Perceived Institutional Environment and Entrepreneurial Behavior: The Mediating Role of Risk-Taking Propensity and Moderating Role of Human Capital Factors

Abstract

With an emphasis on combining individual and environmental factors in entrepreneurship, this study aims to explore the relationship between the perception of the institutional environment, risk-taking propensity, and start-up readiness by drawing on the institutional theory and human capital theory. This study collected data online and finally got 580 respondents aged 18 to 40. Through SmartPLS software, results reveal that perceived regulatory and cognitive environments influence risk-taking propensity, and risk-taking propensity influences start-up readiness. Moreover, prior entrepreneurial experience positively moderates the relationship between risk-taking propensity and start-up readiness. However, we do not find the direct and moderating effects of entrepreneurship education. This study theoretically contributes to institutional theory, human capital theory, and entrepreneurial behavior with a self-developed construct –“start-up readiness.” This study also provides practical implications for educators and policymakers based on the findings. This study was limited to one personality trait and future research could examine other traits. In addition, more future studies can adopt this measurement scale to measure the entrepreneurial behavior of people in different regions and other human capital factors are worth studying in future research.