Investigating the Determinants of Green Entrepreneurial Intention:

A Conceptual Model

Chee Wei Loon

and Norfarah Nordin

Faculty of Accountancy, Finance and Business, Tunku Abdul Rahman University College, Malaysia

Graduate School of Business,

Universiti Sains Malaysia, Malaysia

Keywords: Green Entrepreneurship, Malaysia, Intention, TPB, Green Entrepreneurial Intention.

Abstract: Green entrepreneurship is an emerging important agenda in business education as well as economic policy.

It is recognized as a crucial path to green economic growth that is instrumental to sustainability. Despite its

importance, the knowledge about the determinants to nurture the green entrepreneurial intention is still at

infancy. The gaps in literature provide great opportunity for this research. To address these gaps,

investigation on the determinants of green entrepreneurial intention is pursued and explained based on the

Theory of Planned Behaviour in the context of Malaysian MBA students. Educational service provider,

green business community and educational policy makers will be benefited from the findings of this

research as it provides the determinants and insights on green entrepreneurial intention. This will help the

stakeholders of education to align their strategies in developing their business education programs.

1 BACKGROUND OF STUDY

Green entrepreneurship is the backbone to green

economic growth that not only promises job creation

and economic growth (International Labour

Organization, 2013; 2014), but also is considered as

a crucial path to sustainability (Allen and Malin,

2008; Gibbs and O’Neill, 2012; Schaper, 1993). A

green entrepreneur is someone who is committed

towards the effort to adopt environmentally friendly

production such as new technology, into his business

or involve in business that produces environmentally

friendly products (OECD, 2011). Intention to

become a green entrepreneur is a planned behavior.

The event of becoming a green entrepreneur is

therefore a result of an individual’s inclination to

undertake the risk of starting-up a new venture in

green business sector.

In 2008, the total world market for green

products and services was estimated at around

US$1,370 billion and was set to double by 2020

(United Nations Environment Programme, 2008). In

2009, the revenue generated by green businesses

made up 1.38% of Malaysia’s GDP (ILO, 2014),

increased to 2% in 2013 and expected to increase to

8% by 2020 (Adnan, 2013). The Malaysian

government is devoted to pursue green economy, as

reflected in the key agenda of pursuing green growth

for sustainability and resilience in 11

Malaysia Plan

(Economic Planning Unit, 2015). The agenda is set

to be achieved through sustainable consumption and

production concept in government procurement,

adoption of green buildings criteria and green

certification. Government green procurement will be

made mandatory for all government ministries and

agencies. By 2020, it is targeted that at least 20% of

government procurement will be green (Economic

Planning Unit, 2015). Despite strong commitment

from the government, Malaysia has been

underperforming in green economy. Environmental

Performance Index 2016 ranked Malaysia 63

180 countries; the Global Green Economy Index

2016 concluded that Malaysia continued to decline

in green economic performance, especially in the

dimension of markets and investment, despite

continuous pledging of public resources to support

the sector and growing concern of business leaders

and consumers towards for sustainability of present

business and economic model (Tamanini, 2016).

These figures have indicated limited number of

green enterprises being started up in the country.

Loon, C. and Nordin, N.

Investigating the Determinants of Green Entrepreneurial Intention: A Conceptual Model.

DOI: 10.5220/0008488600870092

In Proceedings of the 7th International Conference on Entrepreneurship and Business Management (ICEBM Untar 2018), pages 87-92

ISBN: 978-989-758-363-6

1.1 Entrepreneurial Intention of

Malaysian

In general, statistics shows that Malaysian possesses

low intention to become entrepreneur. Acs, Laszlo

and Autio (2016) found Malaysia ranked 56

among

132 countries based on Global Entrepreneurship

Index, dropped 3 places from 2015, among the top

10 biggest decline of all indexed countries. Global

Monitor of Entrepreneurship (GEM) shows

Malaysian to be among the least interested with

entrepreneurship in ASEAN and worldwide (Singer

et al., 2015). This is supplemented by the lowest

perceived capabilities of Malaysian to achieve

entrepreneurial success in the region, which is in

strong contrast to strong belief of abundant

entrepreneurial opportunities and low fear of failure,

in both ASEAN and worldwide context. GEM

statistics also shows that in 2014, Malaysia had the

lowest nascent entrepreneurship rate, new business

ownership, and early-stage entrepreneurial activity

in ASEAN. The report also showed Malaysian firms

at early-stage entrepreneurial activity were relatively

not innovative among ASEAN competitors, where

only 30% were offering new product to all or some

of its customers, compared to 61% of new

Philippines firms and near to half of new start-up

firms from other ASEAN countries. However, there

is no relevant study so far to clearly show the

intention level of average Malaysian to venture into

green entrepreneurship, hence it is difficult to

determine if Malaysian are equally uninterested with

green entrepreneurship.

