Transition to Entrepreneurship (TE) is a more concrete and viable path to enhance entrepreneurial initiatives with greater resilience. However, less is known about the ability of employees' inner drives to affect a transition, particularly when viewed through the lens of different generations. Based on the Trait Theory of Entrepreneurship, the current study investigated how self-efficacy can instil TE when mediated by entrepreneurial propensity and moderated by age generations. A field survey gathered data to perform a quantitative assessment of research hypotheses. Participants included employees of public and private institutions with significant career stability. Pre-validated instruments were tooled to measure the study variables on a seven-point Likert scale. The structural equation modelling analysed the data in the Smart PLS package. The findings were impressive, demonstrating the significant potential of self-efficacy to influence TE decisions. Entrepreneurial propensity was found to partially mediate the link between self-efficacy and TE. However, a remarkable difference in the strength of these associations was observed among different generations. Specifically, generations Y and Z appear to hold stronger ties, while, the relationship is relatively weaker in generation X. The implications suggest focusing on employees' inner traits as penetrators to boost entrepreneurial moves

1. 25 – 26 May 2023 , Colombo, Sri Lanka
Self-efficacy, Entrepreneurial Propensity, and Transition to
Entrepreneurship: A Generational Perspective
Presenting Author
WDNSM Tennakoon
Department of Business Management, Wayamba University of Sri Lanka, Kuliyapitiya, Sri Lanka
W.D.N.S.M. Tennakoon, W.J.A.J.M. Lasanthika, A.K.D.N. Dilshani, P.A.B.H. Amarathunga, S.M.N.
Praveeni and W.M.N.M. Wijethunge

2. Presentation Outline
 Background of the Study
 The Research Problem
 Research Questions and Objectives
 Literature Review
 Research Methodology
 Findings
 Contribution
 Limitations
 Future Research Directions
2

3. Biggest Challenge in the aftermath of COVID
19– Refuelling the economy….
Background of the Study
3

4. Background of the Study…contd.
Entrepreneurial
Motivation
Entrepreneurs as
“Family Products”
Entrepreneurs as
“Organization Products”
4

5. Source: Sri Lanka Labour force Survey, 2021
Employed Population by Employment Status and by Gender - 2021
The Research Problem
5

6. How Self-efficacy can instill Transition to
Entrepreneurship (TE) when mediated by
Entrepreneurial Propensity and moderated
by Age Generation?
The Research Problem…contd.
6

7. Research Questions
7
5 & 6. To assess the moderating effects of owner’s age
generation and gender on PsyCap-OR relationship
1. To identify the impact of owner’s PsyCap on SMEs’
ES
3. To evaluate the impact of OR on SMEs’ ES
4. To identify the mediating effect of OR on PsyCap-ES
relationship
7 & 8. To investigate the moderating effects of SME’s
scale and lifespan on OR-ES relationship
2. To detect the influence of owner’s PsyCap on the
SMEs’ OR
9. To explore the nature of owner’s profile in
resilient and economically sustained SMEs
10. To explore the nature of resilient and economically
sustained SMEs
How Self-efficacy can
instill Transition to
Entrepreneurship (TE)
when mediated by
Entrepreneurial
Propensity and
moderated by Age
Generation?

8. Research Objectives
8
5 & 6. To assess the moderating effects of owner’s age
generation and gender on PsyCap-OR relationship
1. To identify the impact of owner’s PsyCap on SMEs’
ES
3. To evaluate the impact of OR on SMEs’ ES
4. To identify the mediating effect of OR on PsyCap-ES
relationship
7 & 8. To investigate the moderating effects of SME’s
scale and lifespan on OR-ES relationship
2. To detect the influence of owner’s PsyCap on the
SMEs’ OR
9. To explore the nature of owner’s profile in
resilient and economically sustained SMEs
10. To explore the nature of resilient and economically
sustained SMEs
To identify the impact
of Self-efficacy,
Entrepreneurial
Propensity, and the
Age Generation on the
on the Transition to
Entrepreneurship.

9. Employee Transition to Entrepreneurship
• Employee transition to entrepreneurship is defined as
“leaving one organization to found another”
(Dobrev et al., 2005: 434).
• A growing number of studies argue that most entrepreneurs
are directly or indirectly former employees of existing firms
(Gacheru, 2007)
9

10. Problem Statement
The perceived barriers of employee transition to
entrepreneurship in the context of developed countries have been
satisfactorily investigated while such empirical evidences are
scant with respect to developing countries
(Gacheu, 2007; Velamuri, et al., 2005; Stuart & Ding, 2006; Rachmawan, Lizar, & Mangundjaya,
2015; Antawati, 2017).
Develop a Scale to Measure the Perceived Barriers of Employee
Transition to Entrepreneurship
10

