Entrepreneurial Capital in Rural Environments and Business Performance: Insights from Young Entrepreneurs
Keywords:
Entrepreneurship Capital, Firm Performance, Young Entrepreneur, Rural Environment
Abstract
Rural entrepreneurship is a new concept that has been recognized as a vital component in the development of a country's economy. However, little is known about the role of rural entrepreneurship capital in influencing the actions of young entrepreneurs in rural areas. This study employs a quantitative methodology utilizing purposive sampling technique. A total of 733 questionnaires were collected and deemed valid for this study. The results of hypothesis testing reveal that the relationship between CC (Cultural Capital) and FP (Firm Performance) is the most robust among all variables. Moreover, the findings highlight the importance of education, familial backing, and entrepreneurial networks within rural environments for the success of young individuals. The findings of this study can offer valuable perspectives for future research endeavors and can aid in improving educational initiatives aimed at nurturing entrepreneurship among young people.
References
[1] M. W.-P. Fortunato, “Supporting rural entrepreneurship: A review of conceptual developments from research to practice,” Community Dev., vol. 45, no. 4, pp. 387–408, 2014.
[2] Istiqomah and W. R. Adawiyah, “Development of rural group entrepreneurship in Indonesia: benefits, problems, and challenges,” Int. J. Entrep. Small Bus., vol. 34, no. 3, pp. 330–342, 2018.
[3] M. L. Pato and A. A. C. Teixeira, “Twenty years of rural entrepreneurship: A bibliometric survey,” Sociol. Ruralis, vol. 56, no. 1, pp. 3–28, 2016.
[4] S. Korsgaard, S. Müller, and H. W. Tanvig, “Rural entrepreneurship or entrepreneurship in the rural–between place and space,” Int. J. Entrep. Behav. Res., vol. 21, no. 1, pp. 5–26, 2015.
[5] T. Erikson, “Entrepreneurial capital: the emerging venture’s most important asset and competitive advantage,” J. Bus. Ventur., vol. 17, no. 3, pp. 275–290, 2002.
[6] D. Audretsch and M. Keilbach, “Entrepreneurship capital and economic performance,” Reg. Stud., vol. 38, no. 8, pp. 949–959, 2004.
[7] M.-S. Castaño, M.-T. Méndez, and M.-Á. Galindo, “The effect of social, cultural, and economic factors on entrepreneurship,” J. Bus. Res., vol. 68, no. 7, pp. 1496–1500, 2015.
[8] J. P. H. Poon, D. T. Thai, and D. Naybor, “Social capital and female entrepreneurship in rural regions: Evidence from Vietnam,” Appl. Geogr., vol. 35, no. 1–2, pp. 308–315, 2012.
[9] D. P. Aldrich and M. A. Meyer, “Social capital and community resilience,” Am. Behav. Sci., vol. 59, no. 2, pp. 254–269, 2015.
[10] B. J. Orser, A. L. Riding, and K. Manley, “Women entrepreneurs and financial capital,” Entrep. Theory Pract., vol. 30, no. 5, pp. 643–665, 2006.
[11] J. A. Felício, E. Couto, and J. Caiado, “Human capital, social capital and organizational performance,” Manag. Decis., vol. 52, no. 2, pp. 350–364, 2014.
[12] W. Damon, K. C. Bronk, and T. Porter, “Youth entrepreneurship,” Emerg. trends Soc. Behav. Sci. An Interdiscip. searchable, linkable Resour., pp. 1–13, 2015.
[13] G. Faggio and O. Silva, “Self-employment and entrepreneurship in urban and rural labour markets,” J. Urban Econ., vol. 84, pp. 67–85, 2014.
[14] J. B. Barney, “Resource-based theories of competitive advantage: A ten-year retrospective on the resource-based view,” J. Manage., vol. 27, no. 6, pp. 643–650, 2001.
[15] M. Jaakkola, “Market-driven innovation capability and financial performance: moderating effect of environmental turbulence,” in The Sustainable Global Marketplace: Proceedings of the 2011 Academy of Marketing Science (AMS) Annual Conference, Springer, 2014, p. 320.
[16] M. Scott, “Cultural entrepreneurs, cultural entrepreneurship: Music producers mobilising and converting Bourdieu’s alternative capitals,” Poetics, vol. 40, no. 3, pp. 237–255, 2012.