1.2 Entrepreneurship Education in

Malaysia

Knowledge is critical to the economic growth of a

country through the investment in education of

human capital (Islam et al., 2016). Therefore,

entrepreneurship education is central to the

development and nurturing of entrepreneurial

characteristics among students, particularly at higher

education institutions (HEIs). A report by the

Ministry of Higher Education Malaysia (MOHE) in

2015 showed tremendous effort in term of capital

investment to develop entrepreneurship education in

Malaysia. As of 2015, entrepreneurship centre had

been established in all HEIs. In the report, 53% of

HEIs in Malaysia had inculcated entrepreneurship

elements in their programs and 57% of HEIs had

incorporated more than 15% of practical elements in

teaching entrepreneurship (Loh et al., 2015). In

2017, the Siswapreneur Showcase 2017 programme

was launched by MOHE to provide a platform and

expose students to the real world of entrepreneurship

so that they would be prepared to put their

entrepreneurial knowledge and skills into practice

(The Star Online, 2017).

However, based on Cheng et al., (2009), there is

a mismatch between the outcomes that is expected

from HEIs’ alumni, for example, their

entrepreneurship knowledge acquisition is rather

unfavorable. Based on this fact, the effectiveness of

the current program can be further improved. The

report by MOHE in 2015 indicates that students and

alumna from HEIs responded that areas to be

improved are the curriculum and delivery of content

by academia. In term of return-on-investment, it was

reported that17% of entrepreneurship centers in

public HEIs generated 30% or more than their

operating budget. Moreover, 39% of the HEIs

reported to benefited half of student population in

entrepreneurial activities. Therefore, the satisfaction

rates on the perceived entrepreneurship ecosystem

among the students were reported to be mediocre

(Hamidon, 2015). As far as green entrepreneurship

is concerned, there is a little indication of direct and

formal integration of green entrepreneurship values

into entrepreneurship education.

2 THEORETICAL MODEL

Green Entrepreneurial Intention (GEI) can be

explained based on the framework of Ajzen's (1991)

Theory of Planned Behavior (TPB). TPB is one of

the most well-known theoretical frameworks for

research related to intention (e.g. Liñán and Chen,

2009; Liñán et al., 2011; Liñán et al., 2011). There

are three fundamental components in Ajzen’s TPB

model: attitudes, subjective norms and perceived

behavioral control, often referred to as cognitive

variables in empirical study (Liñán and Chen, 2009).

Attitudes refer to “the degree to which a person has

a favorable or unfavorable evaluation or appraisal of

the behavior in question” (Ajzen, 1991). Iakovleva

et al., (2011) explained subjective norms as the

perceived social pressure to perform or avoid a

behavior by a person. It can also be defined as a

person’s perception of whether a particular behavior

is important in his or her life (Krueger et al., 2000).

On the other hand, perceived behavioral control

refers to the ability and feasibility to execute a target

behavior (Ajzen, 1991).

TPB is chosen as the theoretical framework for

the proposed research model for a few reasons.

