The effect of entrepreneurship education programs on entrepreneurial competencies and intentions

Transcription

1 Bachelor Thesis The effect of entrepreneurship education programs on entrepreneurial competencies and intentions Nicole Vooijs Supervisor: Laura Rosendahl Huber Faculty of Economics and Business University of Amsterdam July 2010

2 Table of contents 1 Introduction 2 2 Competencies Traits Entrepreneurial traits Traits and learning Skills Entrepreneurial skills Skills and learning Attitude and intention towards entrepreneurship Empirical research Difference-in-difference analysis The program Data Sample Measurement of competencies and intention Competencies Intention 15 5 Results Competencies Traits Skills Intention.22 6 Discussion Limitations 24 8 Conclusion 25 9 Bibliography Appendix.31 1

3 1 Introduction It is widely accepted that entrepreneurship enhances the economy. Empirical research has shown that entrepreneurship creates employment, innovation and economic growth (Praag and Versloot, 2007). Policy makers (in Europe and the United States) are aware of the importance of stimulating and promoting entrepreneurship, and believe this can be done through education (Kurakto, 2003; Oosterbeek et al, 2010). Entrepreneurial education has become a hot topic and we observe a trend in which a wide variety of entrepreneurial programs are implemented at schools, especially in higher education. Also in primary and secondary schools entrepreneurship education is emerging, following the belief that childhood and adolescence is the ideal stage to acquire knowledge and foster a positive attitude towards entrepreneurship (Peterman and Kennedy, 2003). The underlying idea is that entrepreneurship can be taught, and/or at least encouraged, through education (Kurakto, 2003). Acquiring specific areas of theoretical knowledge (like marketing, accounting and other market related knowledge) is required to engender successful entrepreneurship. It is evident that this type of knowledge can be taught (Hood and Young, 1993; Driessen and Zwart, 1999). However, the discussion remains if entrepreneurs have fixed personal traits that are key for success or that entrepreneurial skills can be learned. A lot of research has been done about the traits required to be successful, focusing on the person of the entrepreneur (see for example Begley and Boyd (1987), Sexton and Bowman (1985), McClelland (1965) and Hood and Young (1993)). This search for a particular personality is also labeled as the trait approach. Opponents of this approach believe that research on the entrepreneur should focus on what a entrepreneur does instead of who he is (Gartner, 1988). There appear to be particular skills that the entrepreneur should possess in order to be successful. The question remains, what the effect of entrepreneurship education programs is on students competencies and intention towards becoming an entrepreneur. In this paper the following questions will be addressed: 1a. Which competencies (traits and skills) are essential to be successful as an entrepreneur? 2

4 1b. Can these competencies be developed through entrepreneurship education programs? 2. What is the effect of entrepreneurship education on the attitude and intention towards becoming an entrepreneur? This paper will try to find an answer to the above questions by looking at an entrepreneurship education program in the Netherlands. This program is offered at the 8 th grade of Dutch primary school. The sample used consists of a treatment group of 105 pupils and a control group of 21 pupils. To measure the effect of the program on the pupils entrepreneurial competencies and intentions, data is used from a questionnaire held before and after the program. This data will be analyzed through a difference-in-differences framework, which will be explained in section 4.1. The paper will proceed as follows. In section 2 the competencies required to become a successful entrepreneur are presented. The distinction is made between traits and skills. It is discussed into what extent these can be learned/acquired. Section 3 discusses the effect of education on the intention towards becoming an entrepreneur. Section 4 provides details about the empirical research of this paper. The methodology, the particular entrepreneurship program and the data are described. The results are presented in section 5 and discussed in section 6. Section 7 highlights the limitations of the study and conclusions are given in section 8. 3

5 2 Competencies To ensure the success of entrepreneurship education programs it is important to know which competencies should be stimulated and developed. A competency is defined by Mirable (1997, p.75) as a knowledge, skill, ability or characteristic associated with high performance on a job sometimes including motives, beliefs and values. Driessen and Zwart (2006) describe it as something a person is really good at, a talent which enables them to do their job well. In the following part, two types of competencies are distinguished: traits and skills. 2.1 Traits A lot of research has been done about the traits required to be a successful entrepreneur. Traits are personal characteristics that make people more or less capable for entrepreneurship (Driessen and Zwart, 2006). First a specification of the traits assumed to be essential for an entrepreneur will follow. Thereafter the extent into which traits can be learned will be discussed Entrepreneurial traits Following from the literature, specific traits seem to be crucial to be successful as an entrepreneur. The traits assumed to be the main characteristics essential for an entrepreneur will be discussed first. These main traits are: risk taking propensity, need for achievement and locus of control. A short explanation about other traits mentioned in the literature, like self-efficacy, need for autonomy, need for power, social orientation, tolerance for ambiguity and endurance, will follow. These are in some extend related to the main traits. Risk taking propensity Risk taking propensity reflects the entrepreneurs predisposition towards risky alternatives (Busenitz, 1999, p.325), like for example, willingness to risk a loss and dealing with uncertainty (Oosterbeek et al, 2010, p.446). A high risk taking propensity seems to be essential in the entrepreneurial process. Assuming that, within this process, entrepreneurs 4

