The impact of family support on young entrepreneurs' start-up activities
Research Paper Title:
“The impact of family support on young entrepreneurs’ start-up activities”
Authors:
Linda Edelman (Management Department, Bentley University)
Tatiana Manolova (Management Department, Bentley University)
Galina Shirokova (Graduate School of Management, St. Petersburg University)
Tatyana Tsukanova (Graduate School of Management, St. Petersburg University)
Background:
Receiving a college degree is no longer a guarantee of future employment. To address this, colleges and universities are offering courses in entrepreneurship. As new venture development is increasingly perceived as an essential weapon in the youth employment arsenal, it is critical to gain an understanding of those factors that influence the ability of young people to start a new business. This paper looks into two of those factors: financial and social capital.
Methodology:
Sample: 2011 Global University Entrepreneurial Spirit Students' Survey (GUESSS), a survey of university students from 19 countries
Sample Size: 12,933 nascent entrepreneurs who are in the process of starting their new venture
Analytical Approach: The researchers used (1) Harman's (1967) single-factor test by entering all variables included in the regression specifications into a principal components factor analysis and (2) they included a common latent factor & marker in their confirmatory factor analysis
Hypotheses:
The greater the family support, in the form of financial capital, the greater the scope of start-up activities undertaken by the young nascent entrepreneur.
The greater the family support, in the form of social capital, the greater the scope of start-up activities undertaken by the young nascent entrepreneurs.
The greater the family cohesiveness, the stronger the relationship between family financial capital and the scope of start-up activities undertaken by the young nascent entrepreneurs.
The greater the family cohesiveness, the stronger the relationship between family social capital and scope of start-up activities undertaken by the young nascent entrepreneurs.
Results:
Family social capital is positively associated with the scope of start-up activities.
Family financial capital is negatively associated with the scope of start-up activities.
Family cohesiveness amplifies the effect of family social capital.
The number of start-up activities is greater when there is both instrumental and emotional social support.
Conclusion:
This study makes a number of contributions. Specifically, the researchers ask if instrumental social support, in the form of social and financial capital alone is enough to lead to more start-up activities, or is the number of start-up activities enhanced when a young entrepreneur receives both instrumental and emotional social support from their family. In addition, their research reminds public policy makers about the importance of the family, and cautions them not to forget the family as they make decisions about what entrepreneurial activities to encourage.
Research Video: