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20-05-2021 | Research

Exploring the dimensionality of entrepreneurial self-efficacy in entrepreneurs and managers: a cognitive process perspective

Authors: Seán F. Keane, Kathryn T. Cormican, Jerome N. Sheahan

Published in: Journal of Global Entrepreneurship Research

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Abstract

Entrepreneurial self-efficacy (ESE; one’s belief in one’s venturing capabilities) is a key construct in entrepreneurship research. ESE is a mechanism by which domain knowledge and cognitive processes are converted into new ventures. But its dimensionality is not yet fully elucidated. This Irish investigation responds to calls for more research by exploring the dimensionality of ESE using data from 108 entrepreneurs and 63 managers on six cognitive process indicators (identify, select, plan, implement, evaluate, and create), which were assumed to be arranged in ascending order of complexity. Exploratory principal components analyses reduced the six variables to a single dimension, essentially average ESE, for each group separately, and similarly for the pooled sample employing common principal components. The shared (common) dimension described 86.9% of the variance. Evidence indicated that the common model was highly appropriate. In summary, exploratory analyses suggested that ESE is unidimensional when assessed from a cognitive process perspective, that the dimension is shared by entrepreneurs and managers, and that the six cognitive processes do not differ in their complexity. The results are compared with those of other studies. Implications and extensions are discussed.

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Appendix
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Footnotes
1
For instance, as will be reviewed later, the dimensionality of ESE was studied in Chen et al. (1998) from a “domain knowledge” perspective and in McGee et al. (2009) from a “cognitive process” viewpoint. And in both investigations, five common factors of ESE were assumed for entrepreneurs and non-entrepreneurs without testing the basic assumption behind the multi-group procedure.
 
2
Domain knowledge and cognitive processes—that is, knowledge regarding what to do and how to do it—are the building blocks of capabilities (Anderson, 1980; Bloom et al., 1956; Krathwohl, 2002) and, by extension, of domain-specific capability beliefs including ESE (Bandura, 1997).
 
3
Like PCA, exploratory and confirmatory factor analyses are methods of multivariate analysis for interval or ratio variables (Bryant & Yarnold, 1995). Exploratory factor analysis and PCA are mostly used as dimension-reducing techniques, whereas confirmatory factor analysis is usually utilized for purposes of theory testing. Furthermore, exploratory factor analysis can be appropriate if the intention is to identify latent constructs, while PCA is more suitable if the aim is data reduction (Fabrigar et al., 1999).
 
4
The “global scale” in Zhao et al. (2005) contains four ESE items. While Newman et al. (2019) note that that ESE instrument has ”no sub dimensions,” its dimensionality was not investigated in Zhao et al. And the scale surely has at least one underlying dimension. Additionally, the 3-item ESE scale in Schjoedt and Craig (2017) is unidimensional. It is categorized in Newman et al. as an “ad hoc” measure.
 
5
In Chen et al. (1998), the following dimensions of ESE were verified: (1) financial control, (2) innovation, (3) management, (4) marketing, and (5) risk-taking.
 
6
In this case, in McGee et al. (2009), the subject-to-variable ratio was 1.76:1. This seems low compared with the various guidelines in MacCallum et al. (1999). Indeed, Everitt (1975) suggests a minimum ratio of 10:1. However, in practice, a majority of psychology journal articles use a minimum ratio of 5:1 (Osborne & Costello, 2004).
 
7
In McGee et al. (2009), the following factors of ESE were confirmed: (1) implementing-financial, (2) implementing-people, (3) marshaling, (4) planning, and (5) searching.
 
8
As per Flora and Curran (2004), in Chen et al. (1998) and McGee et al. (2009), there was the potential for a serious mismatch between the assumptions underlying the factor model and the nature of the data that were analyzed. In turn, this mismatch undermines trust in the validity of the inferences that were drawn from ESE data as regards the theoretical model of interest.
 
9
In Keane et al. (2018), the two dimensions were interpreted for entrepreneurs as (1) finance and operations and (2) serving products to new and existing customers, and for managers as (1) making products and serving them to existing customers and (2) costs and revenues. The dimensions described 64.7% of the variance for entrepreneurs and 68.3% of the variation for managers.
 
10
The assumption needed for performing common principal components on different groups is that the eigenvector space should be similar for the samples (Hardle & Simar, 2007).
 
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Metadata
Title
Exploring the dimensionality of entrepreneurial self-efficacy in entrepreneurs and managers: a cognitive process perspective
Authors
Seán F. Keane
Kathryn T. Cormican
Jerome N. Sheahan
Publication date
20-05-2021
Publisher
Springer Berlin Heidelberg
Published in
Journal of Global Entrepreneurship Research
Print ISSN: 2228-7566
Electronic ISSN: 2251-7316
DOI
https://doi.org/10.1007/s40497-021-00281-2

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