6 consistently face a great amount of risk, are willing to expose themselves to situations with uncertain outcomes and are likely to take chances (Busenitz, 1999, p. 326). However the empirical evidence on this subject is mixed. In his study, Brockhaus (1980, p.519) concluded that entrepreneurs do not distinguish themselves in risk taking propensity compared to managers and general population, being moderate risk takers. Busenitz (1999) argues that the reason there is no difference found, is because entrepreneurs are different from managers in the way they perceive and deal with risk. They may view some situations as opportunities (Vecchio, 2003, p.307) tending to look at them more positively and optimistically, perceiving less risk (Busenitz, 1999). Nonetheless there are studies that confirm that risk taking propensity is essential. Begley and Boyd (1987, p.88) and Steward and Roth (2001, p.150) prove that entrepreneurs have higher risk propensity and perform better than managers. Risk propensity is viewed as an important component within entrepreneurship decision making (Steward and Roth, 2001, p.151) and crucial for success, especially in the early stage companies (Begley and Boyd, 1987, p.90). Need for achievement McClelland (1969) defined need for achievement as a desire to do well in order to attain an inner feeling of personal accomplishment. Successful entrepreneurs are believed to be high achievers, to strive for performance adequately, to compete and set challenging goals. They put in much effort to achieve their goals and value feedback in order to accomplish them (Begley and Boyd, 1987, p.81; Oosterbeek, 2010, p.446). McClelland concluded that a high need for achievement influences the tendency for someone to engage in an entrepreneurial occupation in which the achievement satisfaction can be attained. Other studies also show that entrepreneurs have a higher need for achievement than managers (Steward and Roth, 2007; Begley and Boyd, 1987). Locus of control Locus of control refers to the perceived ability of an individual to influence events in his/her life. Individuals with an internal locus of control believe to be in control of the outcomes of their actions, while individuals with an external locus of control believe these are beyond their control and determined by chance or by others. Research has indicated that people who are internally oriented are more motivated to strive for achievement (Rotter and Mulry, 1965). 5

7 Internally oriented individuals also tend to gather information that is important for determining the outcome, making them more in control and increasing the probability of success of the outcome (Sexton and Bowman, 1985, p.132). This had lead to the vision that entrepreneurs need to have an internal locus of control. Research has shown conflicting results. While Sexton an Bowman (1985) and Begley and Boyd (1987) fail to find a difference between the locus of control of entrepreneurs and non-entrepreneurs, Evans and Leighton (1989, p.532) prove that entrepreneurs have a more internal locus of control. Two traits, also perceived as important for an entrepreneur, are closely related to the concept of internal locus of control. These traits are self-efficacy and need for autonomy. Successful entrepreneurs are expected to have high self-efficacy. This means that they believe in their own ability, feel self-confident and in control of their own success (Oosterbeek et al, 2010, p.446). According to Vecchio (2003), they believe to be capable of performing their roles and tasks. People with high self-efficacy also tend to perceive more opportunities, feel able to overcome obstacles and anticipate successful outcomes. Need for autonomy is assumed to be an underlying motive to become an entrepreneur. Vecchio (2003) describes it as the desire to be independent and self-directing. Oosterbeek et al (2010, p.446) argue that entrepreneurs score high on need for autonomy because it reflects independence in decision making, problem solving and being in control of its own success. Therefore, this competency is closely linked to self-efficacy and internal locus of control. The three main traits were discussed above. Other traits associated with entrepreneurship (need for power, social orientation, tolerance for ambiguity and endurance) will now be specified. Need for power Need for power, also mentioned as dominance in the literature, is the need to have control over others by influencing and directing their behaviors. Successful entrepreneurs have a high need for power, knowing how to influence others to reach their own goals (Oosterbeek et al, 2010; Sexton and Bowman, 1985). 6

8 Social orientation Social orientation is about successful entrepreneurs orientation toward making useful connections in order to realize their ideas. These connections are made easily and professionally, focusing solely on their business (Oosterbeek, 2010, p.446). Social competencies, defined by Baron (2000 a,b) as the ability to interact effectively with others, appear to be important for entrepreneurs in order to be successful. Successful entrepreneurs are better at social perception and adaptation to new social situations, which are predictors of financial success (Baron, 2000 a). Sexton and Bowman (1985) found that potential entrepreneurs have significantly higher social adroitness (subtlety and persuasiveness). Baron (2000 b) highlights social perception, social adaptability, impression management, persuasion and influence as crucial competencies within the field of entrepreneurship. He argues that these are skills that can be trained in order to generate and increase social capital. However, social competences are in general seen as traits. Tolerance for ambiguity Tolerance for ambiguity is a trait that influences the manner in which one structures information about ambiguous situations. Persons with high ambiguity tolerance seek unstructured situations and view ambiguity as a desirable and challenging goal (Sexton and Bowman, 1985; Begley and Boyd, 1987). Entrepreneurs turn out to be more tolerant for ambiguity compared to managers (Scheré, 1982, in Sexton an Bowman, 1985). According to Sexton and Bowman, high tolerance for ambiguity seems to be a unique component of entrepreneurial personality. Endurance Endurance is the ability to continue despite of setbacks or objections (Oosterbeek et al, 2010). Entrepreneurs were found to have a higher level of endurance than managers (Mescon and Montanari, 1981, in Sexton and Bowman, 1985) Traits and learning The traits discussed above are part of the so called trait approach of entrepreneurship. Within this approach, the entrepreneur is assumed to be a particular personality type, a fixed state of 7

