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  • ENTREPRENEURIAL INTENT OF FINAL-YEAR COMMERCE STUDENTS IN THE

    RURAL PROVINCES OF SOUTH AFRICA

    by

    MMAKGABO JUSTICE MALEBANA

    Submitted in accordance with the requirements for the degree of

    DOCTOR OF COMMERCE

    in the subject

    BUSINESS MANAGEMENT

    at the

    UNIVERSITY OF SOUTH AFRICA

    PROMOTER: PROF E SWANEPOEL

    FEBRUARY 2012

  • ii

    Student number: 33260214

    I declare that Entrepreneurial intent of final-year commerce students in the rural

    provinces of South Africa is my own work and that all the sources that I have used

    or quoted have been indicated and acknowledged by means of complete references.

    ……………………………………… ……………………

    Mr MJ Malebana Date

  • iii

    ACKNOWLEDGEMENTS

    I would like to thank the following individuals and organisations for making this

    research project a success:

     God Almighty for giving me the strength, courage and wisdom to complete this

    study.

     Prof Elana Swanepoel my promoter, for her commitment, support, guidance and

    encouragement.

     National Diploma: Management students, ND: Internal auditing, Cost and

    management accounting and Financial information systems students at Walter

    Sisulu University and Tshwane University of Technology for their willingness to

    participate in this study and complete the questionnaires.

     Mr M. Macutwana, Mr K. Ntupanyama, Mr L. Tshangana, Mrs R. Luzuka, Ms B.

    Mpepo at WSU and Dr I. Swarts, Mr M. Dinga, Mr S. Morethe and Ms A. Blom at

    TUT for granting me the permission to involve their students in this research and

    their valuable time and assistance in distributing and collecting the

    questionnaires.

     The Centre of Business Management at the University of South Africa for funding

    the statistical analysis.

     Dr Kwabena Kyei for his assistance with statistical analysis and data preparation.

     Ms Siya Mchau for her assistance with data capturing.

     Dr Marthi Poll for her valuable time in conducting statistical analysis of the data

    and advice.

     The National Research Foundation and the University of Venda for partial

    funding of this research.

     My wife, Kabatu and daughter, Phuti for their support and understanding.

     Dr K.N. Phalanndwa for language editing.

  • iv

    SUMMARY

    Owing to the fact that entrepreneurship is widely considered to be a mechanism for

    reducing unemployment, the purpose of the study was to assess whether final-year

    Commerce students in the predominantly rural provinces, the Eastern Cape Province

    and the Limpopo Province, have the intention to start their own businesses. The study

    draws heavily from entrepreneurial intent models and focuses on the relationship

    between three key variables, namely, exposure to entrepreneurship education,

    awareness of entrepreneurial support and social capital to establish whether they are

    related to the intention of final-year Commerce students to start their own businesses.

    The literature review concentrated on entrepreneurial intent and entrepreneurial intent

    models; government entrepreneurial support initiatives in South Africa and in other

    countries and their role in the development of entrepreneurial intent, emergence of

    new ventures and the growth of small, medium and micro enterprises (SMMEs);

    entrepreneurship education and its role in enhancing entrepreneurial self-efficacy,

    entrepreneurial competencies and entrepreneurial intent; the influence of social capital

    on entrepreneurial intent and the different stages on the new venture life-cycle; and

    concludes with the link between entrepreneurship and the establishment of SMMEs.

    A survey was conducted among National Diploma (ND): Internal Auditing, Cost and

    Management Accounting and Financial information systems students (IAUD, CMA and

    FIS) (who had six months exposure to entrepreneurship education), ND:

    Entrepreneurship/Small Business Management (E/SBM) (who had three years

    exposure to entrepreneurship education) and ND: Management (without exposure to

    entrepreneurship education). The respondents for the study comprised 355 final-year

    students of which 276 were from Walter Sisulu University in the Eastern Cape

    Province and 79 were from Tshwane University of Technology (Polokwane Campus)

    in the Limpopo Province. Data was analysed using descriptive statistics and

    nonparametric statistics.

    The findings reveal that the majority of the respondents had the intention to start a

    business in the future. The entrepreneurial intent of the ND: E/SBM students was

  • v

    stronger than the entrepreneurial intent of the ND: IAUD, CMA and FIS students and

    ND: Management students. Some significant relationships were found between

    entrepreneurial intent and the key variables of the study.

    Key terms:

    Entrepreneurial intent; Theory of planned behaviour; Shapero and Sokol’s model of

    entrepreneurial event; Entrepreneurial self-efficacy; Exposure to entrepreneurship

    education; Awareness of government entrepreneurial support; Social capital; Model

    of entrepreneurship development; Final-year commerce students; Entrepreneurial

    competencies.

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    TABLE OF CONTENTS

    CHAPTER 1: INTRODUCTION AND BACKGROUND TO THE STUDY

    1.1 Introduction 1

    1.2 The context of the study 2

    1.3 The scope of the study 5

    1.3.1 The relationship between entrepreneurial intent and behaviour-Theory of

    planned behaviour 6

    1.3.2 The role of social capital in entrepreneurship 8

    1.3.3 The role of entrepreneurial support 9

    1.3.4 The relationship between entrepreneurship education and entrepreneurial

    intent 10

    1.4 Problem statement 12

    1.5 Objectives of the research 12

    1.5.1 The primary objective 12

    1.5.2 The secondary objectives 13

    1.5.3 Research hypotheses 13

    1.6 Demarcation of the research study 18

    1.7 Significance of research 18

    1.8 Research methodology 20

    1.8.1 Research design 20

    1.8.2 Population and sampling procedures 20

    1.8.3 Data collection 23

    1.8.3.1 Designing the research instrument 23

    1.8.3.2 Administration of the questionnaires 24

    1.8.4 Data analysis 24

    1.9 Organisation of the study 24

    CHAPTER 2: THEORIES ON ENTREPRENEURIAL INTENT

    2.1 Introduction 27

    2.2 Defining the concept of entrepreneurial intent 27

  • vii

    2.3 Models of entrepreneurial intent 29

    2.3.1 Shapero and Sokol’s model of entrepreneurial event (SEE) 32

    2.3.2 The theory of planned behaviour (TPB) 33

    2.3.2.1 Determinants of intention 35

    2.3.2.2 Beliefs, attitudes, intention and behaviour linkage 38

    2.3.2.3 Views and research in support of Ajzen’s model 39

    2.3.2.4 The theory of planned behaviour applied to entrepreneurship 40

    2.3.3 The model of entrepreneurial potential 42

    2.3.4 Shapero-Krueger model of entrepreneurial intention 43

    2.3.5 Empirical studies testing and applying the SEE and TPB 46

    2.3.5.1 Perceived feasibility and perceived desirability as determinants

    of entrepreneurial intent 46

    2.3.5.2 A model integrating the SEE model and the TPB 49

    2.3.6 Summary 50

    2.4 Factors impacting on entrepreneurial intent models 52

    2.4.1 The relationship between personal and contextual factors and

    entrepreneurial intent 53

    2.4.2 The relationship between self-efficacy and entrepreneurial intent 57

    2.4.3 The relationship between gender and entrepreneurial intent 60

    2.4.4 Role models and their effect on entrepreneurial intent 61

    2.4.5 The influence of culture on entrepreneurial intent 63

    2.4.6 Other factors on entrepreneurial intent and behaviour 64

    2.4.7 The influence of opportunity recognition on entrepreneurial intent

    and behaviour 68

    2.4.8 The role of improvisation in predicting entrepreneurial intent 68

    2.4.9 Summary 70

    2.5 Entrepreneurial motivation and the