11. Literature Review
11
Variable Dimensions
Demographic factors Age, gender, educational level, marital status,
occupation and family
Environmental factors Government support, access to finance,
availability of resources/services, community
consideration, business network
Motivational factors financial motive, intrinsic motive, passion and fear
of failure
Human capital factors education, previous business experience, and prior
knowledge
Behavioural factors epistemological belief, self-efficacy, education and
experience and role model

12. Source: Developed by the Author (2021/2022)
12
The Research Model

13. Owner’s PsyCap positively impacts the SME’s ES.
H1
Owner’s PsyCap positively impacts the SME’s OR.
H2
SME’s OR positively impacts its ES.
H3
Entrepreneurial Propensity mediates the relationship between Self-efficacy and the Transition
to Entrepreneurship.
H4
Age Generation moderates the relationship between Entrepreneurial
Propensity and the Transition to Entrepreneurship.
H5
13
Research Hypotheses

14. Methodology
14
Research Paradigm Positivism
Research Strategy Quantitative
Research Approach Deductive Approach
Research Design Pilot survey
Sample Size 67
Unit of Analysis Individual employee
Sample Technique Proportionate sampling technique
Time Horizon Cross-sectional
Type of Data Primary data
Data Collection Method Survey
Data Analysis Tool Exploratory Factor Analysis

15. 15
Results
Explains 86.4%
variance in TE

16. 16
Results of Factor Analysis
Variable
Item
No
Item (Question)
Factor
Loading
Demographic Factors 1 I believe that marital status is affecting me for transition to entrepreneurship. 0.900
2 I perceive that having children is influencing me to start my own business 0.767
3 I don’t believe that my position in the organization is affecting me to start a my own business 0.915
Environmental Factors 4 I am aware that government policies consistently favor new forms ( e.g. public procument) 0.773
5 If I were to start my own business, I know that the transport related infrastructure facilities (road, rail, air and sea) is in a
favorable situation 0.737
6 If I were to start my own business, I know that the telecommunication facilities is in a favorable situation 0.757
7 If I were to start my own business, I know how to accurately prepare the Income Statement 0.941
8 If I were to start my own business, I know how to prepare the cash flow statement. 0.947
9 If I were to start my own business, I know how to calculate financial ratios. 0.937
10 I have good idea about what will customers prefer most. 0.674
11 I already develop mutually beneficial knowledge sharing relationships with customers by talking to them about their future
requirements. 0.692
12 If I were to start my own business, I would already have developed good relationship with the suppliers. 0.685
13 I am aware that there are an adequate number of government programmes for new businesses 0.742
14 I perceive that the people working for government agencies are competent and effective in supporting new firms 0.719
15
I know that almost anyone who needs help from a government programme for a new business can find what they need 0.657
16 I am aware that new firms can get most of the required permits and licenses quickly 0.742
17 If I were to start my own business, I know that the credit application process is too complex.(R) 0.627
18 If I were to start my own business, I know that the waiting period to get external finance is too long. 0.780
19
If I were to start my own business, I know that the accessibility of energy (electricity, coal power) is in a favorable situation 0.532
20 If I were to start my own business, I know that the accessibility of transportation (to transport raw materials, finished
products etc.) is too difficult(R) 0.649
21 If I were to start my own business, I know that the managing of transportation cost is too difficult(R) 0.567
22 If I were to start my own business, I know that the finding of technically skilled labour force is too difficult(R) 0.754
23 If I were to start my own business, I know that the managing of labour force is too difficult(R) 0.653
(Source: Survey Results, 2021)

17. Results
17
Results of Factor Analysis cont.
Motivational Factors 24 I am motivated to figure out how to make existing products/services better. 0.887
25 Scanning the environment for new opportunities really excites me 0.893
26 Establishing a new company excites me. 0.843
27 If I were to start a new business I am afraid that this is not a valuable business idea 0.903
28 If I were to start a new business I am afraid of disappointing the people who are important to me 0.854
29 If I were to start a new business I am afraid of not being able to manage the business effectively 0.874
30 I beleive that it will make my family rich ,If I were to start a new business 0.863
31 I beleive that I can ensure financial stability of children, If I were to start a new business 0.769
32 I believe that I can clear debts, If I were to start a new business 0.805
Human Capital 33 I believe that the vocational education will help me to start my own business 0.902
34
My exposure in practical learning incurred during non-formal educational activities such as job training, will support me for a new venture. 0.792
35 Engagement in Professional work activities will support me for a new startup. 0.765
36 I have good experience in the business that I am dreaming to start 0.689
37
I believe that the knowledge that I have acquired so far will be more valuable to start my own business than working for a company 0.682
38 I have several prior start-up experiences 0.662
39 I perceive that the prior knowledge of the market aid me in starting new business. 0.701
40 I perceive that the Prior knowledge of ways to serve the market of my new venture 0.654
41 My experience in labor markets will support me for a new venture. 0.401
Behavioural Factors
42 I believe that the best ideas are often the most simple 0.503
43 I understand that I learn things better when I can relate them to my own experiences 0.886
44 I know that even if I learn slowly, I can understand the essence of a topic 0.681
45 I believe that people’s intellectual potential is fixed at birth 0.451
46 I believe that how well I do depends on how smart I am 0.597
47 If I were an entrepreneur , I know that I can rely on the knowledge of my managers (R) 0.863
48 When someone in authority tells me what to do, I usually do (R) 0.753
49 In general, I know everything about practical details required to start a business 0.881
50 The career that I’m pursuing can give me the necessary knowledge to start a business 0.787
51 I am often familiar with the biography of successful entrepreneurs. 0.536
52 I often learn more on how to handle the problems and critical situations from my superiors. 0.564
53 My immediate family would approve of my decision to start a venture capital 0.579
54 I will be able to achieve most of the goals that I have set for myself. 0.846
55 When facing difficult tasks, I am certain that I will accomplish them. 0.883
56 I believe I can succeed at almost any endeavor to which I set my mind. 0.605
57 I personally know some family members of mine who are entrepreneurs 0.845
58 I personally know some friends of mine who are entrepreneurs 0.764
Variable Item No Item (Question) Factor Loading
(Source: Survey Results, 2021)

