International Journal of Entrepreneurial Behavior & Research

The institutional environment and social entrepreneurship intentions

Boris Urban, Leanne Kujinga,
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IJEBR
23,4
638
Received 15 July 2016
Revised 30 September 2016
Accepted 6 November 2016
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International Journal of
Entrepreneurial Behavior &
Research
Vol. 23 No. 4, 2017
pp. 638-655
© Emerald Publishing Limited
1355-2554
DOI 10.1108/IJEBR-07-2016-0218
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1355-2554.htm
The institutional environment and
social entrepreneurship intentions
Boris Urban
WBS, University of the Witwatersrand, Johannesburg-Braamfontein,
South Africa, and
Leanne Kujinga
University of the Witwatersrand, Johannesburg-Braamfontein, South Africa
Abstract
Purpose – To fully understand the concept of social entrepreneurship (SE), contextual factors need to be
accounted as the influence of the institutional environment on individual behaviour has received little
attention in the literature. By heeding the research call for quantitative work in this emerging field,
hypotheses are formulated which predict the influence of different institutional profiles on SE intentions.
The paper aims to discuss these issues.
Design/methodology/approach – A cross-sectional survey design was administered in an under-researched
emerging market context – South Africa. Hypotheses were then statistically tested using correlational analysis
and structural equation modelling.
Findings – The results indicate that the regulatory environment has a positive and significant impact on
feasibility and desirability, and furthermore both feasibility and desirability positively affect intentions.
Originality/value – The study contributes towards a new understanding of the influence of the institutional
environment on social entrepreneurial intentions and its antecedents in an African emerging market context,
and may serve as a catalyst for this emerging and important global activity.
Keywords Social entrepreneurship, Institutions, Intentions
Paper type Research paper
Introduction
Considering the macro-level trends facing the world today, from both the “rethinking
business” and social business perspective, there seems to be a discernible shift towards
re-embedding business activity in deeper social and environmental contexts (Baker, 2011).
Increasingly, researchers are looking beyond businesses as only having an economic
component or Schumpeterian purpose, where entrepreneurs drive innovation and activate
structural changes in an economy, and also recognise a social component (Drayton, 2012).
Several researchers and practitioners are advocating that social enterprises could pave the
way to a more sustainable and fair society, built on the basis of satisfying local needs and
the creation of innovative market-orientated solutions (Harding, 2007; Mair and Marti, 2006;
Nicholls, 2011;Urban, 2015; Weerawardena and Mort, 2006).
Social entrepreneurship (SE) has gained popularity under shifting market conditions and
can be viewed as a process that catalyses social change (Mair and Marti, 2006). Social
entrepreneurs, virtually by definition, are attacking social problems caused by
shortcomings in existing markets and social welfare systems and seek to create systemic
changes and sustainable improvements. They engage in a process of “continuous
innovation, adaptation, and learning; acting boldly without being limited by resources
currently in hand and exhibit heightened accountability to the constituencies served and for
the outcomes created” (Dees and Economy, 2001, p. 5).
Despite the proliferation of studies on SE the term social entrepreneur or SE, in general,
remains a poorly defined construct (Zahra et al., 2009). A critical review of the literature shows
that the concept of SE remains poorly defined and its boundaries to other fields remain unclear
(Mair and Marti, 2006). Conceptual differences are noticeable in the definitions of SE (focus on
process or behaviour), social entrepreneurs (focus on the founder of the initiative), and social
 enterprise (focus on the tangible outcome of SE). Further reflection on the SE academic literature Institutional
shows a number of themes, preoccupations, and domains, where (Weerawardena and environment
Mort, 2006): SE may be expressed in a vast array of economic, educational, welfare, and social and SE
activities; SE may be conceptualised in a number of contexts, such as the public sector,
community, and social action organisations; the role of innovativeness, proactiveness, and risk intentions
taking in SE have been emphasised in distinguishing SE from other forms of community work;
and the SE activity can be seen in the form of a tri-value social enterprises since their revenue 639
sources derive from the non-profit, for-profit, and public sectors (Herranz et al., 2011).
Recently, it has been noted that theoretical embeddedness and social relevance are important
for the legitimacy of SE research (Haugh, 2012; Urban, 2015). Researchers have started to
develop conceptual models incorporating both antecedents and consequences of social
enterprises, where several researchers have adopted a behavioural approach when analysing SE
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by focussing attention on the individual founder (Baierl et al., 2014; Urban, 2008). Across a wide
range of different behaviours, behavioural intentions have been identified as the immediate
accurate predictor of actual behaviour (Ajzen, 1991; Jarvis, 2016). Recognising that intentionality
is a state of mind directing a person’s attention (and therefore experience and action) towards a
specific goal in order to achieve something (Bird, 1988), intentions have been targeted towards
the entrepreneurship domain insofar as intention energises, directs, and sustains action towards
entrepreneurial goals (Hallam et al., 2016; Pruett et al., 2009; Liñán et al., 2011).
Intention-based models, such as the Bird (1988) model of entrepreneurial intentionality,
Ajzen’s (1991) theory of planned behaviour (TPB) model, and Shapero and Sokol’s (1982)
model of entrepreneurial event (SEE), offer a well-developed theory base and suggest that to
encourage enterprise creation, it is important first to increase perceptions of feasibility and
desirability (Krueger et al., 2000). Additionally, entrepreneurial intentions are influenced by
the continuous interaction between entrepreneurs and their context, where the context is
thought to exert an influence on the formation of intent and its antecedents – feasibility and
desirability (Busenitz et al., 2000).
Similarly, the need for greater consideration of the influence of the context in the SE literature
is increasingly recognised (Mair and Marti, 2009; Volkmann et al., 2012; Welter and Smallbone,
2011). SE is context embedded, which implies that the emergence and implementation of SE
varies according to the socioeconomic and cultural environment (Bernardino et al., 2015; Mair
and Marti, 2009). In particular, the institutional environment plays an important role in
establishing SE as a concept (Bowen and De Clercq, 2008). Institutional environments are
commonly considered to comprise three principal components, the regulative, normative, and
cognitive “pillars” (Scott, 2001). In order to fully understand SE, it has been suggested these
different institutional pillars need to be considered, particularly as the environment influences
SE and in turn SE influences its environment (Urban, 2013; Welter and Smallbone, 2011).
However, the influence of the external environment on the individual, the process and
the organisation has only received little attention in the SE literature (Bacq and Janssen,
2011), where a large part of research on institutions have been either case based, or have
predominantly examined the regulatory (formal) environment (Manolova et al., 2008).
Moreover, much of the current academic discussion around the nature of SE is occurring in
the USA and in the European forums, drawing largely upon understandings, experiences,
and data from the developed world and more attention is required to examine the
dynamic aspects of country entrepreneurial activity (Marcotte, 2014). Across SE studies,
and particularly in relation to Africa, there remain few quantitative studies (Urban, 2015),
and consequently there is a need for quantitative research examining SE in an under-
researched African context that may also contribute to wider understandings in the field.
In Africa the typically complex institutional environment, with strong local, informal
institutions coexisting with national formal institutions, provide a particularly apt context
to study SE and the impact of the institutional environment (Zoogah et al., 2015).
 IJEBR By heeding this research call for more quantitative work and by applying a
23,4 well-established literature on entrepreneurial intentions to a new domain such as SE,
hypotheses are formulated which predict the influence of the different institutional pillars on
social entrepreneurial intentions (SEIs). This study contributes to the literature by improving
the understanding of the influence of antecedents in the development of SEI, which is
important when explaining the relationship between individuals’ perceptions, context, and
640 intentions (Baierl et al., 2014; Schlaegel and Koenig, 2014). Moreover, investigating the sources
and antecedents of behavioural intentions to set up a social enterprise is an important first
step towards a comprehensive theory of SE (Mair and Noboa, 2003).
Investigating SEI is particularly relevant to the present socioeconomic milieu of South
Africa (SA), as it offers the promise of empowering marginalised segments of the population,
where traditional government initiatives are unable to satisfy the entire social deficit and
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where the survival of many social enterprises is at stake (Rwigema et al., 2010). Furthermore,
it is anticipated that a new understanding of the influence of the institutional environment on
SEI and its antecedents may serve as a catalyst for this emerging and important activity in
SA. The study has important implications for educators and policy makers who can influence
the formation and development of SEI (Harding and Cowling, 2006).
This paper is structured as follows: the first section explains the theoretical foundations
underlying the conceptual model and hypotheses are formulated for empirical testing.
The second section introduces the methodological design of the empirical work, which is based
on primary survey data. The third section presents the results of the statistical analysis, while
the final section discusses the findings and their implications for policy and further research.