9 existence (Gartner, 1988, p.48). In general, traits are believed to be stable, neither easy to change nor to learn (Hood and Young, 1993, p.120; Driessen and Zwart, 1999). Therefore traits are assumed not to be affected by entrepreneurship programs (Oosterbeek et al, 2010). However it is still open for debate if personality traits can be transferred by learning (Hood and Young, 1993, p.117). Recent research supports the idea that psychological characteristics can be acquired (Rasheed, 2003 in Löber, 2006). Learning is about discovering and developing oneself (Löber, 2006, p.20). Especially at a young age - from childhood to young adulthood, from primary school to high school - persons develop considerably. Participating in entrepreneurship programs may change trait scores and affect persons selfconfidence and self-perception (Roberts et al, 2001 in Oosterbeek et al, 2010; Souitaris et al, 2007, p.571). A person can learn that (s)he has an entrepreneurial personality (Schmitt- Rodermund, 2004, p. 516). The general expectation that traits are not subject to change (Hood and Young, 1993 and Driessen en Zwart, 1999) still remains. This prediction forms the basis for the first hypothesis: Hypothesis 1: Traits are expected to be stable over time, even after participating in entrepreneurship education programs. 2.2 Skills In most studies only traits of entrepreneurs were of particular interest of research. Other competencies were mostly ignored (Kets de Vries, 1986, in Driessen and Zwart, 1999). However, a few researchers emphasize that the focus has to be on the entrepreneurs behavior, which seems to be in relation to success as well (Lorrain, 1988, in Driessen and Zwart, 1999; Gartner, 1988). It seems important that the entrepreneur possesses certain skills. Skills refer to the demonstration of a particular talent (Mirable, 1997, p.75), to actually doing something (Stoof et al, 2002, p.359). They are about being able to do something (Driessen and Zwart, 2006). First the essential skills required to be successful as an entrepreneur will be specified. Thereafter the behavioral approach together with the effect of education on the development of skills will be discussed. 8

10 2.2.1 Entrepreneurial skills While creating the organization, the entrepreneur has to take on different roles at each stage of the process (innovator, manager, small business owner )(Gartner, 1988, p.26). Therefore each stage requires different skills. Driessen and Zwart (1999) state that the start-up stage requires management skills like market-awareness, creativity and flexibility. In contrast the growth stage requires skills like leadership, planning, controlling, motivating and stimulating people. The following skills will be specified below: creativity, flexibility, leadership and motivating and stimulating people. Creativity Creativity refers to the ability to generate many possible solutions to a particular problem (Vecchio, 2003, p.317) and being able to turn them into new opportunities (Oosterbeek et al, 2010). Successful entrepreneurs are able to adopt views from different perspectives, to try new possibilities and to innovate. Schumpeter (1947) states that the entrepreneur has to be an innovator, which means having the task of getting new things done. In the research of Hood and Young (1993, p.125), successful entrepreneurs mention creativity as an important area within entrepreneurship. They find that creative thinking and visualization are required for successful entrepreneurship. Utsch and Rauch (2000) found a powerful link between innovativeness and venture performance and between innovativeness and achievement orientation. Flexibility Flexibility reflects the ability to adapt to changes observed in the environment (Oosterbeek et al, 2010). To be able to compete successfully entrepreneurs need to react to changes in the market, like new needs of customers or new competitors. They need to be able to handle unexpected events. Leadership According to Marschall (1890, in Praag, 1999, p.318), the entrepreneur should be a natural leader of man. Leadership is required within entrepreneurship in order to lead existing means of production into new channels (Schumpeter, in Praag, 1999, p.320). 9

