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Journal ofManagerialPsychology11,3

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Testing hypotheses ofentrepreneurial characteristics

A study of Hong Kong MBA students

Hian Chye KohSchool of Accountancy and Business, Nanyang Technological University,

Singapore

IntroductionThe last decade has seen a strong current of renewed interest inentrepreneurship research and practice. This entrepreneurial revolution is likelyto be sustained into the next decade, helped by the opening up of China andVietnam, the collapse of the communist bloc in Europe and Soviet Russia, andworldwide recession and high unemployment rates in the 1990s. These events,among others, have put entrepreneurship in the limelight. In fact, theentrepreneurial energy being devoted to entrepreneurship is a phenomenon inand of itself.

Besides the very rapid growth of both the professional and academicentrepreneurship literature and entrepreneurial ventures worldwide, perhapsthe most obvious evidence of this resurgent interest is the emergence ofuniversity courses on entrepreneurship. In 1993, over 400 colleges anduniversities in the USA offered courses in entrepreneurship education[1]. This isa significant increase from the late 1960s when only a handful of universitiesmade formal entrepreneurship training available[2]. In addition, majorinternational organizations, including the United Nations, are involved inentrepreneurship development and several countries have encouragedentrepreneurship among their people. For example, the Government ofSingapore has identified entrepreneurship as one of the most significant factors(if not the most significant) in the process of growth and development of itsnational economy[3]. Entrepreneurial efforts in South Africa, India, Europe,Russia, Ireland, Australia and other countries have been documented in theliterature (see, for example, [4-6]).

Given the growing importance of entrepreneurship, there is practical value inbeing able to identify entrepreneurial characteristics. The objective of this studyis to test hypotheses of entrepreneurial characteristics. In so doing, the studyattempts to distinguish between those who are entrepreneurially inclined andthose who are not on the basis of psychological characteristics. Knowledge of thefactors associated with entrepreneurial inclination can have practicalsignificance. For example, it can be used as a career guidance tool for students oras a device for screening entrants into an entrepreneurship programme. Inaddition, such knowledge can serve as inputs to entrepreneurship curriculum[1].

Journal of Managerial Psychology,Vol. 11 No. 3, 1996, pp. 12-25.MCBUniversity Press, 0268-3946

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This paper comprises four major sections. The first section reviews theliterature and develops the research hypotheses for the study. The second sectiondiscusses the research methodology employed and the third section presents theresults and implications. Finally, the fourth section summarizes the findings,discusses the limitations of the study and suggests directions for future research.

Literature review and development of hypothesesDespite the substantial interest and research in entrepreneurship and entre-preneurs, defining and understanding entrepreneurship and entrepreneursremain difficult and challenging[7]. Essentially, there is very little consensus onwhat entrepreneurship is and what an entrepreneur does. From a survey of the

entrepreneurship literature, Cunningham and Lischeron[8] have identified sixdifferent major schools of thought. The great person school views anentrepreneur as a person who is born with intuition, vigour, energy, persistenceand self-esteem, while the classical school identifies entrepreneurship withinnovation, creativity and discovery. The management school describes anentrepreneur as one who organizes, owns, manages and assumes risk. In asimilar manner, the leadership school views an entrepreneur as one whomotivates, directs and leads. In contrast, the intrapreneurship school focuses onskilful managers within complex organizations.This study adopts the psychological characteristics school of entrepreneur-

ship, which views entrepreneurs as individuals with unique values, attitudesand needs which drive them and differentiate them from non-entrepreneurs. Its

premise is that ones needs, drives, attitudes, beliefs and values are primarydeterminants of behaviour. As such, this school of thought focuses onpersonality/psychological factors and characteristics. Lachman[9], for example,suggested that people who possess the same characteristics as entrepreneurswill have a higher tendency (or potential) to perform entrepreneurial acts thanpeople who do not possess such characteristics. Also, Mitton[7] has describedentrepreneurs as those who have certain psychological characteristics such as atotal commitment to their cause, a need for total control, a utilitarian view ofwhat is right and a liking for uncertainty and challenge.

