Extending the Theory of Planned Behavior in Predicting Intention of

International Entrepreneurship: An Empirical Study in Indonesia

Sabrina O. Sihombing, Liza Handoko and The Fennie Saputra

Business School, Universitas Pelita Harapan, Indonesia

Keywords: International Entrepreneurship, Theory of Planned Behavior, Personal Values, Global Mindset, Cultural

Intelligence.

Abstract: The intention of entrepreneurship is one of the topics of research that has been carried out. However, not much

research has focused on international entrepreneurial research. This study fills this gap and further

examination by applying the extended theory of planned behavior. Specifically, the theory adds personal

values (i.e., religion, democracy, and harmony) as antecedents of attitude. Furthermore, the extended of theory

also includes global mindset and cultural intelligence as predictors of intention, in addition to attitudes,

subjective norms, and perceived behavioral control as three main predictors of intention in the model of the

origins of planned behavioral theories. Data was collected from 250 private university students. Before the

data is analyzed using structural equation modeling, reliability and validity tests are carried out first. The

results show that four of the eight hypotheses are supported. Discussions, conclusions, limitations, and

recommendations for future research are presented in this paper.

1 INTRODUCTION

Entrepreneurship is one of the main efforts that can

support a country's economy. The importance of

entrepreneurship encourages the government to make

entrepreneurship as one of the subjects introduced in

the world of education from the beginning to college.

The introduction of entrepreneurship from an early

age aims to instill entrepreneurial spirit into everyday

life in order to overcome the world of labor

competition and be able to create employment

opportunities for themselves.

In connection with research on entrepreneurship,

entrepreneurial intentions or the intention to become

entrepreneurs is one of the variables that attract many

researchers (e.g., Ozaralli & Rivenburg 2016;

Sihombing, 2016; Dogan, 2015; Hattab, 2014;

Kuttim et al., 2014; Peng et al., 2012; Sihombing,

2012; Campo, 2011; Frazier, 2011; Zain et al., 2010;

Turker & Selcuk, 2008; Van Gelderen et al). Not only

that, several theories such as the theory of planned

behavior (e.g., Tsordia, & Papadimitriou, 2015;

Sihombing, 2014; Brannback et al., 2007; Linan and

Chen, 2006; Krueger et al., 2000), the theory of self-

regulation (e.g., Bendassolli et al. 2016), and theory

of trying (e.g., Sihombing, 2011; Brannback et al.,

2007) are used as the basis for predicting

entrepreneurial intentions. However, not much

research focuses on international entrepreneurial

intentions. In fact, technology is recognized as the

main factor that makes the world boundless and

boundary so that businesses should be able to reach

the whole world. Therefore, this research fills a gap

in the need for research on the focus of international

entrepreneurial intentions. Furthermore, this study

uses the framework of the theory of planned behavior

by adding variables of personal values, cultural

intelligence, and global mindset..

2 LITERATURE REVIEW

International Entrepreneurial.

Entrepreneurial intention or intent in general is

defined as a state of mind directing a person's

attention, experience and action towards a specific

goal, or a path to achieve a business goal.

Entrepreneurial action has been linked to "intentional

behavior” (Joseph, 2017). International

Entrepreneurship (IE) is defined as "the discovery,

enactment, evaluation, and exploitation of

opportunities - across national borders - to create

future goods and service". The concept of

Entrepreneurial intentions displays the characteristics

Sihombing, S., Handoko, L. and Saputra, T.

Extending the Theory of Planned Behavior in Predicting Intention of International Entrepreneurship: An Empirical Study in Indonesia.

DOI: 10.5220/0008430502970303

In Proceedings of the 2nd International Conference on Inclusive Business in the Changing World (ICIB 2019), pages 297-303

ISBN: 978-989-758-408-4

297

of someone’s attitude, skills, environmental

influences and also psychological characteristics (Jie

and Harms, 2017).

Global Mindset.