Firstly, based on the theory, green entrepreneurial

ICEBM Untar 2018 - International Conference on Entrepreneurship and Business Management (ICEBM) Untar

intention is associated with attitude of an individual

towards green business, the influence he received

from his social environment, as well as his

confidence level towards own capability. However,

the distinction between green entrepreneurship and

conventional entrepreneurship, is on the motivation

i.e. profit-seeking orientation versus the desire to

contribute to environmental wellbeing (Schaper,

2010). As such, the investigation of intention to

involve in green entrepreneurship focused on both

the psychological components of TPB framework

and matched with ones’ motive to accommodate the

wellbeing of natural environment. Empirically, TPB

has been found highly relevant in entrepreneurial

intention (EI) study. The model of Gelderen et al.,

(2008) explains 38 per cent of variance in EI;

Krueger et al. (2000) found the TPB model explains

35 per cent of variance in EI; and Tkachev and

Kolvereid (1999) has found as high as 45 per cent of

the model variance is explained. In other TPB

models that include entrepreneurship education as

additional independent variable, Liñán et al., (2011)

reported 0.538 of model determination coefficient

(R-squared); the model of Zhao et al., (2005) also

reported 42% explanatory power of the variance in

the entrepreneurial intention. In addition, due to lack

of empirical study in GEI, previous TPB studies in

green behaviour provides a useful insight on the

relevance of the theoretical framework in GEI study,

for instance in a recycling intention study by

Ramayah et al., (2012). Based on structural equation

modeling estimation, the robustness of TPB model

in the green behaviour study is thus evidently

justified.

3 PROPOSED CONCEPTUAL

FRAMEWORK

In this study, the proposed conceptual framework as

per depicted in Figure 1 is adapted from TPB. The

proposed determinants to study GEI are mainly

based on TPB model: attitude, perceived behavioural

control and subjective norm. A new variable -

perceived educational support is included in the

proposed framework to examine the relevance of

entrepreneurship education to intention in green

entrepreneurship. Higher education institutions will

be very much benefited from the knowledge of

knowing which of the cognitive variables play the

paramount influence in green entrepreneurship,

especially with the knowledge of the role played by

existing entrepreneurship education programme. For

the business community, understanding the

determinants to GEI would help the business

managers to effectively cultivate the interest of their

employees to green entrepreneurship, especially in

green business sector itself. For education policy

makers, grasping the determinants to GEI would

facilitate better allocation of educational resources –

teaching personnel, training facilities, start-up

funding etc. to support the effort of education

institutions in green entrepreneurship education,

which is a crucial enabler to the green economic

agenda of the country.

4 SIGNIFICANCE OF STUDY

Green entrepreneurship is the upcoming trend in

business and education. Theoretically, this study will

contribute to green entrepreneurship literature by

providing insights on the determinants of GEI. To

date, there has been little empirical research

pertaining to the determinants of GEI, and the

relevance of TPB in prediction of GEI is

unascertained. This research will contribute

important theoretical foundation to fill the gaps in

literature. Practically, this study will be significant

for education service providers to understand the

underlying factors that could increase the green

entrepreneurial intention among their students,

particularly in higher education sector. With the

understanding of the specific determinants to GEI,

educational policy makers will be able to design and

execute more effective policy to develop green

entrepreneurship education programme. It will also

allow business level entity in the green business

sector to understand and appreciate the key factors

in designing training programme to improve the

entrepreneurial morale of their employees. From a

theoretical viewpoint, the proposed framework will

be an important extension of the application of

Theory of Planned Behaviour (TPB) into the green

behavior domain. It also provides crucial insight for

further understanding of the fundamental differences

between the behavioral reasoning of conventional

entrepreneurs and green entrepreneurs, for the

benefit of predicting the implication of general

entrepreneurial policy towards green

entrepreneurship, and identification of specific

policy alignment necessary for the development of

green entrepreneurial intention.

Investigating the Determinants of Green Entrepreneurial Intention: A Conceptual Model

Figure 1: Proposed Research Framework.

5 CONCLUSION

Green entrepreneurship is crucial to business

community and economic growth. In the long run,

green entrepreneurship will benefit businesses when

more green businesses emerge to support the

adoption of green management practices by ordinary

businesses. On the other hand, knowledge on the

determinants of GEI will enhance the education

service provider’s ability to design better green

entrepreneurship education programme, which helps

the institution to fulfill the demand of business

community for green entrepreneurs, as well as

improving the reputation and ranking of the

institutions in green entrepreneurship programmes,

enabling them to obtain more funding from

government and enrolling more students that will

ultimately benefit the institutions financially. From a

theoretical viewpoint, the literature gap in green

entrepreneurship is largely unfilled. This study will

provide important insights and pave a way for future

empirical study in this emerging domain of

knowledge.

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