Proceedings of 5th Asia-Pacific Business Research Conference
17 - 18 February, 2014, Hotel Istana, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-44-3
Identifying Supporting Factors of Student Entrepreneurship
Intention: A Case Study of Palembang City, Indonesia”
Sari Lestari Zainal Ridho*, Dewi Fadila**, Yusleli Herawati***, Achmad
Leofaragusta K.****
The policy should be implemented by the government in order to expand the
employment or to extend the labor market, one of the way, is entrepreneurship. That
is why the Ministry of National Education and Culture of Indonesia supports this
policy through the Student Entrepreneurial Program. This study aims to identifying
and analyze the supporting factors that determine the interest of students to engage
in student entrepreneurship program in the Palembang city, Indonesia. The method
used is quantitative analysis. Primary data was collected using questionnaires and
analyzed with the multiple linear regressions. The result of this study, obtained from
the processed of the respondents data, concluded that the student in Palembang City
experience has a number of supporting factors determine their entrepreneurship
intention, namely: autonomy, economic challenge, selfrealize, social environment,
perceive confidence, academic support, social support, and freedom of work.
Field of Research: Economics
1. Introduction
Entrepreneurship has a major contribution in the economy of many countries. Entrepreneurship
has a very significant role in moving the nation's economy. This is due to the entrepreneurial job
creation, improvement of income distribution, as well as improved quality of life and well-being of
society.
Many developing countries make entrepreneurship as their economic base. Even in the United
States and Japan, a solid economy built by entrepreneurial-based economy.
A country is said to have stability when the economy has at least 2% of the total population of
entrepreneurs (McClelland, 1961). Thus, the policy should be implemented by the government is
expanding the employment or extending the labor market, and entrepreneurship is one of the
way. That is why the Ministry of National Education and Culture of Indonesia supports this policy
through the Student Entrepreneurial Program. This study aims to analyze and identifying the
supporting factors that determine the interest of students to engage in student entrepreneurship
program in the Palembang city, Indonesia.
*Sari Lestari Zainal Ridho, S.E., M.Ec., Departement of Bussiness Administration, Politeknik Negeri Sriwijaya, Palembang.
Email: arie_zr@yahoo.com
**Dewi Fadila, S.E., M.M., Departement of Bussiness Administration, Politeknik Negeri Sriwijaya, Palembang. Email:
dewifadila21@yahoo.com
***Yusleli Herawati, S.E., M.M., Departement of Bussiness Administration, Politeknik Negeri Sriwijaya, Palembang.
Email:leli_kosim@yahoo.com
Achmad Leofaragusta K., S.E., Departement of Bussiness Administration, Politeknik Negeri Sriwijaya, Palembang
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Proceedings of 5th Asia-Pacific Business Research Conference
17 - 18 February, 2014, Hotel Istana, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-44-3
Student Entrepreneurial Program is intended to facilitate students who have an interest and
aptitude to start entrepreneurship with science, technology and art basis, that is being studied
(Dikti.net). The program provides education and training for entrepreneurship internships,
business planning, capital and business mentoring support. Through this program are expected
to support the vision and mission of the government in realizing national independence through
empowerment of SMEs and job creation.
Within the implementation of this creation entrepreneurship program, students face various
problems and obstacles, which in turn, the majority of students program participant could not
develop the business continuity. This led to the conclusions that students can not create jobs and
are still interest in becoming job seekers. The data collected from the Labor Department showed
that at Palembang during the period 2008-2011, there is an increasing number of job seekers
with a Diploma and Bachelor degree holders (Disnaker Palembang, 2012). This indicates that the
Higher Education institution graduates still showed a tendency to be job seekers.
Based on the above discussion, it is necessary to investigate, especially in order to know the
factors that affect the interests of Student Entrepreneurial Program participant to become an
entrepreneur. formulation of the problem in this study are as follows: (1)What supporting factors
affect interest of Student Entrepreneurial Program grantees to become entrepreneurs? and
(2)What are the dominant supporting factors affect the interests of Student Entrepreneurial
Program grantees to become entrepreneurs?
2. Literature Review
Theoretically, entrepreneurship leads to job growth (Henley, 2002; Hipple, 2010). Hence,
enlargement of labor market is a possibility. Entrepreneurship is a process of creative and
innovative in moving resources from low productivity level to a higher level of productivity with the
aim of achieving well-being of individuals, communities and the environment (Lupiyoadi, 2004).
Entrepreneurship is a creative and innovative capabilities that form the basis of, tips and
resources to find opportunities for success (Suryana, 2003). So it can be interpreted as an
entrepreneurial business activities (production and distribution of goods and services to satisfy
human needs) is conducted by business organizations through creative and innovative processes
in resource-using existing resources to achieve success and prosperity .
Entrepreneurship Performers are often referred to entrepreneur. The definition of entrepreneur is
a decision maker and are the people who have the ability to take risks that help the formation of a
free economic system firms (Longenecker, Moore and Petty, 2001). Entrepreneurs are people
who are creative and innovative and be able to make it happen for the improvement of the
welfare of themselves and their environment (Lupiyoadi, 2004). A creative person is a person
who has the ability to create something new or something that has not been available before.
While said to be innovative if ones is able to make something different from the existing ones.
Entrepreneurial intention is a person interest to a particular object. Intention or Interests may
imply a tendency to feel attracted or compelled to pay attention to someone, something or
activities in specific areas (Loekmono in Mahesha, 2012). While the interest in entrepreneurship
is a desire, interest and willingness to work hard or strong-willed for independent or trying to fullfil
their needs without fear of the risks that will happen, and always learning from failures (Santoso
quoted from Mahesha, 2012).
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Proceedings of 5th Asia-Pacific Business Research Conference
17 - 18 February, 2014, Hotel Istana, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-44-3
Being entrepreneur requires courage in facing the uncertainty and risk. Praag and Cramer (2002)
explicitly said that the role of risk in decision making for someone to be an entrepreneur. The
courage to deal with the risks that are supported by a strong commitment will encourage
entrepreneurs continuity to struggle to find the opportunities in achieving their objectives. The
goals were to be clear and objective, and it is a feedback for their business success(Suryana,
2003).
In the preliminary studies, the results showed that the majority of students participating in the
Student Entrepreneurial Program have an interest to become an entrepreneur are influenced by
the level of tolerance for high risk factors. Unfortunately, since it is not accompanied with
entrepreneurship skills, so that the success achievement of Student Entrepreneurial Program are
still low. In another preivous study on entrepreneurship motivation in Business Administration
departement student (Ridho & Setiawan, 2010), shows that the majority of students who
responded are interested in becoming entrepreneurs, despite the driving factor that varies.
Various empirical studies related to the factors that affect the interests of entrepreneurs have
been conducted, including that works that have been done by Wibowo ( 2011) , suharti & Siren (
2011) , Son ( 2012) , Kadarsih , et al ( 2013) , and Muhar ( 2013). Wibowo ( 2011) , conducted a
study to determine the factors of internal , external , and instruments learning readiness that
affecting the vocational college students in Surakarta. The findings of this studies is that internal
factors , external factors, learning factors , and instrument readiness factors, simultaneously
have a positive and significant impact on the student entrepreneurship interest after graduation .
Suharti & Sirine ( 2011), conducted a study that aimed to investigate the factors that affect
student interest to pursue the entrepreneurship . The factors that are analyzed consist of internal
factors, attitudes factors on entrepreneurship and contextual factors . Using accidental sampling
technique, the results of this study demonstrate the significance of the attitude factors, namely
autonomy and authority, self-realization factor, the confidence factor, and security factors, in
influencing student interest in entrepreneurship . This study also proved the importance of the
role of contextual factors, such as academic support, social support, to student entrepreneurship
intentions .
Putra ( 2012) , conducted a study that aimed to examine the factors that determine management
student interest in entrepreneurship. Using sampling techniques accidental sampling , and factor
analysis , the results of this study shows that there are six factors that determine management
student interest in entrepreneurship, namely: environmental factors, self-esteem factors,
opportunity factors, personality factors, vision and confident factors .
Kadarsih, Susilaningsih, and Sumaryati ( 2013) conducted a study that aims to determine student
interest in entrepreneurship on Economic Education Program, Teacher Training and Education
Faculty of the University of March 11. This study used the factor analysis tecnique, and the
variables are: self-efficacy, freedom to work, visionary, expertise, availability of capital and social
environment , contextual, and perceptions on entrepreneurship figures .