11 Vecchio (2003, p.322) states that entrepreneurship is leadership within a narrow, specific context, seeing entrepreneurship simply as a type of leadership. After the start up stage, the business moves into a stage where the establishment and management of the more routine aspects of an ongoing concern takes place. Issues that traditionally are more related to successful leadership and management, like managing subordinates attitudes and behaviors, crisis management and designing strategic responses to environmental change, also become important for the entrepreneur. Motivating and stimulating It is critical for an entrepreneur to be able to inspire, stimulate and motivate subordinates, especially with the risky character that surrounds entrepreneurship. The charisma and vision of the entrepreneur are crucial to captivate subordinate interest and communicate his/her vision (Vecchio, 2003, p.315) Skills and learning It is important that entrepreneurs possess certain skills, like those specified above (Driessen and Zwart, 1999). This is consistent with the behavioral approach, where the entrepreneur is viewed in terms of the activities undertaken. According to this approach, Gartner (1988) defines entrepreneurship as the creation of organizations. He follows the idea that the focus should be on what the entrepreneur does instead on who he is. Nevertheless, the personality traits of the entrepreneur are ancillary to the entrepreneurs behavior, directly influencing it. The difference between skills and traits is based on the ability to learn. Skills are in general easy to change and to learn, which means that they can be learned and improved by program participation (Oosterbeek et al 2010 and Driessen and Zwart, 1999). This prediction is generally accepted, and forms the basis for the second hypothesis: Hypothesis 2: Skills are expected to change over time, increasing under the influence of entrepreneurship education programs. 10

12 3 Attitude and intention towards entrepreneurship The aim of promoting entrepreneurship education is not only to enhance the competencies of the students. A complementary goal is to stimulate students and increase their likelihood of becoming an entrepreneur. To fulfill this, it is important to change students attitudes and intentions toward entrepreneurship (Souitaris et al, 2007). In the psychology, intentions are proved to be the best predictors of planned behavior. Intentions in turn are determined by attitudes. In the case of entrepreneurship, attitude toward self-employment is about the personal desire to become an entrepreneur. Therefore, a high positive attitude toward self-employment, indicates that the person is more in favor of selfemployment and increases the intention of becoming self-employed (Souitaris et al, 2007). In their research, Peterman and Kennedy (2003) found that participation in an entrepreneurial education program (in secondary school) positively influenced participants perception and desire of starting a business. Souitaris et al (2007) also prove that entrepreneurial attitudes and intentions (of science and engineering students) were raised due to entrepreneurship programs. Their study showed that the programs trigger and inspire students. Inspiration, involving emotions and change of minds, raises attitudes and intentions and increases the chance that they will become entrepreneur. In contrast, Oosterbeek et al (2010) found a negative impact of an entrepreneurship program on the intention to become an entrepreneur (of vocational college students). They argue that this can be due to the realistic view that students get of what it takes to start an own business. However this can be beneficial in the way that only suitable students (with high levels of entrepreneurial competencies) are triggered and inspired. Based on the research of Peterman and Kennedy (2003) and Souitaris et al (2007) the following hypothesis is formulated: Hypothesis 3: The intention of becoming an entrepreneur is expected to increase due to participation in entrepreneurship education programs. 11

13 4 Empirical research In this study, the effect of entrepreneurship education programs will be analyzed through a difference-in-difference (DID) framework. An entrepreneurship program in the Netherlands is the source of the data used. In this section first the method (DID analysis) is explained. Thereafter more details about the program, the sample and the measurement are discussed. 4.1 Difference-in-difference analysis To measure the effect of entrepreneurship education programs on students competencies and intentions, a difference-in-difference (DID) analysis is used in this paper. This method is a popular way of estimating causal relationships. DID analysis consists of identifying a specific treatment (or intervention). The difference in outcomes before and after the treatment for groups affected by it is compared to this difference for unaffected groups. These unaffected groups do not receive the treatment but experience (some or all) other influences that also affect the treatment group (Meyer, 1995 and Bertrand et al, 2004). By comparing the groups, the external effects are eliminated. This means that the causal effect of the treatment on the outcome remains. In this paper the treatment is an entrepreneurship education program (which will be specified in the next section). The so called treatment group (affected by the treatment) participates in the program. Through two self-assessment questionnaires, competencies and intentions are measured before and after the program. The difference obtained is simply a before-after estimator which may capture other changes that occur in that time span. To correct for these external effects a suitable control group is needed (Oosterbeek et al, 2010). The control group fills in both questionnaires without having participated in the program. The same variables are thus measured, within approximately the same time span as the treatment group. The difference in competencies and intentions before and after the program of the treatment group is compared to the differences of the control group. The difference in the control group reflects the normal development of children at that age. By eliminating this difference in the control group from the difference in the treatment group, the net effect of the treatment (the entrepreneurship education program) remains. 12

