Quality Enhancement of Women Entrepreneurs: Impact of Entrepreneurship Development Skills Imparted by HEIs

 

Kanika Dhingra

Assistant Professor, DIAS, Delhi

 

ABSTRACT:

The present study examines the impact of entrepreneurship development skills imparted at HEIs (Higher Education Institutions) and human capital on creation of women entrepreneurship as well as empowering them. The women entrepreneurs having higher education qualifications were surveyed from small and medium enterprises (SMEs) located in north-west India, i.e., Gujarat. The statistical tools, like confirmatory factor analysis (CFA) and structural equation modelling (SEM) were applied for data analysis. Result reveals that human capital which is an outcome education imparted at Universities fully moderates between entrepreneurship development skills thereby arising women entrepreneurship and empowerment in emerging economies like India. Thus, women’s human capital strengthens the relationship of women entrepreneurship and empowerment. The study is confined to examining only women empowerment as a consequence of women entrepreneurship by entrepreneurship development skills taught at HEIs.

 

 

 

INTRODUCTION:

India will be amongst the youngest nations in the world by 2030; with nearly 140 million people in the college-going age group, one in every four graduates in the world will be a product of the Indian higher education system as per the survey conducted by EY. Over the last two decades, India has remarkably transformed its higher education landscape. It has created widespread access to low-cost high-quality university education for students of all levels. With well-planned expansion and a student-centric learning-driven model of education, India has not only bettered its enrolment numbers but has dramatically enhanced its learning outcomes.

 

A differentiated three-tiered university system – where each tier has a distinct strategic objective – has enabled universities to build on their strengths and cater across different categories of educational needs. Further, with the effective use of technology, India has been able to resolve the longstanding tension between excellence and equity. India has also undertaken large-scale reforms to better faculty-student ratios by making teaching an attractive career path, expanding capacity for doctoral students at research universities and delinking educational qualifications from teaching eligibility.

 

In recent years, India has undertaken massive structural and systematic changes that have started to yield encouraging results. The country has been touted to have the best-in-class post-secondary education system at present. Some of the significant factors that have contributed to this growth and can help envision the 2030 dream includes:

·         Expansion of a differentiated university system with a three-tiered formalized structure

·         Transition to a learner-centered paradigm of education

·         Intensive use of technology

·         Reforms in governance

 

According to Datta and Gailey, 2012, the entrepreneurial transformation of Universities and higher education institutes is creating women entrepreneurs. The women entrepreneurs further in society like India are found to be actively involved in collective entrepreneurship as a tool to ensure economic and social empowerment. The intention or drive of an aspiring entrepreneur is strongly influenced by the availability of resources at one’s disposal (Honig, 1998). Entrepreneur’s knowledge base is important in new venture creation. The sustainability and growth of women enterprise is determined by human capital variables consisting of level of education and experience to a great extent (Coleman, 2007). Many social scientists treat human capital as the most critical resource that entrepreneurs possess (Hitt, Biermant, Shimizu and Kochhar, 2001). With the advent of profitable business opportunities, prospective women entrepreneurs with better human capital are in a sound position to recognise and optimally utilise them. Aspiring women entrepreneurs with easy access to quality human capital tend to rely on that capital for smooth commencement and functioning of newly created venture. As women have completely different socialisation experience, there is a general tendency of conceiving their business venture differently (Manolova, Carter, Manev and Gyoshev, 2007). Existence of human capital help woman entrepreneur to commence her new business venture and grow the already existing business firms owned by them.  Eminent entrepreneurship researchers are of the view that easy access to quality sources of finance is vital for entrepreneurship (Kim, Albrich and Keister, 2006). In emerging economies like India, entrepreneurs generally rely on their hard-earned money and financial support from family to meet financial requirements for starting their business (Smallbone and Welter, 2001). Aspiring women entrepreneurs as well as existing ones do face enormous difficulties in procuring funds to finance their venture.

Women entrepreneurs start business enterprise to fulfil their wishes like sense of empowerment.  As and when new business opportunities emerge in an economy there is a growing tendency among aspiring women entrepreneurs to grab those opportunities for uplifting their standard of living, which culminates into greater feeling of life satisfaction. It is a known fact that majority of entrepreneurs regardless of gender start their business venture to accomplish better life satisfaction and derive feeling of self-empowerment. Entrepreneurial orientation among aspiring women entrepreneurs help to promote sense of psychological empowerment, as empowered individuals perceive themselves as more capable of influencing their work in a rational way (Avolio, Zhu, Koh and Bhatia, 2004). If so, there is a higher propensity to put extra efforts, perform autonomously and feel greater commitment to their organisation (Spreritzer, 1995).  Honig (1998) and Kim, Albrich and Keister (2006) presume that the probability of starting business venture and actively pursuing entrepreneurship is affected by the easy availability of requisite resources. Moreover, there are limited studies on women entrepreneurship even in India (Mann and Phukan, 2010). We believe that this study makes two important contributions to the entrepreneurship literature. First, it is need of the hour to critically assess the impact of women entrepreneurship on women empowerment. Second, the role of human capital in the relationship between women entrepreneurship and women empowerment.