Literature review
Entrepreneurial intentions
Intentions are the single best predictor of any planned behaviour, including
entrepreneurship (Krueger, 1993). A strong association exists between entrepreneurial
intentions and actual entrepreneurial behaviour (Krueger et al., 2000). Attitudes influence
behaviour by shaping intentions (Krueger et al., 2000). Since the seminal articles by Ajzen
(1991), Shapero and Sokol (1982), and Bird (1988), a large and still growing number of
studies have focussed on entrepreneurial intentions.
Bird (1988) was one of the first authors to emphasise the importance of intentions when
studying entrepreneurship. On the basis of qualitative data her model suggests that
intentions develop from both rational and intuitive thinking, which in turn are affected by
the entrepreneur’s social, political, and economic context, and his/her perceived history,
current personality, and abilities. Shapero and Sokol (1982) entrepreneurial event model
(EEM) shows that intentions rely on the elements of perceived desirability, likelihood to act,
and perceived feasibility. Perceived feasibility is affected by the person’s perceived ability to
perform the specific behaviour required for setting up the venture (self-efficacy beliefs)
and is also influenced by the person’s social capital. Ajzen (1991) TPB model is a recognised
theory, where intentions are explained by attitudes towards behaviour, subjective norms,
and perception of behavioural control. The TPB model suggests that people intend to
perform a specific behaviour if their personal assessments of the questioned behaviour are
positive, if they think their important referents agree with it, and if they assume that the
required resources and opportunities are available (Ajzen, 1991).
Using an evidence-based approach and extending the pioneering work by Krueger et al.
(2000), who have been the first to compare and integrate the extant theories of intentions,
Schlaegel and Koenig (2014) have recently meta-analytically tested and compared the TPB
(Ajzen, 1991) and the EEM (Shapero and Sokol, 1982). Schlaegel and Koenig’s (2014)
meta-analytic evidence suggests that a combination of the TPB with perceived desirability
is most powerful in explaining and understanding entrepreneurial intentions. Positive
 attitudes towards entrepreneurship will positively affect the personal attractiveness of Institutional
starting one’s own business as more favourable attitudes justify more favourable environment
perceptions of desirability of the behaviours related to the goal of becoming an entrepreneur and SE
(Fitzsimmons and Douglas, 2011).
Correspondingly, in the SE space, the intent to pursue a social opportunity and create a intentions
social venture is predicated on the perceived desirability and feasibility of the undertaking.
The core antecedents of SEIs are perceptions of desirability and feasibility of entrepreneurial 641
action (Mair and Noboa, 2003). Desirability is concerned with whether an individual is attracted
by the social opportunity, while perceived feasibility is the degree with which individuals
believe in their own ability to create a social venture (Mair and Noboa, 2003). The relevance of
these antecedents in SEI is captured in the formulation of the study hypotheses as they relate to
the institutional environment. First, institutional theory is discussed before merging the
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literatures on SE and institutions and where the hypotheses are then formulated.

