Formation of entrepreneurial intentions in a regional context

Abstract

Research on the impact of the regional environment in the very early phase of the business start-up process is currently limited. This paper contributes to the literature by analysing the influence of regional factors on the formation of entrepreneurial intentions within the theory of planned behaviour (TPB) framework. The rationale is based on the previous literature which posits that regional conditions have implications for individual perceptions, which, in turn, constitute the foundation of the three antecedents of intention in the TPB model: attitudes, subjective norm and perceived behavioural control. A multilevel analysis based on a random sample of 834 Finnish working-age individuals, combined with the official national statistics at the municipality level supports the proposition that regional conditions have an indirect impact on the intent to become an entrepreneur. The population density, the level of education, income and wealth and the rate of public and manufacturing sector employment of a region are found to moderate the individual formation of entrepreneurial intentions. This study supports further development of the theoretical understanding of entrepreneurial intentions by demonstrating that regional characteristics are important moderating influences in the TPB model.