As noted by Churchill and Lewis[10], within the field of entrepreneurshipresearch, more empirical studies involving characteristics of entrepreneurs havebeen conducted than have almost any other kind. Similarly, Herron andRobinson[11] reported that studies of various entrepreneurial characteristicshave been conducted over the years with great frequency. This is not surprisingand, in fact, should be expected, given that an understanding of psychologicalcharacteristics that are unique to entrepreneurs (vis--visnon-entrepreneurs) is alogical first step in studying entrepreneurship[12]. The main psychologicalcharacteristics associated with entrepreneurship in the literature (i.e. need forachievement, locus of control, propensity to take risk, tolerance of ambiguity,self-confidence and innovativeness) and the hypotheses relating to them arediscussed next. These characteristics are included in the study because they arethe most frequently enumerated as entrepreneurial characteristics. For example,

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in analysing the entrepreneurial process, Bygrave[13] presented a model thatincludes need for achievement, internal locus of control, tolerance for ambiguityand risk-taking propensity as vital components. Similarly, Robinson et al.[14]have listed achievement, innovativeness, control and self-confidence asentrepreneurial attitudes. To date, need for achievement and locus of controlhave received the most attention in the entrepreneurship literature[15].

Need for achievementMcClellands[16] theory that need for achievement is a strong psychologicaldriving force behind human action has been long proposed as a factorinfluencing entrepreneurial behaviour. It is believed that individuals with a high

need for achievement have a strong desire to be successful and are consequentlymore likely to behave entrepreneurially. Of all the psychological characteristicspresumed to be associated with entrepreneurship, need for achievement has thelongest history[15]. Further, evidence indicating significant association betweenneed for achievement and entrepreneurship have been widely documented in theliterature. For example, Johnson[17] reported that, despite variability amongstudies regarding samples and the operationalization of the need forachievement, a fairly consistent relationship between need for achievement andentrepreneurship can be found in 20 out of 23 major studies in theentrepreneurship literature. Recent studies have also reported thatentrepreneurs have higher need for achievement as compared to non-entrepreneurs (see, for example, [14,18]). Based on the need for achievementtheory and the previous research findings that entrepreneurs are high achievers,this study postulates the following null hypothesis:

H1:Individuals who are entrepreneurially inclined and those who are nothave the same level of the need for achievement.

Locus of controlLocus of control represents an individuals perceptions about the rewards andpunishments in his/her life[19]. While individuals with an internal locus ofcontrol believe that they are able to control lifes events, individuals with anexternal locus of control believe that lifes events are the result of externalfactors, such as chance, luck or fate. Rotter[20] hypothesized that those with aninternal locus of control would more likely strive for achievement compared withthose with an external locus of control. Brockhaus and Horwitz[21] suggested

further that locus of control could distinguish entrepreneurs who are successfulfrom those who are unsuccessful. Generally, it is believed that entrepreneursprefer to take and hold unmistakable command instead of leaving things toexternal factors[7]. Empirical findings that internal locus of control is anentrepreneurial characteristic has been reported in the literature (see, forexample, [12,14]). Given the above, another null hypothesis tested in this study isas follows:

H2:Individuals who are entrepreneurially inclined and those who are nothave the same locus of control.

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Propensity to take riskA persons risk-taking propensity can be defined as his/her orientation towardstaking chances in uncertain decision-making contexts. Mill[22] suggested thatrisk bearing is the key factor in distinguishing entrepreneurs from managers,and others have suggested that the entrepreneurial function primarily involvesrisk measurement and risk taking (see, for example, [23-25]). It is believed thatentrepreneurs prefer to take moderate risks in situations where they have somedegree of control or skill in realizing a profit. Much of the entrepreneurshipliterature includes risk taking as a major entrepreneurial characteristic (e.g.[8,12]). Accordingly, the third null hypothesis tested in this study is:

H3:Individuals who are entrepreneurially inclined and those who are nothave the same level of risk-taking propensity.