Institutions and emerging markets

Institutions can be described as relatively widely diffused practices, technologies, or rules of
social interaction that have become entrenched in the sense that it is costly to choose
alternative practices, technologies, or rules (DiMaggio and Powell, 1991; North, 1990; Welter
and Smallbone, 2011). Busenitz et al. (2000) suggest that institutional profiles determine the
level and type of entrepreneurial activity in economies. The concept of a “country
institutional profile” was developed by Kostova (1997) and later validated and refined by
Busenitz et al. (2000) through a six-nation study in which the findings indicated the key
differences among countries (Valdez and Richardson, 2013). New institutional theories posit
that organisational structures and behaviours develop to reflect the legislative, normative,
and cognitive requirements of institutional environments, adherence to which ensures
legitimacy (Scott, 2001; Roth and Kostova, 2003).
Research is increasing which finds that country institutional environments, which
develop over time, and in turn determine and shape perceptions of desirability, feasibility
and intentions (Griffiths et al., 2013), influence entrepreneurial activities. Several studies
emphasise the uniqueness of the institutional environment in subsistence markets, where
normative and cognitive institutions are suggested to prevail, with regulative institutions
playing a much smaller (or negligible) role (e.g. Warren et al., 2016). Moreover, it has been
suggested that in subsistence markets, business ecosystems are often characterised by a
higher prevalence of structural holes, with regulatory gaps also often being prevalent
(Kolk, 2014). Mixed results have emerged from studies identifying contextual as well as
individual antecedents of SE, with little research investigating the influence of the
institutional dimensions on SEI (Urban, 2013). For instance, Griffiths et al. (2013)
investigated contextual macro-level factors and reported that these factors do not affect SE
to the same extent as traditional entrepreneurship. On the other hand, Bernardino et al.
(2015) emphasise that institutions have both direct and indirect effects on the resolution for
an individual to become a social entrepreneur, which will vary according to the levels of
social challenges, e.g. poverty and unemployment.
Appreciating the importance of institutional theory in terms of explaining SEI (Griffiths et al.,
2013) particularly for entrepreneurs operating in emerging markets (Urban, 2013), the regulative,
normative, and cognitive institutional environments (Scott, 2001; Roth and Kostova, 2003) are
briefly delineated to indicate their underpinning in the formulation of the study hypotheses.

Regulatory institutional environment

The regulatory environment refers to “formal rules as well as incentives that constrain and
regularize entrepreneurial behaviour” (Seelos et al., 2011, p. 335). The regulatory environment
(formal and informal) is responsible for setting rules and establishing rewards or punishments
 IJEBR (Valdez and Richardson, 2013). Entrepreneurs in emerging markets face rapid institutional
23,4 changes, reflecting the rapidly changing economic climate and changes in levels of
government involvement, ownership patterns, and enforcement of business laws, all of which
may impact their performance (Peng et al., 2009). Given the regulatory constraints and other
sensitivities it can be difficult for entrepreneurs to fill some institutional voids in emerging
markets (Khanna and Palepu, 2011). Regulatory factors have been found to exert control over
642 social entrepreneurial processes and outcomes (Seelos et al., 2011). Estrin et al. (2013) find that
social entrepreneurial ventures are successful in institutional contexts where there is a strong
rule of law. Urban (2013) reports favourable perceptions of the regulatory institutional
environment and positive associations with self-efficacy (closely related to feasibility) in the
South African context. Several researchers suggest the promotion of a conducive regulatory
environment together with the development of a supportive broader framework for SE to
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flourish (Bernardino et al., 2015). Consequently, in the first instance, it is expected:

H1. Positive perceptions of the regulatory institutional environment are associated with
higher levels of (a) perceptions of feasibility and (b) perceptions of desirability.

Normative institutional environment

The normative environment refers to the degree to which a country’s residents admire and
perceive entrepreneurial thinking and innovative activities as important (Busenitz et al., 2000).
Sine and David (2010) argue that norms influence the resolution to become an entrepreneur,
that is, who will and who will not become an entrepreneur. Normative actors play a critical
role in the guiding and shaping of entrepreneurial outcomes. According to Seelos et al. (2011),
the institutional environment creates mechanisms that shape the context of social
entrepreneurial ventures through creating norms of conduct and meaningful systems.
Normative mechanisms arise from the social structures and are responsible for shaping
the perceived appropriate, as well as expected, entrepreneurial behaviour (Seelos et al., 2011).
The normative pillar is concerned with societal values (i.e. “What is attractive?”) and social
norms, which reflect the generally acceptable behaviour to which individuals abide or
adhere to in society (Valdez and Richardson, 2013). Individuals within a society tend to
adhere and uphold societal norms, thereby acting in a socially attractive and acceptable way
(Bygrave and Minniti, 2000). It has been suggested that an improvement of the future
narrative of SE is only possible if a normative change is reproduced in people’s minds
(Karanda and Toledano, 2012). Following this line of reasoning it is predicted that:
H2. Positive perceptions of the normative institutional environment are associated with
higher levels of (a) perceptions of feasibility and (b) perceptions of desirability.