14 4.2 The program In this paper the treatment is an entrepreneurship program offered in the Netherlands to the Dutch 8 th grade of primary schools (pupils of 12 years of age). It is an experimental learning program that teaches the basics of entrepreneurship within a realistic context. Besides, it is coordinated by an entrepreneur or someone from business practice (in cooperation with the teacher). During four (half)days the children go through the entrepreneurial cycle of a simulated industry. Divided in teams ( companies ) of 5 to 6 students, they start and run their own business, taking on different leadership roles. Within the four days the children apply for jobs, design, produce, market and sell their products. All the while keeping track of the finances. With the program pupils learn about the (realistic) entrepreneurial process. Meanwhile the aim of the program is to motivate and inspire pupils to think big, search for their entrepreneurial potential and enlarge the knowledge about the business world and key financial concepts. Thereby the program promotes teamwork, leadership and communication. 4.3 Data The data used is collected from two extensive questionnaires (a pre- and post-test) filled in by pupils from the treatment and control groups. From the questionnaire, this research focuses solely on the competencies and intentions Sample The sample used consists of seven 8 th grade classes (including 144 pupils) that participated in the project in fall Six classes situated in Amsterdam and one in Haarlem. Schools choose if they want to participate in the project. All the schools included in this research have chosen to participate. Assuming that schools that make this decision have certain characteristics, makes them comparable. The classes were divided into five treatment classes and two control classes. 13

15 The treatment group consists of five classes, representing 105 pupils in total. These pupils filled in a questionnaire before and after the program. The control group initially consisted of two classes. These were asked to fill in both questionnaires (pre- and post-tests) before starting the program, leaving approximately the same time span between the two questionnaires. However, one of the classes did not fill in the second questionnaire. Leaving the control group with only one class, consisting of 21 students. Ultimately the analysis is based on a total sample of 126 students, of which 21 form the control group (16,67%). The control group is relatively small which requires cautiousness when looking at the results and drawing conclusions Measurement of competencies and intentions Competencies The competencies are measured through self-assessment based on 30 statements. The respondents answer on a seven-point scale to what extent they identify themselves with the statement. The statements are connected to 5 skills and 5 traits that, following from the literature, are important for successful entrepreneurship. Each competency is represented by the sum of three statements (see appendix A). Traits The traits measured are: risk taking propensity, need for power, self-efficacy, social orientation and endurance. Correlation tests were carried out to calculate the Cronbach alpha s. These measure the reliability or internal consistency (interrelatedness) of the statements (Cronbach, 1951; Cortina, 1993). The Cronbach alpha s are maximized when the statements measure the same competency. Assuming that a Cronbach alpha of 0,6 (or higher) indicates reliability, the alpha s of need for power and social orientation turned out to be too low (see appendix A). Because of their low reliability, need for power and social orientation are excluded from the further research. Therefore the study will only focus on the other remaining traits measured. 14

16 Recalling from section 2, we expect traits to be stable over time, even after participation in entrepreneurship education programs. Specific hypotheses for the three traits measured are specified in table 1. Skills The skills measured are: creativity, flexibility, motivating, pro-activity and analyzing/judging. Since analyzing and judging are important skills within leadership, they are also essential for successful entrepreneurship. From the correlation test it follows that the Cronbach alpha s of flexibility and pro-activity are too low (see appendix A). Because of their low reliability, flexibility and pro-activity are excluded from further research. Therefore the study will only focus on the other remaining skills measured. Recalling from section 2, entrepreneurial skills are expected to increase due to entrepreneurship education programs. Specific hypotheses for the three skills measured are formulated in table Intention The intention towards becoming an entrepreneur is measured through two multiple choice questions. One question about what the pupil would like to become in the future. From a list of 22 professions, the pupil is allowed to choose three, one of which is entrepreneur. If the pupil chooses entrepreneur this is scored with 1, otherwise with 0. The other multiple choice question asks if the pupils would like to have their own business in the future. Three answers are possible: no (scored with 0), maybe (scored with 1) and yes (scored with 2). Hypothesis 3 is tested by comparing the difference in intention of becoming an entrepreneur and having an own business within the treatment group with the difference in this intention within the control group. The specific hypotheses are formulated in table 1. 15

17 Table 1. Hypotheses H1a H1b H1c H2a H2b H2c H3a H3b Comparing the difference in risk taking propensity within the treatment group of before and after the program ( RTPt), with the difference in risk taking propensity within the control group ( RTPc), the difference between these two differences ( RTPt - RTPc) is expected to be zero. Comparing the difference in self-efficacy within the treatment group of before and after the program ( SE t ), with the difference in self-efficacy within the control group ( SE c ), the difference between these two differences ( SE t - SE c ) is expected to be zero. Comparing the difference in endurance within the treatment group of before and after the program (END t ), with the difference in endurance within the control group ( END c ), the difference between these two differences ( END t - END c ) is expected to be zero. Comparing the difference in creativity within the treatment group of before and after the program ( CREA t ), with the difference in creativity within the control group ( CREA c ), the difference between these two differences ( CREA t - CREA c ) is expected to be positive. Comparing the difference in motivating within the treatment group of before and after the program ( MOT t ), with the difference in motivating within the control group ( MOT c ), the difference between these two differences ( MOT t - MOT c ) is expected to be positive. Comparing the difference in analyzing/judging within the treatment group of before and after the program ( AN t ), with the difference in analyzing/judging within the control group ( AN c ), the difference between these two differences ( AN t - AN c ) is expected to be positive. Comparing the difference in intention towards becoming an entrepreneur within the treatment group of before and after the program ( ENTR t ), with the difference in intention within the control group ( ENTR c ), the difference between these two differences ( ENTR t - ENTR c ) is expected to be positive. Comparing the difference in intention towards having an own business within the treatment group of before and after the program ( BUS t ), with the difference in intention within the control group ( BUS c ), the difference between these two differences ( BUS t - BUS c ) is expected to be positive. RTPt - RTPc = 0 SEt - SEc = 0 ENDt - ENDc = 0 CREAt - CREAc > 0 MOTt - MOTc > 0 ANt - ANc > 0 ENTRt - ENTRc > 0 BUSt - BUSc > 0 16