Tolerance of ambiguityWhen there is insufficient information to structure a situation, an ambiguoussituation is said to exist. The manner in which a person perceives an ambiguoussituation and organizes the available information to approach it reflects his/hertolerance of ambiguity. A person who has a high tolerance of ambiguity is onewho finds ambiguous situations challenging and who strives to overcomeunstable and unpredictable situations in order to perform well. Entrepreneurs donot only operate in an uncertain environment; according to Mitton[7],entrepreneurs eagerly undertake the unknown and willingly seek out and

manage uncertainty. Thus, it is believed that tolerance of ambiguity is anentrepreneurial characteristic and those who are entrepreneurially inclined areexpected to display more tolerance of ambiguity than others[26,27]. Hence, thefollowing null hypothesis is also tested in the study:

H4:Individuals who are entrepreneurially inclined and those who are nothave the same level of ambiguity tolerance.

Self-confidenceGiven the general notion of an entrepreneur as one who prefers to go into his/herown business, it can be expected that an entrepreneur must believe that he/she isable to achieve the goals that are set. In other words, an entrepreneur is expectedto have a perceived sense of self-esteem and competence in conjunction with

his/her business affairs[14]. Ho and Koh[12] have suggested that self-confidenceis a necessary entrepreneurial characteristic and that it is related to otherpsychological characteristics, such as internal locus of control, propensity totake risk and tolerance of ambiguity. Empirical studies in the entrepreneurshipliterature have found entrepreneurs to have a higher degree of self-confidencerelative to non-entrepreneurs (see, for example, [12-14]). Therefore, another nullhypothesis tested in the study can be stated as follows:

H5:Individuals who are entrepreneurially inclined and those who are nothave the same level of self-confidence.

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InnovativenessInnovativeness relates to perceiving and acting on business activities in new andunique ways[14]. It is one of the recurring themes in defining entrepreneurship(see, for example, [8,28,29]). As suggested by Schumpeter[30] and Mitton[7],innovativeness is the focal point of entrepreneurship and an essentialentrepreneurial characteristic. Evidence reported in the entrepreneurshipliterature shows that entrepreneurs are significantly more innovative than non-entrepreneurs (see, for example, [12,14,18]). The close relationship betweeninnovativeness and entrepreneurship has also been discussed in the professionalliterature, with examples of innovators-entrepreneurs, such as Edwin Land(founder of Polaroid Corporation) and An Wang (founder of Wang Laboratories).Given the above, the last null hypothesis tested in this study is:

H6:Individuals who are entrepreneurially inclined and those who are nothave the same level of innovativeness.

Research methodologyFrom the literature review, it can be seen that theoretical and empirical researchin the academic and professional entrepreneurship literature has associatedpsychological characteristics with entrepreneurship. In particular, evidenceshows that as compared to non-entrepreneurs, entrepreneurs have greater needfor achievement, more internal locus of control, higher propensity to take risk,greater tolerance of ambiguity, more self-confidence and greater innovativeness.

The objective of the study is to investigate if these psychological characteristicscan adequately distinguish between those who are entrepreneurially inclinedand those who are not (i.e. whether entrepreneurs and non-entrepreneurs havesystematically different psychological characteristics). The followingmethodology is employed in the study.

Research framework and variables selectionThe research framework used in the study is adapted from the entrepreneurshipmodel proposed by Martin[31] and Gartner[32] (see also, [33]). The modelsuggests, among other things, that certain entrepreneurial characteristicspredispose entrepreneurs towards entrepreneurial activities and thesecharacteristics make them different from non-entrepreneurs. The research

framework employed in the study is presented in Figure 1. The variables selectedfor investigation are reflected in the null hypotheses developed in the previoussection (see also Figure 1). In particular, the independent variables included inthe study are the need for achievement, locus of control, propensity to take risk,tolerance for ambiguity, self-confidence and innovativeness. The justification forselecting these variables has been discussed in the literature review section andhence is not repeated here. The dependent variable in the study isentrepreneurial inclination. (Operational definitions of the variables arediscussed under questionnaire development.)