Cognitive institutional environment

The cognitive environment refers to the templates and scripts shared among a community or
nation (Seelos et al., 2011). Beliefs influence entrepreneurial processes, structures, and
outcomes and cultural cognitive legitimacy is the degree to which a process is aligned with the
ideologies “taken for granted” assumptions in a social setting (Sine and David, 2010).
The entrepreneurial cognition literature has developed substantially in the area of
examination of cognitions relating to entrepreneurial decision making (Baron, 2008; Krueger
et al., 2000). Several cognitive and behavioural attributes have also been associated with SEI,
and range from the courage to accept social criticism, experiencing less failure-anxiety, having
greater receptivity to others’ feelings, perseverance, communication skills, ability to appear
trustworthy, creativity, and the ability to satisfy customers’ needs (Urban, 2008). Background
variables and experience facilitate to enhance self-beliefs, which in turn increase the social
entrepreneurs’ perceived capability to act. Both self-efficacy and social support enable the
 entrepreneur to view the social enterprise as something feasible and therefore are important Institutional
elements in the process of formation of SEI (Mair and Noboa, 2003). Consequently environment
understanding the formation and factors influencing SEI is essential in equipping individuals and SE
with the skills necessary to eradicate social problems and encourage sustainable development
(Terjesen et al., 2012). On the basis of aforementioned findings, it is hypothesised that: intentions
H3. Positive perceptions of the cognitive institutional environment are associated with
higher levels of (a) perceptions of feasibility and (b) perceptions of desirability. 643
In summary, the theory on intentions is clear that the resolution to become a social
entrepreneur is influenced by the perceptions of desirability and feasibility (Mair and Noboa,
2003). Consistent with such empirical evidence, social entrepreneurs must perceive themselves
as both capable and psychologically equipped to function. This study extends this
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relationship by hypothesising that perceptions of feasibility and desirability are influenced by

the institutional dimensions as mentioned, and by building on extant theory, the final
hypothesis reflects the direct impact of perceived desirability and feasibility on SEI, where:
H4. Perceptions of (a) feasibility and (b) perceptions of desirability are positively
associated with SEIs.
Notwithstanding the complexity of the phenomenon and the reciprocal nature of
relationships between the institutional dimensions and the antecedents of SEI, we present a
conceptual model (Figure 1), which is restricted to a number of variables and links, reflecting
the hypotheses formulated for this study.

Methodology
A methodological approach consistent with previous studies on the institutional environment
and SEI was used (Liñán and Chen, 2009; Urban, 2013; Valdez and Richardson, 2013).
Researchers in this field have focussed on using quantitative research methods to establish
legitimacy and affirm the discipline of SE as an explicit domain of inquiry (Manolova et al.,
2008). Given the predominantly psychological nature of the constructs examined in this study,
students were surveyed as these student samples represent a meaningful first step in
exploring the psychological basis for behaviours, as confirmed within the management and
entrepreneurship literatures (Audia et al., 2000). Relying on students to investigate SEI allows
for the improvement of predictive abilities, providing a fertile ground from which seeds of SE
can sprout (Harding and Cowling, 2006). A student sample is likely to provide greater
heterogeneity in SEI than a sample of social entrepreneurs. This reasoning is consistent with
the Greenberg (1987) rationale that the homogeneity typical of samples constrained to actors

H1a
Regulatory environment
Feasibility
H1b H4a

H2a
Social entrepreneurial
Normative environment intentions
H2b

H3a
H4b
Desirability Figure 1.
Cognitive environment H3b Research model with
hypotheses
 IJEBR within productive-economic organisations’ challenges the assumption of generalisability
23,4 beyond a very narrowly focussed population. Additionally, student respondents often possess
the talent, interest, and energy to become the next generation of social and civic leaders
(Harding and Cowling, 2006).

Sampling and data collection

644 The study draws on a sample of students at universities in SA. SA’s 26 public universities
are distributed within all nine provinces of SA. Provinces which house the three main
metropolitan centres, namely, KwaZulu-Natal, Gauteng, and the Western Cape, are home to
the largest number of universities. Prominent public South African universities include the
University of Johannesburg, University of Cape Town, University of KwaZulu-Natal,
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University of Pretoria, University of Stellenbosch, University of Witwatersrand,

Rhodes University, and the University of South Africa (Universities South Africa, 2016).
To ensure sufficient variability and a high regional representativeness, data were drawn
from the three largest provinces across SA.
The survey population consisted of 1,200 students in the Faculties of Management and
Commerce at three different prominent public universities in SA during the survey period
(August-October 2015). The rationale for selecting commerce and management students is
that past research has found that the propensity of social entrepreneurial activity
engagement is more prevalent amongst business management students than the rest of the
general population (Turker and Selcuk, 2009). Terjesen et al. (2012) found that individuals
who had completed post-secondary and graduate education were most likely to engage in
SE. Similarly, Urbano et al. (2010) affirm the view that university students have the most
potential to become entrepreneurs as higher education provides the opportunity to prepare
would-be entrepreneurs.
As the objective of this paper study was to look SEI, individuals who were either full or
part-time social entrepreneurs or were starting a social enterprise at the time the survey was
conducted were excluded from the survey. A written request was submitted to the relevant
university officer to obtain the necessary permission for students to participate and to
administer the survey. Approval letters were obtained from the relevant officers at the
universities where the ethics approval process required an offer of anonymity to the
respondents. The data collection phase was preceded by a pilot phase in August 2015,
during which 25 respondents were requested to comment on the questionnaire, allowing
refinement of the instrument. The first mailing resulted in a response of 153 students, and
was followed by a second and third e-mail request for filling out the online questionnaire,
one week and three weeks later, respectively. These efforts resulted in 40 additional
responses. No patterns among the undelivered surveys were noticed as undelivered surveys
were distributed approximately evenly among different schools/faculties, resulting in 193
full questionnaires or a response rate of 16.5 per cent. Previous similar studies have reported
response rates of 26 per cent (Urban, 2015), and this response rate was deemed acceptable
for online e-mail-solicited surveys of this nature (Sheehan and McMillan, 1999). Additionally,
t-tests were conducted on the sample and no significant differences between early and late
respondents in institutional location, age, or gender were detected.

