Community social capital and entrepreneurship: analyzing the links

Abstract

This study examines the effects of community social capital on entrepreneurial intentions (EIs) in rural communities in a developing country. Entrepreneurship, in the form of business start-ups, is widely recognized as an integral component of local economic development programs designed to address poverty and limited livelihood opportunities, especially among poor and marginalized communities in rural areas in developing countries. Using a survey of 496 individuals residing in five rural communities in the Philippines, and drawing from the theory of planned behavior and social capital theory, we examine the direct and indirect effects of community social capital (CSC) on an individual’s EIs. The findings show that CSC largely influences EI by shaping an individual’s perceived self-efficacy (PSE) to engage in entrepreneurship, perceived desirability of entrepreneurship (PDE), and perceived social norms toward entrepreneurship (PSNE). High levels of PSE, PDE, and PSNE have a positive influence on an individual’s EI. These findings offer more nuanced explanations of how social capital within a community can facilitate entrepreneurship as a means of community economic development. Implications of the findings and areas for future research are discussed.