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Population of interest and sample selectionThis study is conducted on a sample of MBA students in Hong Kong. Hong Kong

is considered an interesting and appropriate place to conduct entrepreneurshipstudies because of its highly regarded and reputed entrepreneurial spirit andsuccess. In this respect, Siu and Martin[34] concluded from an analysis of HongKong that economic factors (e.g. free open market and voluntary exchange), non-economic factors (e.g. blocked upward mobility in political channels in thecolonial environment) and psychological factors (e.g. the Chinese culture, valuesand perspectives) have contributed significantly to successful entrepreneurshipin Hong Kong. In addition, MBA students comprise an interesting andappropriate population to study because of their unique characteristics.Generally, MBA students have completed their first degree successfully and theyenrol in MBA programmes in order to acquire more managerial knowledge andskills. Also, they are mostly adults with working experience who are at a stage

of their lives where their entrepreneurial inclinations and ambitions (if any) areclear and can be made operative. MBA students who are entrepreneuriallyinclined are likely to enrol in MBA programmes to prepare themselves forentrepreneurial activities while MBA students who are not entrepreneuriallyinclined are likely to enrol in MBA programmes to improve their careerprospects as managers in organizations.

For the study, the population of interest comprises MBA students in HongKong. The sample for the study is drawn randomly from MBA students in theHong Kong University of Science and Technology. A research questionnaire was

Figure 1.Research framework

1. Need for achievement (H1)

2. Locus of control (H2)

3. Propensity to take risk (H3)

4. Tolerance of ambiguity (H4)

5. Self-confidence (H5)

6. Innovations (H6)

Psychological characteristics

1. Entrepreneurially inclined

2. Non-entrepreneurially inclined

Entrepreneurial inclination

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administered to 100 MBA students in mid-September 1993, and a total of 54usable responses were received by the end of September 1993. This yields ausable response rate of 54 per cent.

Questionnaire developmentThe survey instrument used in the study is a self-administered, fixed-alternativequestionnaire. Fixed-alternative questions are used to facilitate ease of scoring toensure a high response rate. Such format also facilitates the coding and analysisof data. The questionnaire comprises two major sections. The first sectionmeasures the six psychological characteristics specified in the six hypotheses;namely, need for achievement (six items), locus of control (seven items),

propensity to take risk (six items), tolerance of ambiguity (six items), self-confidence (six items), and innovativeness (five items). This section consists of 36statements taken primarily from the entrepreneurial self-assessment scale[35].Respondents are asked to indicate their degree of agreement or disagreementwith each statement on a five-point Likert scale, from strongly agree to stronglydisagree. Some statements are reverse-scored and intermingled with otherstatements to minimize response-set bias and the halo effect. Previousresearchers have reported high internal reliability for these measures (see, forexample, [12]). For each of the six psychological characteristics, a higher scoreindicates a greater need for achievement, more internal locus of control, higherpropensity to take risk, greater tolerance of ambiguity, more self-confidence orgreater innovativeness.

The second section measures entrepreneurial inclination as well as selecteddemographic and family variables. To measure entrepreneurial inclination,respondents are asked to indicate their probability of starting a business in thenext three years or so. Respondents who have a high or very high probability ofstarting a business are classified as entrepreneurially inclined; the others (i.e.those with a low probability of starting a business over the next three years orso) are classified as non-entrepreneurially inclined. That is, entrepreneurialinclination is measured as a dichotomous variable. This measurement isconsistent with the definition of an entrepreneur as one who favours self-employment or going into a business of his/her own[12,36].

Demographic and family information are also collected in the second sectionto develop a profile of the sample and verify that the two subgroups ofentrepreneurially and non-entrepreneurially inclined are homogeneous withrespect to demographic or family characteristics. This helps ensure that theresults are not confounded by extrageneous factors. For this purpose, questionson sex, age, marital status, number of siblings, birth order and entrepreneurialinclination of family members (i.e. whether the family owns a business) areasked in section two of the questionnaire. Incidentally, these demographic andfamily factors have also been associated with entrepreneurship in the literature(see, for example, [37,38]). Before administering, the questionnaire is pilot-testedon a small sample and minor revisions are made to improve its readability andformat.