The research instrument

The research survey design was a self-reporting closed-ended questionnaire consisting of
three separate sections. Care was taken to ensure clarity in terminology and to ensure that
the items of the questionnaire addressed the hypotheses. Following the literature review,
suitable measures for the purpose of this study were identified where theoretical and
empirical support for each construct was evident.
 SEI. SEI was operationalized as an attempt at new social enterprise activity or new Institutional
enterprise creation, with social or community goals as its base and where the profit is environment
invested in the activity or venture rather than returned to investors (Harding and Cowling,
2006). Scale items were sourced from previous research (Liñán and Chen, 2009; Mair and
and SE
Noboa, 2003; Urban, 2013) and slightly modified to address SE in accordance with the aim of intentions
the study. Nine items were used to measure SEI and included questions such as: “I will make
every effort to start and run my own social enterprise; I am determined to create a social 645
entrepreneurial venture in the future; I have very seriously thought of starting a social
enterprise in the future”. On the basis of the notion that the degree and intensity of
individuals’ entrepreneurial intent might reasonably be expected to vary from person to
person, and to vary for the same person at different points in time depending on
circumstances, individual entrepreneurial intent is best assessed using a continuous,
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as opposed to a categorical, measurement approach (Thompson, 2009).

Perceived feasibility and desirability. The measures for these antecedents were derived from
past studies (Liñán and Chen, 2009; Mair and Noboa, 2003). Desirability was operationalized in
terms of whether an individual is attracted by the social opportunity and feasibility as to whether
an individual feels capable of creating a social venture (Mair and Noboa, 2003). Perceived
desirability was composed of three items (I would love it; I would be tense; I would be
enthusiastic) and perceived feasibility had five items (It would be very easy; I would be certain of
success; I would not be overworked; I know enough to start a social business; I am sure of myself).
Institutional environment dimensions. As Manolova et al. (2008) noted the Busenitz scale
(Busenitz et al., 2000) is an appropriate instrument to use in the context of emerging economies.
Results from their original study employing confirmatory factor analysis suggest high
reliability, internal consistency, and construct validity. Similarly Urban (2013) confirmed the
internal consistency and construct validity of these measures in the South African SE context.
For this study, five items represented the regulatory dimension (e.g. government organisations
assist individuals starting their own social ventures), four items for the normative dimension
(e.g. turning new ideas into social ventures is admired in this country), and four items for the
cognitive dimensions (e.g. those who start new social ventures know how to deal with risk).
All items were measured along a five-point Likert-type scale, ranging from “mostly
disagree” ¼ (1) to “mostly agree” ¼ (5), where the respondents were required to indicate the
extent of their agreement with each statement. In some instances, items were reverse coded
in the scale analyses and the wording was adjusted to reflect an SE context.
Control variables. A number of individual-level factors, which have been shown to affect
intentions (Krueger, 1993), were accounted in our study – gender: men have been found to be
more likely to engage in entrepreneurship compared to women (Terjesen et al., 2012).
Age: Generation Y is considered to be more likely to pursue and establish SE ventures
(Harding, 2007). The average age group engaging in SE has been reported to be between 25
and 34 years of age, while the 18-24 year age group being least likely to engage in SE
(Terjesen et al., 2012). Family background: entrepreneurial parents are viewed as the perfect
role models, hence the likelihood for their offspring to opt for an entrepreneurial career path.
The likelihood of engaging in entrepreneurship is higher when there is a history of
entrepreneurship in the family (Urban, 2008).These control variables were coded as follows:
gender (dummy variables 1 ¼ men, 0 ¼ women), family background (dummy variables
1 ¼ yes, 0 ¼ no), age categories (18-24; 25-31; 32-38; 39-45; 45+ years).

Data analysis and quality checks

Since the study was susceptible to common-method bias, which affects item reliability and
validity and/or the covariation between two constructs (Podsakoff et al., 2012), a number of
procedural and statistical steps were taken to minimise the risk. Procedurally, the
 IJEBR questionnaire featured a “counterbalanced” question order, and the respondents were
23,4 requested to be honest in their responses while assuring complete anonymity (Podsakoff
et al., 2012). Moreover, a consistent scale format was used, where scale items that have been
tried and tested were incorporated into the survey and the scale included negative and
positive statements. Statistically, to ensure rigour in the results all items relating to the
constructs were explored in a single principal component analysis, using Harman’s
646 one-factor test (Podsakoff et al., 2012). Results showed that six components with eigenvalues
greater than 1.0 were detected, which accounted for 68 per cent of the variance. The largest
component accounted for only 13 per cent. Consequently, no single factor accounted for the
majority of the variance and no evidence of common-method bias was identified.
To test the hypotheses, we used multiple regression analysis and estimated the
structural relationships in the research model using covariance-based SEM with the CALIS
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programme in SAS 9.3. Since we aim to improve understanding of SEI by testing the model
that is closely related to the SE model of Mair and Noboa (2003), the overall robustness of the
model can be advanced, by testing additional connections in the causal chain from
institutional environmental factors to antecedents to SEI.