18 5 Results In this section the results of testing the hypotheses will be presented. The development of children s (self-assessed) entrepreneurial competencies and intentions within the treatment and control group will be analyzed. This will be done through a comparison of the means of the scale points given to the statements of the pre- and the post-test (table 2). Both within the treatment and control group the effect will be analyzed. Finally, these effects will be compared by means of a DID analysis (explained in section 4.1). The three hypotheses (see table 1) will be discussed. First, hypotheses 1 and 2, regarding the competencies, will be analyzed. Thereafter the intention of becoming an entrepreneur (H3) will be discussed. 5.1 Competencies Traits Following from the literature it is expected that traits are stable over time. Therefore, the participation in entrepreneurship education programs is also expected not to have influence on traits. This means that the difference-in-difference (of the treatment and control group) is expected to be zero (see H1). Risk taking propensity The results in table 2 show that risk taking propensity (which represents the sum of the three related statements) is significantly higher after the program (post-test), within the treatment group. However, the results of the correlation tests show that statement 1 ( I like to take chances ) is less reliable, not being a good measure for risk taking propensity. If this statement is removed from the scale, the Cronbach alpha of the post test increases to a level of 0,7835 (see appendix A). Assuming that with the post-test pupils have a better understanding of the statements, this outcome is important. When comparing the means of the pre- and post-tests of risk taking propensity, removing statement 1, the t-test is not statistically significant (see table 2). This means that 17

19 there is no significant change in risk taking propensity within the treatment group. The same outcome results from the control group. This is in accordance with the expectation that traits do not change over time. The results in table 3 show that the DID between the treatment an control group is not significantly different from zero. Based on these results, hypothesis 1a is supported. From this analysis it seems that the program has no influence on the risk taking propensity of the pupils. Self-efficacy As indicated in table 2, self-efficacy significantly increased within the treatment group. This contradicts the prediction that traits are stable over time. Within the control group there is also a positive difference between the pre- and post-test, which is not statistically significant. When carrying out the DID analysis, the development of the treatment group is shown not to be significantly different from the development of the control group (see table 3). This means that hypothesis 1b is supported. Based on the results, it appears that the program has no significant influence on self-efficacy. Endurance Table 2 shows that both in the treatment and the control group the endurance is significantly higher in the post-test compared to the pre-test. These results imply that children s endurance increases over time. This is in contrast with the expectation that traits do not change. The DID analysis (see table 3) shows that the increase in the treatment group was smaller than the increase in the control group, resulting in a negative DID. This result is statistically significant (with a level of 5%). Based on these results, hypothesis 1c is not supported. It appears that the program has a negative effect on the development of endurance. 18

20 Table 2. Comparison means of pre- and post-tests Traits: Treatment Control Pre-test Post-test N t-value Pre-test Post-test N t-value Risk taking propensity 12, , ,3548** 13, ,1639 Risk taking propensity (excluding statement 1) 8,7442 9, ,2543 9,6667 9, ,9165 Self efficacy 13, , ,6585*** 12, , ,6805 Endurance 14, , ,9088* 14,65 16,8 20 2,2711** Skills: Creativity 13, , ,3384*** 12, , ,9325 Creativity (excluding statement 2) 8,7033 9, ,2054*** 8,1579 8, ,4341 Motivating 14, , ,3978*** 15, , ,7694 Analysing/Judging 13, , ,5515*** 11,85 13, ,6651** Analysing/Judging (excluding statement 2) 8,6333 9, ,7883*** 7,6 8, ,3767 Intention: Entrepreneur 0,3404 0, ,815 0,1429 0, Own Business 1,2527 1, ,0796** 1, ,6227 Traits and skills are the sum of the three related statements *** significant at 1% level, ** significant at 5% level, * significant at 10% level 19