Muhar ( 2013) conducted a study that aimed to
understand the student interest in
entrepreneurship in order to introduce how to set up and run entrepreneurship to students. using
variables: personality, environmental and demographic and entrepreneurial interests . The
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Proceedings of 5th Asia-Pacific Business Research Conference
17 - 18 February, 2014, Hotel Istana, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-44-3
purposive sampling method was used, one of this study results found that the dominant factors
affecting entrepreneurial interest is access and gender .
This study differs from previous research in the use of empirically data analysis methods and
variables used , partly or entirely, as well as the objects of this research focus on students
participated in the Student Entrepreneurial Program.
3. Methodology
The research conducted is an application of research or applied research, which is a descriptive
research. The data collection methods were use literature studies and survey. Respondents in
this study were students entrepreneurial program grantees. This research was conducted at the
State Polytechnic of Sriwijaya and other institutions of Higher Education which participated in
Student Entrepreneurial Program. Using saturated samples technique, respondents in this study
are the entire student population. In order to identify the determining factors as we have
disscussed above, we used questionnaire research instruments.
The units of analysis or the objects of this study are students participated in the Student
Entrepreneurial Program and received the grant from that program, which is studying in the
higher education institution at Palembang city, Indonesia. The numbers of samples used are as
shown in the Table 1 below:
Table 1
The Respondent
Higher Education Institution
Sriwijaya University
State Polytechnic of Sriwijaya
PGRI University
Muhammadiyah University
Bina Darma University
IAIN Raden Fatah
Total
Number of Student
42
40
1
2
2
15
102
The variables used in this research are independent and dependent variables. We used
entrepreneurship Intention as the dependent variable, while the independent variables are:
autonomy, economic challange, security, avoid responsibility, self Realize, social environment,
perceive confident, academic support, social support, entrepreneurial environment,
entrepreneurial intention, risk tolerance, self success, freedom of work. For each variabel the
number of indicator used are diverse. Using the interval scale as measurement scale we choose
the Likert scale consisting of four grading scale, namely: strongly disagree, disagree, agree and
strongly agree.
The study was conducted with the validity and reliability testing instrument. The data were then
analyzed using simple linear regression and t-test, after undergone validity and reliability data
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Proceedings of 5th Asia-Pacific Business Research Conference
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processed. The questionnaire validity test was conducted using Pearson's Product Moment
Correlation formula, while the measurement reliability using Cronbach's Alpha. The methods of
implemented this research was: literature study and survey.
4. The Findings
In the early stages the data were processed in order to test the validity and reliability, by
comparing calculated value of r and the tabulated r value. The tabulated r value for sample of
students was 0.1220. Based on the results of validity and reliability we can say that the entire
statement of all variables have calculated r value of r greater than tabulated r value. Hence, This
meant that all statement items valid and reliable. Based on the statistical analysis, the results is
as shown in the following tables:
Table 2
Calculated r Value Autonomy Variable
Item pernyataan
r hitung
Autonomy 1
0,508
Autonomy 2
0,717
Autonomy 3
0,672
Autonomy 4
0,692
Autonomy 5
0,680
Autonomy 6
0,728
Table 3
Calculated r Value Economic Challenge Variable
Item pernyataan
r hitung
Economic Challenge 1
0,354
Economic Challenge 2
0,585
Economic Challenge 3
0,553
Economic Challenge 4
0,499
Economic Challenge 5
0,495
Economic Challenge 6
0,399
Economic Challenge 7
0,519
Table 4
Calculated r Value Security Variable
Item pernyataan
r hitung
Security 1
0,413
Security 2
0,689
Security 3
0,608
Security 4
0,462
Security 5
0,324
Table 5
Calculated r Value Avoid Responsibility Variable
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Proceedings of 5th Asia-Pacific Business Research Conference
17 - 18 February, 2014, Hotel Istana, Kuala Lumpur, Malaysia, ISBN: 978-1-922069-44-3
