Entrepreneurship Intentions: The case of Saudi University Students.

Abstract

Research in the area of entrepreneurship and its potential contributions to economic growth and employment has grown a significant momentum and has now become a matter of utmost concern for a large number of academicians and policy-makers. Despite the recent emergence of an immense quantity of research outputs in entrepreneurship in developing economies, there are still several areas which need to be explored and evaluated. In particular, due to financial constraints and general resource limitations, entrepreneurial spirit has not yet fully developed and nurtured in most developing economies. In the case of Saudi Arabia, financing potential entrepreneurs has not necessarily been a major focus, where attitudes and intentions were found to be weak. A report by the World Bank in 2016 showed that Saudi Arabia is ranked as one of the poorest countries in the Arab world in terms of financial literacy among the youth population. Hence this has produced very little propensity to becoming entrepreneurs. In the light of these findings, the current research has made an attempt to identify, explore and evaluate the underlying factors responsible for the current lack of entrepreneurial spirit among the youth population in Saudi Arabia. In particular, the current study is motivated by lack of financial literacy/education, as a main driver for development and nurturing entrepreneurs in the country. In testing this hypothesis, the current research has applied the popular PLS-SEM statistical technique to cases where there are complex interrelationships among factors and constructs. This method is particularly appealing to researchers as it makes no prior assumption about the distributional shapes of the data. Using a large sample size of both Saudi undergraduate and postgraduate students from Economics/Accounting/Management programmes, the research has reported a number of interesting findings. The results show that entrepreneurial attitudes are highly significant in determination of entrepreneurial intentions. In particular, the study finds that financial literacy, as a moderating factor, has been responsible for development of entrepreneurial intentions among Saudi university students. Furthermore, the findings of this study tend to closely tally with the literature relating to entrepreneurial intentions in developing economies.