[17] J. Beneke, S. Blampied, N. Dewar, and L. Soriano, “The impact of market orientation and learning orientation on organisational performance: A study of small to medium-sized enterprises in Cape Town, South Africa,” J. Res. Mark. Entrep., vol. 18, no. 1, pp. 90–108, 2016.
[18] P. Shan, M. Song, and X. Ju, “Entrepreneurial orientation and performance: Is innovation speed a missing link?,” J. Bus. Res., vol. 69, no. 2, pp. 683–690, 2016.
[19] E. B. Bayarçelik and M. Öz?ahin, “How Entrepreneurial climate effects firm performance?,” Procedia-Social Behav. Sci., vol. 150, pp. 823–833, 2014.
[20] S. Gerschewski and S. S. Xiao, “Beyond financial indicators: An assessment of the measurement of performance for international new ventures,” Int. Bus. Rev., vol. 24, no. 4, pp. 615–629, 2015.
[21] M. Hughes and R. E. Morgan, “Deconstructing the relationship between entrepreneurial orientation and business performance at the embryonic stage of firm growth,” Ind. Mark. Manag., vol. 36, no. 5, pp. 651–661, 2007.
[22] M. A. Roomi, “Entrepreneurial capital, social values and Islamic traditions: Exploring the growth of women-owned enterprises in Pakistan,” Int. Small Bus. J., vol. 31, no. 2, pp. 175–191, 2013.
[23] E. Shaw, S. Marlow, W. Lam, and S. Carter, “Gender and entrepreneurial capital: implications for firm performance,” Int. J. Gend. Entrep., vol. 1, no. 1, pp. 25–41, 2009.
[24] A. Prieur and M. Savage, “Emerging forms of cultural capital,” Eur. Soc., vol. 15, no. 2, pp. 246–267, 2013.
[25] F. Kellermanns, J. Walter, T. R. Crook, B. Kemmerer, and V. Narayanan, “The resource?based view in entrepreneurship: A content?analytical comparison of researchers’ and entrepreneurs’ views,” J. Small Bus. Manag., vol. 54, no. 1, pp. 26–48, 2016.
[26] Z. Wei, X. Song, and D. Wang, “Manufacturing flexibility, business model design, and firm performance,” Int. J. Prod. Econ., vol. 193, pp. 87–97, 2017.
[27] T. Dunn and D. Holtz-Eakin, “Financial capital, human capital, and the transition to self-employment: Evidence from intergenerational links,” J. Labor Econ., vol. 18, no. 2, pp. 282–305, 2000.
[28] B. Uzzi, “Embeddedness in the making of financial capital: How social relations and networks benefit firms seeking financing,” Am. Sociol. Rev., pp. 481–505, 1999.
[29] A. Franzen and D. Hangartner, “Social networks and labour market outcomes: The non-monetary benefits of social capital,” Eur. Sociol. Rev., vol. 22, no. 4, pp. 353–368, 2006.
[30] D. Gelderblom, “The limits to bridging social capital: Power, social context and the theory of Robert Putnam,” Sociol. Rev., vol. 66, no. 6, pp. 1309–1324, 2018.
[31] W. Stam, S. Arzlanian, and T. Elfring, “Social capital of entrepreneurs and small firm performance: A meta-analysis of contextual and methodological moderators,” J. Bus. Ventur., vol. 29, no. 1, pp. 152–173, 2014.
[32] J. M. Unger, A. Rauch, M. Frese, and N. Rosenbusch, “Human capital and entrepreneurial success: A meta-analytical review,” J. Bus. Ventur., vol. 26, no. 3, pp. 341–358, 2011.
[33] G. Bosworth, “Education, mobility and rural business development,” J. Small Bus. Enterp. Dev., vol. 16, no. 4, pp. 660–677, 2009.
[34] B. Weijters, E. Cabooter, and N. Schillewaert, “The effect of rating scale format on response styles: The number of response categories and response category labels,” Int. J. Res. Mark., vol. 27, no. 3, pp. 236–247, 2010.
[35] T. R. Crook, S. Y. Todd, J. G. Combs, D. J. Woehr, and D. J. Ketchen Jr, “Does human capital matter? A meta-analysis of the relationship between human capital and firm performance.,” J. Appl. Psychol., vol. 96, no. 3, p. 443, 2011.