Item pernyataan
Avoid responsibility 1
Avoid responsibility 2
Avoid responsibility 3
r hitung
0,239
0,199
0,349
Table 6
Calculated r Value Self Realize Variable
Item pernyataan
r hitung
Self realize 1
0,467
Self realize 2
0,604
Self realize 3
0,554
Self realize 4
0,558
Table 7
Calculated r Value Social Environment Variable
Item pernyataan
r hitung
Social environment 1
0,591
Social environment 2
0,562
Social environment 3
0,482
Table 8
Calculated r Value Perceive Confident Variable
Item pernyataan
r hitung
Perceive confident 1
0,579
Perceive confident 2
0,719
Perceive confident 3
0,789
Perceive confident 4
0,625
Table 9
Calculated r Value Academic Support Variable
Item pernyataan
r hitung
Academic support
0,406
Academic support
0,633
Academic support
0,619
Academic support
0,423
Table 10
Calculated r Value Social Support Variable
Item pernyataan
r hitung
Social support 1
0,745
Social support 2
0,793
Social support 3
0,791
Table 11
Calculated r Value Enterpreneurial Environment Variable
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Proceedings of 5th Asia-Pacific Business Research Conference
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Item pernyataan
Enterpreneurial environment 1
Enterpreneurial environment 2
Enterpreneurial environment 3
Enterpreneurial environment 4
r hitung
0,637
0,633
0,659
0,279
Table 12
Calculated r Value Enterpreneurial Intention Variable
Item pernyataan
r hitung
Enterpreneurial intention 1
0,335
Enterpreneurial intention 2
0,430
Enterpreneurial intention 3
0,427
Table 13
Calculated r Value Risk Tolerance Variable
Item pernyataan
Risk tolerance 1
Risk tolerance 2
Risk tolerance 3
Risk tolerance 4
Risk tolerance 5
r hitung
0,491
0,616
0,379
0,554
0,593
Tabel 14
Calculated r Value Self Success Variable
Item pernyataan
r hitung
Self succes 1
0,379
Self succes 2
0,402
Self succes 3
0,402
Self succes 4
0,236
Self succes 5
0,356
Table 15
Calculated r Value Freedom of Work Variable
Item pernyataan
r hitung
Freedom of work 1
0,467
Freedom of work 2
0,408
Freedom of work 3
0,493
Freedom of work 4
0,617
Freedom of work 5
0,629
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Proceedings of 5th Asia-Pacific Business Research Conference
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Table 16
Calculated r Value Entrepreneurship Intention Variable
Item pernyataan
r hitung
Entrepreneurship Intention 1
0,336
Entrepreneurship Intention 2
0,574
Entrepreneurship Intention 3
0,628
Entrepreneurship Intention 4
0,625
Entrepreneurship Intention 5
0,540
Furthermore, the validity of the test has also been conducted by comparing the Cronbach's
Alpha. A variable is said to be valid, if the Cronbach's Alpha variable rate is greater than 0.6, so
that next testing can be run. Based on the results of the data processing, there are three
variables that have coefficient Cronbach's Alpha smaller than 0.6, hence it can not be included in
the next data processing or further testing. The three variables that must be reduced were avoid
responsibility variable with Cronbach's Alpha 0.273, entrepreneurial intention variable with the
Cronbach's Alpha 0,585 and self variable success variable with Cronbach's Alpha 0.293. Results
of the validity test (Cronbach's Alpha) of every studied variables is shown in the following table:
Table 17
Cronbach’s Alpha
Variabel
N of item
Cronbach’s
Alpha
Autonomy
6
0,734
Economic challenge
7
0,762
Security
5
0,735
Avoid responsibility
3
0,273
Self realize
4
0,740
Social environment
3
0,719
Perceive confident
4
0,841
Academic support
4
0,724
Social support
3
0,885
Enterpreneurial environment
4
0,730
Enterpreneurial intention
3
0,585
Risk tolerance
5
0,754
Self success
5
0,293
Freedom of work
5
0,750
entrepreneurial intention
5
0,765
Validitas
Valid
Valid
Valid
Invalid
Valid
Valid
Valid
Valid
Valid
Valid
Invalid
Valid
Invalid
Valid
Valid
In the data processing, it will be seen, from the result, whether there is a relationship
between each independent variable with the dependent variable partially by looking at the
correlation between the two variable. The correlations between each independent variable with
the dependent variable are as seen in the following table:
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Proceedings of 5th Asia-Pacific Business Research Conference
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Table 18
Non Parametric Correlations
Variable
Correlation
Coefficients
With Entrepreneurial
Intention Variable
0,322
0,370
- 0,007
0,001
0,000
0,943
Avoid responsibility
Self realize
Social environment
Perceive confident
Academic support
Social support
Enterpreneurial environment
0,056
0,275
0,440
0,583
0,442
0,323
0,143
0,572
0,005
0,000
0,000
0,000
0,001