21 Table 3. DID analysis Traits: Treatment Control DID t-value p-value Risk taking propensity 1,0465 0,1667 0,8798 0,8171 0,4158 Risk taking propensity (excluding statement 1) 0,4419-0,5556 0,9975 1,2171 0,2264 Self efficacy 1,2727 1,1111 0,1616 0,2399 0,8109 Endurance 0,5632 2,15-1,5868-2,0818** 0,0398 Skills: Creativity 1,3297 0,7895 0,5402 0,8109 0,4192 Creativity (excluding statement 2) 0,8901 0,2632 0,6269 1,1639 0,247 Motivating 1,0814 0,3684 0,713 0,9975 0,3209 Analysing/Judging 1, ,6629-0,9289 0,355 Analysing/Judging (excluding statement 2) 0,9 0,95-0,05-0,0835 0,9336 Intention: Entrepreneur -0, ,0953-0,1378-1,1543 0,2508 Own Business -0, ,1-0, ,1442 0,8856 Traits and skills are the sum of the three related statements *** significant at 1% level, ** significant at 5% level, * significant at 10% level Skills Based on the literature, the expectation is that skills change over time. Because they can be learned, entrepreneurial skills are expected to increase under the influence of entrepreneurship education programs. This means that the difference-in-difference (of the treatment and control group) is expected to be positive (see H2). 20

22 Creativity Appendix A shows that the second statement related to creativity ( other people characterize me as creative ) is not reliable. Removing this statement increases the Cronbach alpha s to 0,7910 (pre-test) and 0,7244 (post-test). Due to this higher internal consistency, it is better to focus solely on statement 1 and 3. As shown in table 2, there is a highly significant increase in creativity within the treatment group. Within the control group there is no significant difference between the preand post-test. The DID analysis (see table 3) shows a bigger increase in creativity in the treatment group compared with the control group, as expected. However, this result is not statistically significant. Based on this analysis, hypothesis 2a is not supported. The program seems not to have significant influence on creativity. Motivating The motivating skill increases in the treatment group with a significance level of 1%, as shown in table 2. Within the control group the post-test does not significantly differ from the pre-test. The DID analysis shows a positive difference between the treatment and control group (see table 3). However, this difference is not statistically significant. Hypothesis 2b is therefore not supported. It seems that the program has no specific effect on the motivating skill. Analyzing/Judging Analyzing/judging shows a highly significant increase within the treatment group as well as the control group (see table 2). Looking at the Cronbach alpha s (appendix A) it shows that removing statement 2 ( I understand well how problems are structured ) increases the alpha to 0,7295 in the post-test. The alpha of the pre-test falls, but assuming that in the post-test the pupils have better understanding of the statements, this is less important. Statement 2 seems not to be a very reliable measure. If excluded, there remains a highly significant positive difference between the pre- and post-test in the treatment group. In this case the difference in the control group is not significant. In both cases (with and without statement 2), the increase in the treatment group is slightly smaller than the increase in the control group, as shown in table 3. This leads to a negative DID. Although this is not statistically significant, it is the opposite sign of what is 21

23 expected. There is no evidence to support hypothesis 2c. It seems that the program has no effect on the analyzing/judging skill. 5.2 Intention From the literature it is expected that the intention of becoming an entrepreneur increases when participating in an entrepreneurship education program. This means that the outcome of the difference-in-difference analysis is expected to be positive (see H3). The first question regarding intention of becoming an entrepreneur is scored with 1 if pupils choose for entrepreneur and 0 otherwise. The comparison of the means of the preand post-tests of this question is also specified in table 2. The results show that within the treatment group the mean decreases. Although this decrease in intention is not significant, the sign is opposite to what was expected. When looking at the control group, an increase is observed. However this result is not significant. The DID analysis (table 3) indicates a negative DID due to the smaller and negative before-after difference of the treatment group compared to the control group. This result is opposite to the expectation, however it is not significantly different from zero. Hypothesis 3a is not supported. The second question regarding the intention of having an own business in the future is scored with 0 if the pupil s answer is no, with 1 if the answer is maybe and with 2 if the answer is yes. As shown in table 2, comparing the pre- and post-tests within the treatment group results in a significant (5%) decrease in intention of having an own business. Within the control group the difference is also negative, but not significant. The decrease in the treatment group is bigger than the decrease in the control group. This results in a negative DID (see table 3). Although this result is not significant, it is an opposite sign of what was expected. Hypothesis 3b is not supported. 6 Discussion The results presented above show that two hypotheses regarding traits are supported. Hypotheses 1a and 1b, which state that the DID of risk taking propensity and self-efficacy is 22