As one fairly new concept, there are many definitions

of global mindset (Hitt et al., 2007). This paper uses

the definition proposed by Hitt et al. (2007, p.3) that

global mindset is a set of individual attributes that

empower individuals to influence individuals,

groups, and organizations originating from various

social/cultural/ institutional systems. There are three

components that are implied from the definition of

global mindset, namely intellectual capital, social

capital, and psychological capital. Specifically,

intellectual capital refers to the knowledge and ability

in understanding different cultural contexts. Social

capital, on the other hand, refers to an internal and

external relationship with intercultural contexts.

Psychological capital consists of individual's positive

psychological profile and its personality.

A global mindset is important, especially for

entrepreneurs. This is because technology and

globalization make the world boundless. However,

local culture is still inherent in people in the region,

so it is important to understand people from different

cultures at the intellectual and emotional level.

Culture directs the way we dress, how we

communicate, the food we eat, and many other things.

Thus, a global mindset will help us to appreciate

differences between cultures. Entrepreneurs who

have a global mindset are able to see situations from

various perspectives and are able to develop trusting

relationships with individuals from different cultures,

so that good business cooperation can be achieved.

Cultural Intelligence.

Cultural intelligence can be defined as one’s capabi-

lity to be successfully adapting in a new culture which

is an unfamiliar attribute in term of cultural context

(Earley et al., 2007). Cultural Intelligence enables a

person to conduct an appropriate behavior in a

new/foreign culture. The higher the cultural

intelligence that someone has the greater knowledge,

motivation, executive efficiency, and experience in

conducting international entrepreneurial activities.

Furthermore, there are four facets of cultural

intelligence: cognitive facet, motivational facet,

behavioral facet, and a process facet. Cognitive facet is

related to someone's personality, social identity, and

social roles. Motivational facet focuses on someone's

self-efficacy and motives. Behavioral facet requires

action or execution and not just knowledge, thus a

higher level of cultural intelligence would have a

stronger international entrepreneurial intention.

Process facet is related to someone’s capability to store

and characterized new experiences (Jie and Harms,

2017).

Theory of Planned Behavior.

This theory extends the theory of reasoned action

(TRA; Azjen and Fishbein, 1980). In dealing with the

limitation from the original model in explaining

behaviors over which people have incomplete

control, theory of planned behavior is developed

(Ajzen, 1991). Hypothetically, this theory proposes

that one's action is influenced by behavioral intention

which constructed by attitude toward behavior,

subjective norm, and perceived behavioral control.

(Figure 1). These three aspects, attitude, subjective

norms, and perceived behavioral control are defined

as follow. Attitude is defined as people’s overall defi-

nition of their performing behavior. Subjective norms

are related to people’s perception of social pressure

when a certain behavior is carried out, as of perceived

behavioral control, it’s a person’s expectancy of the

Figure 1: Theory of planned behaviour.

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Figure 2: The Research Model.

behavior performed that is within his/her control

(Ajzen, 1991).

This research extended theory of planned

behavior by adding Indonesian values as antecedent

of attitude toward becoming international

entrepreneurs. The adding of Indonesian values as a

representation of personal values. Values underlie our

attitudes; they are the basis for our evaluations

(Schwartz, 2012). Furthermore, the value-attitude-

behavior hierarchy is proposed by Homer and Kahle

(1988). This hierarchy explains that values shape the

attitude of someone who then this attitude will be

represented in behavior.

3 RESEARCH METHODOLOGY

All indicators in this study come from previous

studies. Specifically, indicators for international

entrepreneurial intentions, attitudes, subjective

norms, perceived behavioral controls, and global

mindset derived from Jie and Harms (2017).

Furthermore, indicators for cultural intelligence were

based from Miocevic and Karanovic (2012), and

indicators for personal values (i.e. religion,

democracy, and harmony) were sourced from

Sihombing (2016). Research model can be seen in

figure 2.

Table 1: Reliability Analysis.

Extending the Theory of Planned Behavior in Predicting Intention of International Entrepreneurship: An Empirical Study in Indonesia

299

Table 2: Results of the exploratory factor analysis.

4 DISCUSSION AND RESULTS

4.1 Result

Data was collected through questionnaires distributed

both personally and internet. A total of 250

questionnaires were obtained for further processing.