18. 18
Variable Dimension Indictor Items (Qu. no)
Demographic
factors
Civil Status DF1
Having Children DF2
Position Df3
Environmenta
l Factors
Government Government support
EF1, EF12, EF13, EF3,
EF4, EF5
Access to Finance
Financial knowledge and
skills
EF2,EF6,EF7,EF8,EF9,
EF10,EF11
Availability of
resources/ Services
Availability of Supportive
Services EF14, EF15, EF16
Business Network Market Knowledge
EF17, EF18,
EF19,EF20,EF21
Motivational
Factors
Entrepreneurial
Passion
Motivation for better
outcome
MF1,MF2,MF3
Scanning the environment
Establishment of new
company.
Fear For failure
Potentiality of the idea
MF4, MF5, MF6
Treat of Social Esteem
Financial Security
Economic Motives
Make my family rich
MF7,MF8,MF9
Supplements the family
income
Make money to clear
debts
Variable Dimension Indictor Items (Qu. no)
Human
Capital
Education and
experience
Formal and vocational education
HC1,HC2,HC3
Professional education
Previous
business
experience
Professional work activities
HC4,HC5,HC6
Practical learning incurred during non-
formal
educational activities such as job training
Experience in labor markets
Prior
knowledge
Prior knowledge of a particular market
HC7,HC8,HC9
Prior knowledge of ways to serve a
particular market
Prior start-up experience
Behavioural
Factors
Epistemological
belief
Structure
BL1, BL2
BL3, BL4,
BL5,BL6, BL7
BL8. BL9, BL10R
BL11R,BL12
Speed
Control
Source
Self-Efficacy
Mastery Experiences
BL13, BL4, BL15,
BL16
BL17,
Social Modeling
Social Persuasion
Psychological Responses
(Source: Survey Results, 2021)

19. 19
Results of Validity & Reliability Tests
(Source: Survey Results, 2021)
Factor No of
Items
Measurement of Reliability Measurement of Validity
Internal consistency Convergent validity Discriminant validity
Cronbach’s
Alpha
rho A Composite
Reliability
AVE Factor Loading Fornell &
Larcker
HTMT
Demographic Factors 03 .734 .753 .721 .735 1.081 .589 .511
Environmental Factors 20 .636 .817 .644 .709 10.582 .725 .541
Motivational Factors 09 .832 .839 .900 .752 7.791 .867 511
Human Capital 09 .792 .814 .879 .712 7.573 .843 .597
Behavioral Factors 17 .812 .835 .856 .701 10.462 .946 .494
Criterion >0.6 >0.7 >0.7 >0.7 >0.708 The AVE of a
latent variable
>squared
correlations
between the
latent variable
and other
variables
<HTMT_.85
Reference Griethuijsen et
al.(2015)
Taber (2018)
Henseler et al
(2014)
Hair et al
(2010, 2014)
Fornell &
Larcker (1981)
Hair et al
(2010, 2014)
Fornell &
Larcker (1981)
Chin (2010)
Fornell &
Larcker
(1981)

20. Conclusion
20
• Proposed Scale to measure Employee Transition to
Entrepreneurship
• The future researchers are welcome in validating
the proposed scale by testing in different contexts
such as manufacturing & services, micro, small,
medium & large and national & multinational.

21. The research team acknowledged the facilitation by The Senate
Research and Higher Degrees Committee, Wayamba University
of Sri Lanka for awarding the research grant
(SRHDC/RP/04/19-04)
for reaching this research outcome.
21
Acknowledgement

22. Thank You!