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Statistical methodsDescriptive statistics (e.g. means, standard deviations and frequencydistributions) are computed to develop a profile of the sample. To verify that theentrepreneurially inclined and non-entrepreneurially inclined in the sample arehomogeneous with respect to selected demographic and family characteristics,2tests of independence are conducted on entrepreneurial inclination and sex,age, marital status, number of siblings, birth order and entrepreneurialinclination of family members. To analyse the data and test the six nullhypotheses specified in the study, both univariate and multivariate tests areconducted. At the univariate level,t-tests of significant differences are performedto investigate if respondents who are entrepreneurially inclined and those who

are not differ significantly on the six psychological characteristics, one at a time.At the multivariate level, logit analysis is performed to test the associationbetween the six psychological characteristics and entrepreneurial inclinationsimultaneously.

Results and implicationsAs mentioned earlier, 54 usable responses were returned from a random sampleof 100 MBA students in the Hong Kong University of Science and Technology,yielding a response rate of 54 per cent. Of the 54 respondents, 22 (i.e. 40.74 percent) were found to be entrepreneurially inclined and 32 (i.e. 59.26 per cent) non-entrepreneurially inclined. Descriptive statistics of the variables are presented in

Table I for the total sample as well as the two subgroups of entrepreneurially and

non-entrepreneurially inclined separately. As can be seen, among therespondents 40 (74.07 per cent) are males, 31 (57.41 per cent) are below 30 yearsof age, 41 (75.93 per cent) are single, 24 (44.44 per cent) have less than twosiblings, 36 (66.67 per cent) are the eldest child, and 26 (48.15 per cent) come fromentrepreneurially inclined families.

As for the six psychological characteristics, the mean score ranges from 2.94for tolerance of ambiguity to 3.67 for innovativeness. The mid-point of each ofthe six scales is three on a five-point Likert scale, which ranges from one to five.At a significance level of 0.05, all the psychological characteristics aresignificantly above the mid-point of three with p-values of 0.0001, except fortolerance of ambiguity (p-value = 0.4259).

Results of univariate testsThe objective of this study is to test hypotheses of entrepreneurial charac-teristics. To ensure that the results are not confounded by systematic differencesof other extrageneous factors, 2 tests of independence are performed toinvestigate if significant differences with respect to demographic and familycharacteristics (i.e. sex, age, marital status, number of siblings, birth order andentrepreneurial inclination of family) exist between the two subgroups ofrespondents (i.e. those who are entrepreneurially inclined and those who are non-entrepreneurially inclined). The results are reported in Tables II and III. Asshown, at a significance level of 0.05, none of the demographic and family factors

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investigated is significantly different between the two subgroups. The mostsignificant factor is sex, with ap-value of 0.088. Accordingly, the two subgroupsof entrepreneurially inclined and non-entrepreneurially inclined respondents can

Variable Df 2value p-value

Sex 1 2.920 0.088

Age 1 0.043 0.836

Marital status 1 0.037 0.848

Number of siblings 1 1.534 0.215

Birth order 1 2.455 0.117

Family entrepreneurial inclination 1 0.051 0.821


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InclinationVariable Total sample Non-entrepreneur Entrepreneur

Means (standard deviations)

Need for achievement (H1) 3.52 (0.49) 3.46 (0.52) 3.61 (0.44)Locus of control (H2) 3.31 (0.46) 3.28 (0.42) 3.36 (0.53)Propensity to take risk (H3) 3.35 (0.44) 3.18 (0.46) 3.61 (0.23)

Tolerance of ambiguity (H4) 2.94 (0.51) 2.80 (0.46) 3.17 (0.50)Self-confidence (H5) 3.40 (0.41) 3.33 (0.45) 3.52 (0.32)Innovativeness (H6) 3.67 (0.50) 3.41 (0.41) 4.05 (0.33)

Frequency distributionSexMale 40 (74.07%) 21 (65.63%) 19 (86.36%)Female 14 (25.93%) 11 (34.38%) 3 (13.64%)

Age

Below 30 years 31 (57.41%) 18 (56.25%) 13 (59.09%)30 years and above 23 (42.59%) 14 (43.75%) 9 (40.91%)

Marital status

Single 41 (75.93%) 24 (75.00%) 17 (77.27%)Married 13 (24.07%) 8 (25.00%) 5 (22.73%)

Number of siblings

Less than two 24 (44.44%) 12 (37.50%) 12 (54.55%)Two or more 30 (55.56%) 20 (62.50%) 10 (45.45%)

Birth orderFirst born 36 (66.67%) 24 (75.00%) 12 (54.55%)Others 18 (33.33%) 8 (25.00%) 10 (45.45%)

Family

Entrepreneur 26 (48.15%) 15 (46.88%) 11 (50.00%)Non-entrepreneur 28 (51.85%) 17 (53.13%) 11 (50.00%)

Table I.Descriptive statisticsof samplesand variables

Table II.Results of univariatetests 2 tests ofindependence

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be considered homogeneous with respect to sex, age, marital status, the numberof siblings, birth order and family entrepreneurial inclination.

