Family support, psychological capital, and start-up formation

Uzoma Ononye,Peter Ofili,Kenneth Chukwujioke Agbim,Francis Ndudi

doi:10.21511/ppm.20(1).2022.28

Uzoma Ononye, Peter Ofili + Show 2 more

Open Access

https://doi.org/10.21511/ppm.20(1).2022.28

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Abstract

The influence of family support and psychological capital (PsyCap) is a topical discourse in entrepreneurship studies due to the unsupportive and turbulent environments most entrepreneurs operate in. However, studies concluding on the nature and direction of family support and PsyCap effects on start-up formation appear scant. This study aims to empirically examine family support effects on start-up formation with psychological capital (PsyCap) as a mediation factor. Specific emphasis was given to extended family support. The study utilized the partial least square (PLS) method for hypotheses testing with cross-sectional data collected from 261 randomly sampled trainees in an entrepreneurship training program organized by the Delta State Ministry of Youth Development. The PLS analysis showed that family support (β = 0.317, p = 0.000) and PsyCap (β = 0.202, p = 0.000) have a significant positive effect on start-up formation. The results proved that family support and PsyCap are valuable antecedent factors for positioning entrepreneurs to engage and thrive productively in the start-up formation process. Furthermore, PsyCap did not mediate the significant positive effect of family support on start-up formation (β = 0.235, p = 0.000; β = 0.103, p = 0.052). This result demonstrates that family support may not be enough for PsyCap to transmit its significant positive effect on start-up formation. Hence, there is a need to procure other alternate support from formal or informal settings.

Highlights

Today, start-up formations in Nigeria are confronted with the problem of resource constraints in a highly uncertain and disruptive economic environment
Values were above the recommended value of .60, and the Bartlett’s test for sphericity (BTS) values were found to be significant at p < 0.005, indicating that the data set is appropriate for confirmatory factor analysis (CFA)
The study proceeded to the two-step procedure for structural equation modeling by testing the measurement model using five quality criteria determined in the study

Summary

Introduction

Start-up formations in Nigeria are confronted with the problem of resource constraints in a highly uncertain and disruptive economic environment. The lack of access to basic start-up capital may partly explain the discrepancies between the increased start-up activities and alarmingly low start-up success rates in Africa, Nigeria in particular (Baluku et al, 2016). This situation has shed more light on family support, which many believe may be a rallying point for entrepreneurs to mobilize critical and strategic resources for creating a new business (Edelman et al, 2016; Manolova et al, 2014; Nurlaily et al, 2018).

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