Results
Sample characteristics
More men (55 per cent) than women (45 per cent) were sampled and majority of the
respondents (66 per cent) were in the age group of 25-31 years, 24 per cent were between
18 and 24 years, while 9 per cent were 32-38 years. The majority of the respondents have
family members who were either currently entrepreneurs or had been entrepreneurs
(64 per cent). These characteristics correspond with past SE studies insofar as men are
generally more likely to start a social enterprise than are women. However, the male/female
SE ratio varies tremendously across countries. For example, in Malaysia, Russia, and
Argentina, women are more likely to start a social enterprise than are men, while the ratio is
about equal in the USA, Finland, and China (Terjesen et al., 2012). In terms of age, around
the world, people aged 25-34 years have the highest propensity of being involved in SE, and
the highest prevalence rate of SE is among those with some post-secondary education,
followed by graduates. In SA, despite the fact that a minority of any country’s population
have completed post-secondary and graduate education, these individuals are the most
likely to be involved in SE (Terjesen et al., 2012). Studies also confirm that entrepreneurial
behaviour is influenced by a history of family enterprise, and where family tradition in
business inculcates a business culture. The nurturing of family businesses in SA has been
emphasised as playing an important role in the stimulation of the economy as well as in the
creation of enduring social stability (Rwigema et al., 2010). The SE context in SA reveals that
in terms of social enterprise types, education and training is the most prevalent type of
activity (Urban, 2008, 2013). This category reflects one of the so-called “wicked problems”
currently facing South Africans and it is no surprise they preoccupy the activities of social
enterprises. Racially segregated education and training was a cornerstone of apartheid
policy and massive inequalities continue to plague education in SA (Rwigema et al., 2010).

Reliability and validity of scales

The reliability and validity of the measurement scales was assessed by means of
exploratory factor analysis (EFA). EFA using the principal axis factoring with varimax
rotation and Kaiser Normalization was used. A solid overall MSA score of 0.92 was obtained
with the no individual score being lower than 0.88. On the basis of the Scree plot and
proportions of variation explained, a six-factor model was retained for the study model.
Table I shows the factor loadings, all having values W0.40, as per the final six-factor
solution, as well as the total variance explained by each construct. The EFA results
 Total variance
Institutional
Factor explained by Cronbach’s environment
Construct Items loading construct α and SE
Regulatory Government organisations assist individuals in starting their intentions
environment own social ventures 0.835 63.85 0.857
Government sets aside government contracts for new and
small social ventures 0.746
Local and national governments have support for individuals 647
starting a social venture 0.795
Government sponsors organisations that help new social
ventures develop 0.844
Even after failing, government assists social entrepreneurs
starting again 0.770
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Normative Turning new ideas into social ventures is admired in this

environment country 0.755 63.15 0.801
In this country, innovative and creative thinking is viewed
as a route to success 0.816
Social entrepreneurs are admired in this country 0.806
People in this country greatly admire those who start own
social ventures 0.800
Cognitive Individuals know how to protect a new social
environment venture legally 0.802 68.29 0.843
Those who start new social ventures know how to deal with risk 0.860
Those who start new social ventures know how to manage risk 0.866
Most people know where to find info about markets for their
services 0.774
Desirability I would love it 0.943 89.01 0.876
I would be enthusiastic 0.943
Feasibility I know enough to start a social venture 0.799 50.49 0.751
It would be very easy 0.750
I would be certain of success 0.739
I am sure of myself 0.684
I would not be overworked 0.557
Social I am determined to create a social entrepreneurial venture in
entrepreneur the future
intentions I have very seriously thought of starting a social venture in 0.902 65.66 0.932
the future 0.873
I have a strong intention to start a social venture in the future 0.860
My professional goal is to be an social entrepreneur 0.852
I will make every effort to start and run my own social venture 0.846
I do not have doubts about ever starting my own social venture
in the future 0.832
My qualification has contributed positively towards my
interest in starting a social venture 0.759
I am ready to do anything to be an social entrepreneur 0.679 Table I.
I had a strong intention to start my own social venture before Validity and
I started studying 0.652 reliability results

indicated that all the items on each scale loaded highly on their respective constructs except
for the item “I would be tense”, which was removed from the perceived desirability scale
construct since it had an anti-image correlation of 0.127 (less than 0.4, the cut-off)
(Hair et al., 2010). Thus, the desirability scale ended up with two items. The reliability of the
scales was tested using Cronbach’s α (Nunnally, 1978) for internal consistency and
satisfactory results were obtained (W0.70) – see Table II.
The means, standard deviations, and the Pearson correlations are reported in Table II.
Respondents showed most agreement with the perceived desirability construct (mean ¼ 3.92
out of 5), followed by normative environment (mean ¼ 3.70), SEI (mean ¼ 3.42), regulatory
environment (mean ¼ 3.08), perceived feasibility (mean ¼ 2.93), and the least rated was the
cognitive institutional environment (mean ¼ 2.88). Similar to other entrepreneurial intention
 IJEBR studies, we observe relatively moderate correlations between the antecedents of feasibility and
23,4 desirability (Armitage and Conner, 2001) and SEI. The correlation matrix provides no evidence
of multicollinearity among the variables as all the coefficients were within an acceptable range
(r ¼ 0.011 to r ¼ 0.402) and none of them exceeded the cut-off point of 0.85 (Fornell and Larker,
1981). These analyses provide evidence of discriminant validity.
Comparisons of means tests were conducted to evaluate the effects of single control
648 variables on SEI in isolation to other control variables, with no significant results detected.
Similarly, individual one-way ANOVA tests did not find any statistical differences in SEI
between any of the control variables expect for gender where the SEI mean was higher for the
female respondents (mean ¼ 3.577) compared to that of the male respondents (mean ¼ 3.290),
but was not statistically significant ( p ¼ 0.064). Following the comparison of means test and
for the sake of parsimony, control variables were not factored into the further analysis.
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SEM analyses were carried out in order to identify parameters which could be dropped
from the model without negatively affecting the model’s fit. The theoretical model consisted
of six latent variables corresponding to the three institutional dimensions, two antecedents
and the SEI construct. The standardized and unstandardised path coefficients, along with
goodness of fit indices, indicated a reasonable fit ( χ2 value ¼ 610.007; p ¼ 0.000) (Hu and
Bentler, 1999). The direct and indirect path coefficients indicated overall a reasonable fit
where Bentler’s comparative fit index value was 0.874, while the non-normed fit index was
0.858. These statistics indicate a relatively poor fit since the cut-off point is W0.9 for a
reasonable fit and W0.95 for best fit. However, the root mean square error approximation
(RMSEA) was 0.074 (90 per cent CI ¼ 0.064-0.084), which suggests that although the model
is not a best fit (RMSEA W0.05) it is still a reasonable fit since the value is acceptable as it is
below 0.08. Moreover, a number of paths linking the latent constructs proved to be non-
significant, where the direct, indirect, and total effects of the institutional dimensions on
feasibility and desirability and SEI were small and non-significant. In terms of the overall
model, multiple linear regression results showed that the model predicts only 4.7 per cent of
variation in SEI (R2 ¼ 0.047), where the overall model was non-significant ( p ¼ 0.316).
In terms of the hypotheses, Table III gives the results in terms of support or non-support
of each hypothesis. The relationship between the regulatory environment and feasibility
( β ¼ 0.251, t-value ¼ 2.657, p-value ¼ 0.008), and desirability and SEI ( β ¼ 0.249,
t-value ¼ 2.51, p-value ¼ 0.047), as well as feasibility and SEI ( β ¼ 0.204, t-value ¼ 2.04,
p-value ¼ 0.041), desirability and SEI ( β ¼ 0.200, t-value ¼ 2.021 p-value ¼ 0.037) were
positive and significant, proving support for H1a and H1b as well as for H4a and H4b.
Based on the Table III results no support was evident for the remaining hypotheses.