Profile of respondents can be described as follows.

More than half of the respondents were male (53%).

The age range of respondents is in the range of 19 to

23 years and more than half of respondents are 20

years old (58%). Furthermore, about two-thirds of

respondents had entrepreneurial experience (66%).

More than half of the respondents (53%) also

mastered at least 2 languages. The rest, respondents

master more than 2 languages (47%).

After assessing the reliability and validity of all

measures, the next step is to examine a hypothesis

test. Structural equation modelling is applied to test

the structural relationships between variables. The

results of structural equation modelling analysis are

presented in Table 3 which show that only three of the

seven hypotheses are supported (CMIN/DF = 1.688,

GFI = 0.889, CFI = 0.934, TLI = 0.912, RMSEA =

0.053).

Table 3: Structural Relationships.

4.2 Discussion

The main objective of this study is to broaden the

theory of planned behavior by adding personal values

(i.e., religion, democracy, and harmony) as

antecedents of attitude. Furthermore, the expansion of

theory also includes global mindset and cultural

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300

intelligence as predictors of intention, in addition to

attitudes, subjective norms, and perceived behavioral

control as three main predictors of intention in the

model of the origins of the theory of planned

behavior. The results show that four of the eight

hypotheses are supported.

Of the 3 variables (namely religion, democracy,

and harmony) as representations of the values of

Indonesian society and their relationship with

attitudes, only the relationship between democracy

and attitudes is not significant (H2). Furthermore,

three main predictors (i.e. attitudes, subjective norms,

and behavioral controls perceived) in the original

theory of planned behavior, there are two variables

that do not have positive relationship with intention.

The two variables are attitude (H6) and perceived

behavioral control (H7). Two variables (i.e., global

mindset and cultural intelligence) were added as

predictors in the theory of planned behavior. The

results show that the two additional variables have a

significant relationship with the intention of

international entrepreneurship. However, the

connection between cultural intelligence and the

intention of international entrepreneurship has a

different direction than that hypothesized so that the

hypothesis is not supported (H8).

The insignificant relationship between personal

values of democracy and the intention of international

entrepreneurship can be explained that democratic

values are not the main thing that influences a

person's attitude towards international

entrepreneurship. However, two other elements in

personal value (i.e. religion and harmony) give

significant results. This is because Indonesian people

are known to be religious communities where

believing God is the first principle of the Indonesian

nation. Likewise, harmony is believed to be the

values adopted by the Indonesian people in social life.

Of the three original predictor variables of

intention in the theory of planned behavior, the results

show that two predictor variables (i.e. perceived

behavioral attitudes and controls) do not have a

significant relationship with intention of international

entrepreneurship. These results indicate that

respondents 'intentions for international

entrepreneurs are not derived from the respondents'

internal factors (i.e. attitude and perceived behavioral

control). However, the results show that respondents'

intention for international entrepreneurship is

influenced by one's perception of the suggestions or

pressures of others close to him in order to realize or

not realize his intentions.

Two variables were added to the theory of planned

behavior as predictors of the intention of international

entrepreneurs. The two variables are global mindset

and culture intelligence. The results show that these

two variables have a significant relationship with the

intention of international entrepreneurs. However, the

relationship between culture intelligence and the

intention of international entrepreneurs is different

from that hypothesized. Specifically, the relationship

between the two variables in this study is negative. So

that it can be stated the more cultural intelligence that

is owned, the more it is not intended for international

entrepreneurs. This can be explained as follows.

Someone who is able to understand foreign culture

does not necessarily want to do business in the area /

region / country. This is because the person is able to

detect the possibility of a challenge or obstacle that

might occur such as bribery behavior that might be

common in the area / region / country that can hinder

planned business.

5 CONCLUSIONS

This study aims to predict international

entrepreneurial intentions by applying the extended

of the theory of planned behavior. The results show

that there four out of eight hypotheses are supported

in this research. Specifically, harmony and religion

are two significant predictors of attitude toward

becoming an entrepreneur. Furthermore, global

mindset and subjective norms are two significant

antecedents of international entrepreneur intention.

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