[36] J. F. Hair, W. C. Black, B. J. Babin, R. E. Anderson, and R. L. Tatham, “Multivariate data analysis 6th Edition.” Pearson Prentice Hall. New Jersey. humans: Critique and reformulation …, 2006.
[2] Istiqomah and W. R. Adawiyah, “Development of rural group entrepreneurship in Indonesia: benefits, problems, and challenges,” Int. J. Entrep. Small Bus., vol. 34, no. 3, pp. 330–342, 2018.
[3] M. L. Pato and A. A. C. Teixeira, “Twenty years of rural entrepreneurship: A bibliometric survey,” Sociol. Ruralis, vol. 56, no. 1, pp. 3–28, 2016.
[4] S. Korsgaard, S. Müller, and H. W. Tanvig, “Rural entrepreneurship or entrepreneurship in the rural–between place and space,” Int. J. Entrep. Behav. Res., vol. 21, no. 1, pp. 5–26, 2015.
[5] T. Erikson, “Entrepreneurial capital: the emerging venture’s most important asset and competitive advantage,” J. Bus. Ventur., vol. 17, no. 3, pp. 275–290, 2002.
[6] D. Audretsch and M. Keilbach, “Entrepreneurship capital and economic performance,” Reg. Stud., vol. 38, no. 8, pp. 949–959, 2004.
[7] M.-S. Castaño, M.-T. Méndez, and M.-Á. Galindo, “The effect of social, cultural, and economic factors on entrepreneurship,” J. Bus. Res., vol. 68, no. 7, pp. 1496–1500, 2015.
[8] J. P. H. Poon, D. T. Thai, and D. Naybor, “Social capital and female entrepreneurship in rural regions: Evidence from Vietnam,” Appl. Geogr., vol. 35, no. 1–2, pp. 308–315, 2012.
[9] D. P. Aldrich and M. A. Meyer, “Social capital and community resilience,” Am. Behav. Sci., vol. 59, no. 2, pp. 254–269, 2015.
[10] B. J. Orser, A. L. Riding, and K. Manley, “Women entrepreneurs and financial capital,” Entrep. Theory Pract., vol. 30, no. 5, pp. 643–665, 2006.
[11] J. A. Felício, E. Couto, and J. Caiado, “Human capital, social capital and organizational performance,” Manag. Decis., vol. 52, no. 2, pp. 350–364, 2014.
[12] W. Damon, K. C. Bronk, and T. Porter, “Youth entrepreneurship,” Emerg. trends Soc. Behav. Sci. An Interdiscip. searchable, linkable Resour., pp. 1–13, 2015.
[13] G. Faggio and O. Silva, “Self-employment and entrepreneurship in urban and rural labour markets,” J. Urban Econ., vol. 84, pp. 67–85, 2014.
[14] J. B. Barney, “Resource-based theories of competitive advantage: A ten-year retrospective on the resource-based view,” J. Manage., vol. 27, no. 6, pp. 643–650, 2001.
[15] M. Jaakkola, “Market-driven innovation capability and financial performance: moderating effect of environmental turbulence,” in The Sustainable Global Marketplace: Proceedings of the 2011 Academy of Marketing Science (AMS) Annual Conference, Springer, 2014, p. 320.
[16] M. Scott, “Cultural entrepreneurs, cultural entrepreneurship: Music producers mobilising and converting Bourdieu’s alternative capitals,” Poetics, vol. 40, no. 3, pp. 237–255, 2012.
[17] J. Beneke, S. Blampied, N. Dewar, and L. Soriano, “The impact of market orientation and learning orientation on organisational performance: A study of small to medium-sized enterprises in Cape Town, South Africa,” J. Res. Mark. Entrep., vol. 18, no. 1, pp. 90–108, 2016.
[18] P. Shan, M. Song, and X. Ju, “Entrepreneurial orientation and performance: Is innovation speed a missing link?,” J. Bus. Res., vol. 69, no. 2, pp. 683–690, 2016.
[19] E. B. Bayarçelik and M. Öz?ahin, “How Entrepreneurial climate effects firm performance?,” Procedia-Social Behav. Sci., vol. 150, pp. 823–833, 2014.