Discussion
In terms of H1 where positive perceptions of the regulatory institutional environment were
predicted to be associated with higher levels of (a) perceptions of feasibility and (b) perceptions
of desirability, the study results show that the regulatory environment has a positive and

Mean SD Regulatory Normative Cognitive Feasibility Desirability SEI

Regulatory 3.081 0.808 1

Normative 3.703 0.817 0.402** 1
Cognitive 2.880 0.805 0.299** 0.305** 1
Feasibility 2.937 0.728 0.282** 0.148 0.152 1
Table II. Desirability 3.921 1.150 0.011 0.015 0.073 0.271** 1
Descriptives and SEI 3.427 0.875 0.172 0.035 0.061 0.365* 0.331* 1
correlations Notes: *po 0.05; **p o0.01
 significant impact on feasibility and desirability, and furthermore both feasibility and Institutional
desirability positively affect SEI. These findings highlight the positive influence that regulations environment
have on SEI. The literature confirms that the regulatory environment is either an inhibitor or an and SE
enabler in the development of entrepreneurship (Herrington and Kew, 2014), where past studies
report that perceptions of the regulatory environment have a strong influence on the decision to intentions
engage in social entrepreneurial behaviour (Urban, 2013). The regulatory dimension of the
institutional environment in SA relates to national policies such as the New Growth Path 649
(Republic of South Africa, 2012), as well as varied regulations and legislation which are
significant in informing the activities of social entrepreneurs (e.g. the Non-Profit Organizations
Act). Against this backdrop, it is plausible that the regulatory dimension of the institutional
environment was found to be significantly related to the feasibility and desirability of SEI, since
formal institutions in SA are relatively strong, and in many areas, SA’s institutional
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environment creates opportunities for social enterprises (Urban, 2015).

For H2, the empirical evidence emanating from this study could not support that positive
perceptions of the normative institutional environment are associated with higher levels of
(a) perceptions of feasibility and (b) perceptions of desirability. Considering that social
networks and trust provided by the extended family, community-based, or organisational
relationships are often theorized to supplement the effects of education, experience, and
financial capital (Davidsson and Wiklund, 1997), a positive relationship between the
normative institutional environment and SEI was expected, and the non-significant result is
somewhat surprising. Perhaps in SA, decreasing political confidence specifically on issues
of transparency and accountability, correct appointments, affirmative action, crime,
inflation, the widening income gap, and corruption adversely affect social relations and
trust. Such adverse normative institutional conditions, in all probability influence SEI and
may result that individuals with good ideas do not want to be involved with government
departments or agencies since they anticipate some corrupt or cronyism disadvantage in
transacting with them (Herrington and Kew, 2014).
In terms of H3, no support was evident for positive perceptions of the cognitive
institutional environment to be associated with higher levels of (a) perceptions of feasibility
and (b) perceptions of desirability. A plausible explanation for the lack of the cognitive
institutional environment explaining SEI significantly may be related to such beliefs,
attitudes, and behaviours. While political initiatives and regulatory modifications and
changes are essential to raise awareness about SE, ultimately change can only come about
through changes in individual beliefs, attitudes, and behaviours (Baker, 2011). Research
finds that individuals constrained in their cognitive schemas and attitudes are less likely to
engage in alternative strategies and are therefore less adaptable when the decision context
changes, or when the decision context is novel and uncertain (Baron, 2008), as is the case
with SE which is in essence a change-orientated activity (Dees and Economy, 2001). Since
the cognitive dimension reflects the knowledge and skills possessed by the potential
entrepreneurs (Busenitz et al., 2000), it is not entirely surprising that no links were

