is more influential among MBA students than among engineering students. Lastly, the effect size of leadership is small in comparison with the effect size of achievement motivation, which is substantially healthy.

This research has attempted to address the riddle of a leadership attribution error in the context of entrepreneurship. Accordingly, this study has demonstrated that the idea of leadership attribution error has empirical evidence in the context of entrepreneurship also. Further, this study has tried to address the “behavior-motive preeminence” dichotomy. The results of this research show that internal motivation is more reliable than external leadership behavior in cultivating the entrepreneurial potential of students.