Given the results, it is possible to test if entrepreneurial inclination issignificantly associated with the six psychological characteristics identified inthe study without the confounding effects of demographic and family variables.

The mean scores shown in Table I are consistent with expectations reflected inthe hypotheses and indicate that those who are entrepreneurially inclined havegreater need for achievement, more internal locus of control, higher propensityto take risk, greater tolerance of ambiguity, more self-confidence and greaterinnovativeness. To investigate the differences statistically at the univariate level,t-tests of significance differences are conducted. At a 0.05 significance level, the

results in Tables II and III show that those who are entrepreneurially inclinedhave significantly higher propensity to take risk (p = 0.0001), greaterinnovativeness (p= 0.0001), and greater tolerance of ambiguity (p= 0.0066).Self-confidence has a p-value of 0.0991. The remaining two psychologicalcharacteristics, need for achievement and locus of control, are not significant ata 0.10 significance level.

Results of multivariate analysisTo investigate the entrepreneurial characteristics further in a multivariate setting,logit analysis is performed. The dependent variable is entrepreneurial inclinationand the independent variables are the six psychological characteristics. The logitanalysis results are summarized in Tables IV and V. As shown, the logit modelhas ap-value of 0.0001, indicating a good fit. The results of logit analysis are con-sistent with those of thet-tests in that at a 0.05 level of significance, innovative-

ness (p= 0.0041), tolerance of ambiguity (p= 0.0157), and propensity to take risk(p= 0.0195) are statistically significant. The negative coefficients indicate thatthose who are entrepreneurially inclined have greater innovativeness, more toler-ance of ambiguity and higher propensity to take risk. The other psychologicalcharacteristics are not significant at a 0.05 or 0.10 level of significance.The holdout accuracy rates of the logit model (computed using a jack-knife

approach) are also presented in Tables IV and V. As can be seen, the accuracyrate for entrepreneurially inclined is 86.36 per cent, while the accuracy rate fornon-entrepreneurially inclined is 87.50 per cent. The overall accuracy rate of the

Variable N t-value p-value

Need for achievement (H1) 52 1.0489 0.2991

Locus of control (H2) 52 0.6717 0.5047

Propensity to take risk (H3) 52 4.4289 0.0001

Tolerance of ambiguity (H4) 52 2.8317 0.0066

Self-confidence (H5) 52 1.6791 0.0991

Innovativeness (H6) 52 6.1337 0.0001

Table III.Results of univariate

tests t-tests ofsignificant differences

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model is 87.04 per cent. In other words, the six psychological characteristics canclassify entrepreneurial inclination with an overall holdout accuracy rate of87.04 per cent. These accuracy rates can be considered high. Using only need forachievement, self-confidence, locus of control and innovativeness, Robinsonetal.[14] constructed a model that predicts entrepreneurial inclination with anoverall in-sampleaccuracy rate of 77 per cent. (The overall in-sample accuracyrate of this study is 88.89 per cent.)

Findings and implicationsThe results show that the null hypotheses for propensity to take risk (H3),tolerance of ambiguity (H4) and innovativeness (H6) can be rejected at a 0.05level of significance. As expected, those who are entrepreneurially inclined havea higher propensity to take risk, more tolerance of ambiguity and greaterinnovativeness. Collectively, the six psychological characteristics can distinguishbetween those who are entrepreneurially inclined and those who are not at anoverall holdout accuracy rate of 87.04 per cent, which can be consideredadequate. Thus, the findings support the psychological characteristics school ofentrepreneurship (see [8]) and are consistent with the entrepreneurship modelsuggested by Martin[31] and Gartner[32]. The findings are also consistent withprevious findings reported in the entrepreneurship literature.