Hypotheses β t (F-value) p Result

H1a: regulatory environment→feasibility 0.251 2.657 0.008 Supported

H1b: regulatory environment→desirability 0.249 2.516 0.047 Supported
H2a: normative environment→feasibility 0.025 0.268 0.789 Not supported
H2b: normative environment→desirability 0.034 0.361 0.718 Not supported
H3a: cognitive environment→feasibility 0.069 0.755 0.451 Not supported
H3b: cognitive environment→desirability −0.106 −1.169 0.242 Not supported Table III.
H4a: feasibility→SEI 0.204 2.044 0.041 Supported Summary of
H4b: desirability→SEI 0.200 2.021 0.037 Supported hypotheses results
 IJEBR discovered with SEI, as one of the biggest challenges facing SA is the development and
23,4 improvement of its knowledge and skills base (Urban, 2015).
Lastly, the results support H4 insofar as perceptions of (a) feasibility and (b) perceptions
of desirability were predicted to be positively associated with SEIs. By recognising the
intent to pursue a social opportunity and create a social venture predicated on the perceived
desirability and feasibility of the undertaking, it is not surprising that these antecedents
650 were found to explain SEI significantly in this study. Feasibility and desirability are the
attitudes offering “predictive validity” and predict intentions significantly (Schlaegel and
Koenig, 2014). The study results confirm this predictive validity and find a positive and
significant influence of both feasibility and desirability on SEI.
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Conclusions
Considering the overall paucity of research on the role that institutional factors play in
shaping SEI in a non-western context, the study contributes to the body of knowledge in an
under-researched African context. Research on African institutions has shown that
government involvement is more significant and at times more detrimental to enterprises,
than in other developed and emerging economies (Zoogah et al., 2015). In SA, as in many
parts of the world, the schism between the poor and the rich is widening and entrenched
inequalities (such as the sharp division between necessity and opportunity-driven
entrepreneurs) act as a major determinant to growth, development, and employment
creation (Rwigema et al., 2010).Additionally, SA has a dual-logic economy, where on the one
side there is a highly developed economic sector and on the other side one struggling for
survival (Urban, 2013). Despite the importance of SE, many individuals in emerging
economies seem not to have the intention to pursue social activities. When looking at
different types of social entrepreneurs, those involved in NGOs form the lowest proportion
of total SE activity (less than 30 per cent) in developing countries such as Africa as opposed
to more developed economies like the USA and European countries where NGOs are more
prevalent (Terjesen et al., 2012). A plausible reason for this discrepancy may be that
individuals in richer countries, having satisfied their own basic needs, may be more likely to
turn to the needs of others, unlike those struggling for survival. In other words, the
opportunity cost of SE may be higher in developing countries. Moreover, many individuals
in emerging economies may have the desire to pursue SE but are not engaging because they
are lacking in self-belief and the requisite entrepreneurial skills, which are linked to the
feasibility and desirability of SEI (Urban, 2013). Currently, in SA, the education system is
not leading to positive perceptions of personal feasibility and desirability as far as
entrepreneurship is concerned, which has a negative impact on the size of the country’s pool
of intentional entrepreneurs (Herrington and Kew, 2014).
In terms of academic relevance, this study is a starting point in filling the gap in the SE
literature, which has largely neglected institutional factors in an emerging market context.
Given the radical contrast between the institutional frameworks in Africa and those in
developed economies institutional theories are especially insightful for African research
(Zoogah et al., 2015). Examining the variance in SEI because of institutions and antecedents
of behavioural intentions is an important first step towards developing a comprehensive
theory of SE. By applying an institutional lens to SE, the study enhances the existing SEI
models. The study contributes to theory by extending established intention models by
adding specific institutional dimensions that directly influence perceptions of feasibility and
desirability. Further scholarly contributions relate to the empirically derived factors, which
add to the growing knowledge base and provide greater and clearer understanding of to
what extent the antecedents of feasibility and desirability are associated with SEI. It is
anticipated that this enhanced understanding of SEI in general may serve as a catalyst for
this emerging and important activity in SA.
 The study also yields a methodological contribution when considering that concerns Institutional
have been expressed as to whether imported instruments would stand up to environment
cross-validation in non-western contexts (Urban, 2008). In this study the reliability and and SE
validity of the different measures was established for the first time, to the best of our
knowledge, in an African context. On the basis of other factor analysis results construct intentions
validity was established which adds to the growing knowledge base and provides greater
and clearer understanding of institutional factors, perceived feasibility and desirability, 651
and SEI in this new context.
Implications for practitioners and policy makers relate to the need to be aware of the
institutional dimensions influencing SEI and of the numerous and often conflicting
regulatory, cognitive and normative pressures and constraints facing potential social
entrepreneurs. Additionally, as educational and training institutions are responsible for
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shaping the perceptions of SEI and aspirations of students (Urban, 2013), increased
exposure to SE and fostering of entrepreneurial skills and abilities could improve
perceptions of the cognitive and normative institutional environments. Educators can
focus on making SE an attractive career choice by promoting the field in order to enhance
the societal norms. By improving the perceptions and norms towards entrepreneurship,
individuals could enhance their levels of SEI through positive perceptions of desirability
and feasibility.
The study is limited by its cross-sectional nature, where the dynamism of the different
institutional arrangements and perceptions of SEI is lost by studying them at a snapshot in
time. A longitudinal approach would enhance additional understanding into the development
of SEI over time including the changing role played by the institutional context. Another
limitation of using cross-sectional data is that it prevents the regression model from
demonstrating causation and it automatically excludes the examination of the institution-
intention-behaviour relationship. However, predictive validity of the intention-behaviour
relationship in intentional models is rare in the business start-up context (Schlaegel and
Koenig, 2014). Although no claims of representativeness of the South African university
population were made, the study’s sample characteristics do seem to reflect fairly accurately
the general population demographics of students at public universities. In terms of measures,
as with previous similar studies, using aggregate measures of the different institutional
dimensions may mask subtle and persistent differences, and less readily observable
influences such as cultural traditions, or social norms and values (Manolova et al., 2008).
Future research could broaden the relationship between the antecedents and SEI to include
factors such as moral judgement and empathy (Mair and Noboa, 2003) as well as other
environmental factors such as cultural values. Another direction for future research is to
examine the possibility of reverse causality, where prior research (Krueger, 1993) suggests
that an increase in intentions may also affect perceived desirability.

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Corresponding author
Boris Urban can be contacted at: boris.urban@wits.ac.za

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