[20] S. Gerschewski and S. S. Xiao, “Beyond financial indicators: An assessment of the measurement of performance for international new ventures,” Int. Bus. Rev., vol. 24, no. 4, pp. 615–629, 2015.
[21] M. Hughes and R. E. Morgan, “Deconstructing the relationship between entrepreneurial orientation and business performance at the embryonic stage of firm growth,” Ind. Mark. Manag., vol. 36, no. 5, pp. 651–661, 2007.
[22] M. A. Roomi, “Entrepreneurial capital, social values and Islamic traditions: Exploring the growth of women-owned enterprises in Pakistan,” Int. Small Bus. J., vol. 31, no. 2, pp. 175–191, 2013.
[23] E. Shaw, S. Marlow, W. Lam, and S. Carter, “Gender and entrepreneurial capital: implications for firm performance,” Int. J. Gend. Entrep., vol. 1, no. 1, pp. 25–41, 2009.
[24] A. Prieur and M. Savage, “Emerging forms of cultural capital,” Eur. Soc., vol. 15, no. 2, pp. 246–267, 2013.
[25] F. Kellermanns, J. Walter, T. R. Crook, B. Kemmerer, and V. Narayanan, “The resource?based view in entrepreneurship: A content?analytical comparison of researchers’ and entrepreneurs’ views,” J. Small Bus. Manag., vol. 54, no. 1, pp. 26–48, 2016.
[26] Z. Wei, X. Song, and D. Wang, “Manufacturing flexibility, business model design, and firm performance,” Int. J. Prod. Econ., vol. 193, pp. 87–97, 2017.
[27] T. Dunn and D. Holtz-Eakin, “Financial capital, human capital, and the transition to self-employment: Evidence from intergenerational links,” J. Labor Econ., vol. 18, no. 2, pp. 282–305, 2000.
[28] B. Uzzi, “Embeddedness in the making of financial capital: How social relations and networks benefit firms seeking financing,” Am. Sociol. Rev., pp. 481–505, 1999.
[29] A. Franzen and D. Hangartner, “Social networks and labour market outcomes: The non-monetary benefits of social capital,” Eur. Sociol. Rev., vol. 22, no. 4, pp. 353–368, 2006.
[30] D. Gelderblom, “The limits to bridging social capital: Power, social context and the theory of Robert Putnam,” Sociol. Rev., vol. 66, no. 6, pp. 1309–1324, 2018.
[31] W. Stam, S. Arzlanian, and T. Elfring, “Social capital of entrepreneurs and small firm performance: A meta-analysis of contextual and methodological moderators,” J. Bus. Ventur., vol. 29, no. 1, pp. 152–173, 2014.
[32] J. M. Unger, A. Rauch, M. Frese, and N. Rosenbusch, “Human capital and entrepreneurial success: A meta-analytical review,” J. Bus. Ventur., vol. 26, no. 3, pp. 341–358, 2011.
[33] G. Bosworth, “Education, mobility and rural business development,” J. Small Bus. Enterp. Dev., vol. 16, no. 4, pp. 660–677, 2009.
[34] B. Weijters, E. Cabooter, and N. Schillewaert, “The effect of rating scale format on response styles: The number of response categories and response category labels,” Int. J. Res. Mark., vol. 27, no. 3, pp. 236–247, 2010.
[35] T. R. Crook, S. Y. Todd, J. G. Combs, D. J. Woehr, and D. J. Ketchen Jr, “Does human capital matter? A meta-analysis of the relationship between human capital and firm performance.,” J. Appl. Psychol., vol. 96, no. 3, p. 443, 2011.
[36] J. F. Hair, W. C. Black, B. J. Babin, R. E. Anderson, and R. L. Tatham, “Multivariate data analysis 6th Edition.” Pearson Prentice Hall. New Jersey. humans: Critique and reformulation …, 2006.
Published
2024-01-11
How to Cite
Hifzhan Frima Thousani, & Mochammad Heri Edy. (2024). Entrepreneurial Capital in Rural Environments and Business Performance: Insights from Young Entrepreneurs. International Journal of Health, Economics, and Social Sciences (IJHESS), 6(1), 88-97. https://doi.org/10.56338/ijhess.v6i1.4744
Section
Articles