0,147
Enterpreneurial intention
Self success
Freedom of work
0,284
0,314
0,388
0,004
0,001
0,000
Autonomy
Economic challenge
Security
Sig
Significant
Significant
Not
Significant
Significant
Significant
Significant
Significant
Significant
Significant
Not
Significant
Significant
Significant
Significant
Table 18, shows the data Non- Parametric Correlations that is resulted from the correlation
analysis data processing. Based on those data, there are two independent variables that are not
correlated with student entrepreneurship intention variables, namely security and entrepreneurial
environment variable. This conclusion is supported with the fact that correlation coefficient value
of -0.007 and a significance value of 0.943, which is larger than 10 % ( not significant ), with that
acquisition value of the correlation coefficient, it can be said that the security variables have no
relation to entrepreneurship intention variable. Similarly, enterprenerial environment variable also
do not has a relationship with a entrepreneurship intention variable, as data in Table 18 shows
that the correlation coefficient value of 0.143 with significant value of 0.147 which also exceed 10
%.
Relying on the result of validity and reliability test, as well as the correlation coefficient whic have
been performed , hence the data processing can be conducted by using regression for the valid
and reliable variables. The regression test results shown in the following table:
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Proceedings of 5th Asia-Pacific Business Research Conference
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Table 19
Variables Entered/Removed
Model
1
Variables Entered
t_freedomofwork,
t_socialsupport,
t_economicchalenge,
t_academicsupport,
t_autonomy, t_selfrealize,
t_socialenvironment,
t_perceiveconfidenta
Variables
Removed
.
Method
Enter
a. All requested variables entered.
Table 20
Model Summary
Model
1
Adjusted R Std. Error of
R
R Square
Square
the Estimate
a
.656
.430
.382
2.31165
a. Predictors: (Constant), t_freedomofwork,
t_socialsupport, t_economicchalenge,
t_academicsupport, t_autonomy, t_selfrealize,
t_socialenvironment, t_perceiveconfident
Based on Model Summary in Table 20, the R value is 0.656 shows that the correlation or
relationship entrepreneurship intention with the independen variables is closely related. This is
because the value is above 0.5. The influence of the independent variables (freedom of work,
social support, economic challenge, academic support, autonomy, selfrealize, social
environment, perceive confident) large enough to the entrepreneurial intention variable, this is
reflected by the coefficient of determination (R2) of 0.430. Means, the variation rate of work
freedom, social support, economic challenge, academic support, autonomy, selfrealize, social
environment, perceive confident can explain the variation of entrepreneurial intention by 43%,
and 57% is explained by other variables outside the model.
While the adjusted R square value is 0.382. This means that 38.2 percent of the variation of
entrepreneurship intention can be explained by the variation of the eight independent variables.
And the remaining, 61.8 percent is influenced by other variables outside the model.
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Proceedings of 5th Asia-Pacific Business Research Conference
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Nevertheless the above model meets the criteria of a good fit model because it has passed
several tests (realibility, validity, and correlation). The coefficient are signs as expected, that there
is a positive effect of the variables value of freedom of work, social support, economic challenge,
academic support, autonomy, social environment, confident and perceive the negative effect of
variable selfrealize.
Based on the F test, the value of the F statistic is 8.879 with a significance level of 0.000. It
means, all independent variables in the model have a significant effect on entrepreneurial
intention at 95% confidence level, even at the level of 99%. The significance of the eight
independent variables are also indicated by the value of the probability F = 0.0000  0.05 (i.e. the
value of  = 5%), and even a probability value of F = 0.0000  0.01 (i.e. the value of  = 1%).
Because the probability of significance is much smaller than 0.05 then the regression model can
be used to predict student interest in entrepreneurship. Or it could be said that the variables
Autonomy, Econonic Challenge, Self Realize, Social Environment, Perceive Confident, Academic
Support, Social Support and Freedom of Work jointly affect student interest in entrepreneurship.