24 zero, are not rejected. This means that there appears to be no effect of the program on these traits of the pupils. Remarkably, there is a (highly) significant increase in self-efficacy when looking at the before and after estimator (in the treatment group (table 2) and overall (appendix B)). This result contradicts the theory that traits are stable over time. A possible explanation for this outcome may be that people at such a young age still are forming their personality, discovering themselves. This is in line with the theory that on average people develop considerably until an average of 30 years, when traits become stabilized (Roberts et al, 2001, in Oosterbeek et al, 2010). Children may develop a better self-perception and self-confidence (Souitaris et al, 2007) which may also have effect on the self-assessed self-efficacy. However, the development of self-efficacy seems not to occur specifically due to the entrepreneurship program. While the increase in self-efficacy is slightly higher in the treatment group compared to the increase in the control group, the DID estimator is not significant. A significant increase in traits is also observed with endurance. Overall, pupils score higher on endurance in the post-test (see table 2 and appendix B), which implies a positive development of childrens endurance over time. Surprisingly, this increase is significantly smaller in the treatment group when compared to the control group, resulting in a negative DID (H1c is not supported). The increase in endurance that appears to occur to children of this age seems to be interfered by the program. A possible explanation for this fact may be that children that undergo the treatment, create a better self-perception when it comes to endurance. Encountering difficult situations that require endurance during the program, may have given the pupils a more realistic view of their actual endurance level. Oosterbeek et al (2010) remarkably found a similar result. In their similar research, a entrepreneurship education program in post-secondary education (in the Netherlands) is tested through selfassessment. They also found a significant negative DID for endurance. According to them, this result can be explained by the creation of a more realistic self-perception due to the experiences in the program. The hypotheses regarding skills (H2a, H2b and H2c) are not supported. It appears that the program has no effect on the development of skills. While looking at the overall beforeafter effect, it can be seen that there is an increase in all three skills measured (motivating, creativity and analyzing/judging - see Appendix B). This increase is highly significant when looking at the treatment group (table 2), and not significant if looking solely at the control group. However, the difference in increases is not big enough to support the hypotheses. 23

25 While expected that the skills should increase more within the treatment group (resulting in a positive DID), there is not enough evidence to support this statistically. From this analysis it seems that children do not acquire more entrepreneurial skills if participating in the entrepreneurship program. As stated by Oosterbeek et al (2010, p.450), this finding indicates that a program is ineffective. Thus, from these results, the program seems ineffective. The hypotheses related to the intention towards becoming an entrepreneur (H3a and H3b) are not supported. The results show a negative sign when looking at the treatment group, which contradicts the expected increase in intention following from hypothesis 3. The resulting negative DID indicates a tendency of decrease in intention of the pupils within the treatment group. However, it is not significantly different from zero. Apparently, the program has no effect on the intention of the pupils towards becoming an entrepreneur. The aim of stimulating pupils towards entrepreneurship seems not to be reached. An explanation could be that children get a realistic view of what it takes to become an entrepreneur. Children who did not have the desire to become an entrepreneur in the first place seem not to be stimulated by participating in the program. Children may also be too young to be stimulated. Becoming an entrepreneur may seem too far away, not concrete, not capturing the interest of children yet. 7 Limitations The research in this paper is subjected to some limitations. Trying to find the impact of entrepreneurship education programs on entrepreneurial competencies and intentions it focuses solely on one program. The fact that this program is lectured to pupils of the 8 th grade, approximately of 12 years old, is important to consider. Entering adolescence, children develop considerably in many ways. This phase is characterized by developing a sense of oneself as an autonomous individual, searching for ones identity. Developmental psychologists view the middle childhood and early adolescence years as a time of change in the way children view themselves ( ) and try to come to a deeper understanding of themselves and others around them (Eccles, 1999, p.38). On the cognitive level, children develop an increasing ability to think abstractly and reflect on complicated problems. There is an increase in their information-processing and learning skills. The social development is characterized by the importance of social acceptance and influence of the peer-group (Eccles, 1999). 24

26 This research is based on pupils self-assessment. The search they may go through in order to better understand themselves, discovering their own identity, may thus be reflected in the answers given. Besides, children may have the tendency to respond in a socially desirable way (Keenan and Evans, 2009, pp.59-60). Another drawback of the program may be the fact that it is lectured in four half-days. This time span may be too short to develop entrepreneurial competencies considerably. Only six schools (seven classes), limited to the cities of Amsterdam and Haarlem, were included in the research. This limits the possibility to generalize the conclusions. The small sample (consisting of 126 pupils in total) is not equally divided into treatment and control group. The control group (ultimately consisting of 21 pupils) is relatively small which has to be taken into account when analyzing the results. Concluding, the sample may not be a perfect reflection of the whole population. However it gives a good indication of how children react to such a entrepreneurship education program. 8 Conclusion This paper analyzes the effect of an entrepreneurship education program (lectured to pupils of the 8 th grade of Dutch primary school) on entrepreneurial competencies and intentions. In order to find out which competencies are essential to be successful as an entrepreneur, a literature study is used. The effect of the program on the development of competencies and intention towards becoming entrepreneur is analyzed using a difference-in-difference (DID) framework. From the literature it becomes clear that there are two approaches when it comes to entrepreneurial competencies. The trait approach looks for a personality type needed to be successful as an entrepreneur. Research shows that traits like risk taking propensity, need for achievement and locus of control are essential. Followed by self-efficacy, need for autonomy, need for power, social orientation, tolerance for ambiguity and endurance. The behavioral approach emphasizes the importance of the behavior of the entrepreneur, focusing on the skills needed. Creativity, flexibility, leadership and motivating and stimulating people are pointed out by the literature. In this paper a combination of both approaches is emphasized. Both entrepreneurial traits and skills are important in determining the success of an 25