Given the growing importance of entrepreneurship, there is practical value inbeing able to identify entrepreneurial characteristics and to distinguish between

Variable Df Coefficient 2 p-value

Intercept 1 39.2521 7.3652 0.0066

Need for achievement (H1) 1 0.9427 1.2332 0.2668

Locus of control (H2) 1 1.7614 2.3458 0.1256

Propensity to take risk (H3) 1 3.8920 5.4559 0.0195

Tolerance of ambiguity (H4) 1 3.9388 5.8387 0.0157

Self-confidence (H5) 1 0.2045 0.0350 0.8515

Innovativeness (H6) 1 6.4421 8.2208 0.0041

Model (2 Log L) 49.2550 0.0001

Table IV.Results of multivariateanalysis logitanalysis results

Predicted inclinationActual inclination Entrepreneur Non-entrepreneur Total

Entrepreneur 19 (86.36%) 3 (13.64%) 22

Non-entrepreneur 4 (12.50%) 28 (87.50%) 32

Total 23 31 54

Overall accuracy rate 87.04%

Table V.Results of multivariateanalysis holdoutaccuracy rates

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those who are entrepreneurially inclined and those who are not. In particular,with knowledge of the factors (i.e. psychological characteristics) associated withentrepreneurial inclination, programmes can be initiated (for example, bygovernments) to develop and enhance these factors in order to encourageentrepreneurship. This may be desirable, since entrepreneurship can contributesignificantly to the economy of a country. Further, the findings can be used as acareer guidance tool for students or as a device for screening entrants into anentrepreneurship programme. By knowing their entrepreneurial inclination,students can make better and more informed career choices. Further, bydistinguishing between the entrepreneurially inclined and the non-entrepreneurially inclined, institutions offering entrepreneurship programmes

can make better selection of entrants into their programmes. In addition, thefindings can serve as inputs into entrepreneurship education. Previous researchhas suggested that psychological characteristics can be learnt or changed[39,40]. In Hood and Young[1], leading entrepreneurs and chief executive officersemphasized the importance of teaching psychological characteristics inentrepreneurship education to train successful entrepreneurs.

ConclusionThe objective of this study is to test hypotheses of entrepreneurial character-istics. In particular, the study investigates if entrepreneurial inclination issignificantly associated with the psychological characteristics of need forachievement, locus of control, propensity to take risk, tolerance of ambiguity,

self-confidence and innovativeness.T-test results and logit analysis at a 0.05level of significance indicate that those who are entrepreneurially inclined havegreater innovativeness, more tolerance of ambiguity and higher propensity totake risk, as compared to those who are not entrepreneurially inclined. The logitmodel has an overall holdout accuracy rate of 87.04 per cent.

In interpreting the results of the study, a few limitations should be borne inmind. First, the study employs a self-report questionnaire. Thus, the possibilityof response bias and non-response bias exists. The latter, however, is mitigatedby the high response rate of 54 per cent. Second, the study focuses only on MBAstudents in Hong Kong (in particular, in the Hong Kong University of Scienceand Technology). Although the sample comes from a population that isconsidered interesting and appropriate for investigating entrepreneurialcharacteristics, the external validity of the findings may be limited. In otherwords, other populations (e.g. non-MBA students or MBA students in othercountries) may yield findings that are different from those reported in the study.

Third, no conclusion on the causal relationship between psychologicalcharacteristics and entrepreneurial inclination can be inferred; only associationsare addressed in the study.The limitations highlighted above also suggest possible directions for future

research. In particular, future research can investigate the relationship betweenpsychological characteristics and entrepreneurial inclination in a more completeresearch framework that includes other factors, such as financial, family and

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environmental support, precipitating events, pull-and-push factors,demonstration effects etc. (see [32]). Further, casual analysis can be attemptedin future research to investigate relationships leading to the entrepreneurialdecision. In this respect, it is interesting also to study factors associated with orleading to entrepreneurial success in addition to entrepreneurial inclination.

With its strong current of renewed interest, entrepreneurship is set to be aneven more important area for academic and professional research in the future.

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