Table 21
ANOVA
Sum of
Squares
Model
1
Mean
Square
df
Regression
379.554
8
47.444
Residual
502.310
94
5.344
Total
881.864
102
F
8.879
Sig.
.000a
a. Predictors: (Constant), t_freedomofwork, t_socialsupport,
t_economicchalenge, t_academicsupport, t_autonomy, t_selfrealize,
t_socialenvironment, t_perceiveconfident
b. Dependent Variable: t_intention
Based on the output of the data processing which is shown in Table 22, the regression model can
be written as follows:
Y = 3,469 + 0,028 autonomy + 0,078 economic challange – 0,147 self realize +0,181 social
environment + 0,424 perceive confident + 0,217 academic support + 0,144 social support +
0,121 freedom of work
Constants value of 3.469 declared that without any influence of the eight independent variables
(Autonomy, Econonic Challenge, Self Realize, Social Environment, Perceive Confident,
Academic Support, Social Support and Freedom of Work), the students.entrepreneurship
intention is 3.469
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Table 22
Table Coefficients
Unstandardized
Coefficients
Model
B
Std. Error
1
(Constant)
3.469
2.577
t_autonomy
.028
.073
t_economicchalenge
.078
.096
t_selfrealize
-.147
.134
t_socialenvironment
.181
.179
t_perceiveconfident
.424
.148
t_academicsupport
.217
.106
t_socialsupport
.144
.098
t_freedomofwork
.121
.077
a. Dependent Variable: t_intention
Standardized
Coefficients
Beta
.037
.085
-.115
.116
.336
.189
.126
.142
t
1.346
.391
.812
-1.100
1.015
2.867
2.054
1.480
1.571
Sig.
.018
.070
.042
.027
.031
.005
.043
.014
.012
Based on the coefficient / regression parameters, authonomy coefficient is positive, it is in
accordance with the previous finding. The authonomy Regression coefficient of 0.028, meaning
that for each additional 1 point of Autonomy will increase student entrepreneurship of intention of
0.028, assuming a constant value of other variables.
Based on the coefficient / regression parameters, Economic challenge coefficient is positive.
The Economic challenge Regression coefficient of 0,078, meaning that for each additional 1
point of Economic challenge will increase student entrepreneurship of intention of 0,078,
assuming a constant value of other variables.
Based on the coefficient / regression parameters, Self realize coefficient is negative. Self realize
Regression coefficient of -0,147, meaning that for each additional 1 point of Self realize will
decrease student entrepreneurship of intention of -0,147, assuming a constant value of other
variables.
Based on the coefficient / regression parameters, Social Environment coefficient is positive. The
Social Environment Regression coefficient of 0,181, meaning that for each additional 1 point of
Social Environment will increase student entrepreneurship of intention of 0,181, assuming a
constant value of other variables.
Based on the coefficient / regression parameters, Perceive confident coefficient is positive. The
Perceive confident Regression coefficient of 0,424, meaning that for each additional 1 point of
Perceive confident will increase student entrepreneurship of intention of 0,424, assuming a
constant value of other variables. Based on the coefficient / regression parameters, Academic
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Proceedings of 5th Asia-Pacific Business Research Conference
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support coefficient is positive. The Academic support Regression coefficient of 0,217, meaning
that for each additional 1 point of Academic support will increase student entrepreneurship of
intention of 0,217, assuming a constant value of other variables
5. Conclusions
This study aims to identifying and analyze the supporting factors that determine the interest of
students to engage in student entrepreneurship program in the Palembang city, Indonesia. The
result of this study, obtained from the processed of respondents data, concluded that the student
in Palembang City experience has a number of supporting factors determine their
entrepreneurship intention, namely: autonomy, economic challenge, social environment, perceive
confidence, academic support, social support, and freedom of work. This factors should be
developed, maintained and enhanced in order to create the entrepreneurial intention, and the
entrepreneurial econmy can be established in a nation. It is reccomended for the government to
implement the policy that support the increase of student entrepreneurial intention, by improved
the student entrepreneurial program to alter the student mindset in term of entrepreneurship.
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