 

Hypotheses Formulations:

Human Capital and Women Entrepreneurship:

Entrepreneur’s knowledge base and external assistance are positively related to business venture creation and support from family has a positive impact on conceiving business idea and commencement of business (Chang, Memili, Chrisman, Kellermanns and Chua, 2009). In this regard, Manolova et al. (2007) revealed that growth potential of women owned firm is substantially affected by advantages derived from past experience and also factors influencing growth potential of women owned enterprises differ substantially as compared to male owned firms, due to unique socialisation experience of women. Also, Coleman (2007) reported that women owned firms experience positive effect of tacit human capital including education and experience. Even Bae, Qian, Miao and Fiet (2014) found that an entrepreneur’s education has a positive correlation with entrepreneurial orientation. Chuluunbaatar, Ottavia and Kung (2011) argued that apart from external, internal factors like motivation and educational background can also turn out to be influential factors in start-up decisions. Education and prior experience are the critical components of an entrepreneur’s human capital, which reflect the degree of development of managerial know-how and capability (Becker, 1993). Procurement of financial capital and human capital are the basic difficulties that less educated women entrepreneurs encounter. On these lines, Cetindamar, Gupta, Karadeniz and Egrican (2012) contended that the possibility of a woman becoming an entrepreneur is largely affected by the availability of sound human capital and easy access to social capital, which help aspiring women entrepreneurs to start their enterprise. Thus, in the light of above discussion, we frame the hypotheses:

H1: Entrepreneurship Development Skills leads to Women entrepreneurship positively and significantly leads to women empowerment.

H2: Human Capital moderates the relationship between women entrepreneurship and women empowerment.

 

RESEARCH METHODOLOGY:

The data were collected from 169 registered SMEs owned by women entrepreneurs in the Ahmedabad city of Gujarat. The contacted SMEs were from chemical, dyes, hosiery and textile. Reason for choosing Ahmedabad is that, the population of women is higher as compared to other districts of Gujarat, as per Census 2011, Government of India Gujarat state. For collecting requisite data, a well-structured questionnaire based on five-point Likert scale was framed.

 

For women entrepreneurship three dimensions of entrepreneurial orientation were adopted, i.e., innovativeness, proactiveness and risk taking consist of three items each, generated from Covin and Slevin (1989). On the other hand, degree of empowerment among women entrepreneurs was measured by three dimensions, viz., competence (Jones, 1986), self-determination (Hackman and Oldham, 1980) and impact (Ashforth, 1989), which consist of three items each. Further, for human capital three dimensions were adopted, i.e., learning and education, experience and expertise and innovation and creation (Sharabati, Jawad and Bontis, 2010; Sharabati, 2013)

 

RESULTS AND ANALYSIS:

For confirming fitness, reliability and validity of latent construct CFA was employed. Chi-square statistics was less than recommended 5.0 level and GFI, AGFI, NFI, TLI and CFI values of all measured models exceeded the recommended value of .90 (Inman, Lair and Green, 2009). For ensuring internal consistency of the data composite reliability test was conducted and the value of composite reliability of the latent constructs exceeded .90. Alternative way of testing reliability is through composite reliability and in the present study; the value of composite reliability of all the latent constructs is above .90, which indicate internal consistency of the data. The construct-wise composite reliability is shown in Table 1. Further, validity of the scale has been established through construct validity, which includes convergent validity (Lim and Ployhart, 2006) and discriminant validity (Fornell and Larcker, 1981). Convergent validity has been confirmed through factor loading and average variance extracted and in the present study, convergent validity gets established as majority of factor loadings and average variance extracted are above .50 (Table 2). Discriminant validity analysis is estimated to examine the degree to which a construct is distinct from other constructs (Hair, Black, Babin, Anderson and Tatham, 2009). Table 3 shows that each explained variance estimate on the diagonal is greater than the corresponding inter-factor squared correlation estimates below the diagonal (Malhotra, 2007). Thus, discriminant validity gets established, thereby implying that major constructs are unique.

 

Table 1: Reliability and Validity of Latent Constructs

S. No.	Constructs	Average Variance Extracted	Composite Reliability	Cronbach’s Alpha
1.	Women Entrepreneurship	0.992	.991	.790
2.	Women Empowerment	0.992	.993	.736
3.	Human Capital	0.961	.990	.823

 

Table 2: Descriptive Statistics of Measurement Models

Construct	Mean	S. D	SRW	t-Value
1. Women Entrepreneurship
(a) Innovativeness
Focus on tried product	4.30	.464	0.659	3.892
Launched new product line	4.25	.439	0.856	4.539
Radical changes in product line	4.05	.677	0.776	-
(b) Risk-taking
High risk apatite	4.50	.506	0.830	5.216
Goal oriented	4.48	.506	0.761	4.901
Aggressive exploitation of opportunities	4.40	.591	0.839	-
(c) Proactiveness
Imitativeness in action	4.53	.506	0.930	2.239
Initiative oriented	4.53	.506	0.858	2.291
New product and technology introducer	4.30	.564	0.372	-
2. Women Empowerment
(a) Competence
Self Confidence	4.25	.494	0.503	--
Self Assurance	4.10	.841	0.909	4.176
Mastery Over Work	4.08	.859	0.952	4.212
(b) Self-determination
Self Autonomous	4.48	.506	0.795	5.832
Decision Making Capability	4.45	.552	0.864	6.319
Work Freedom	4.50	.555	0.878	--
(c) Impact
Self Impact on Work	4.35	.770	0.957	--
Control Over Firm	4.35	.736	0.904	8.352
Influence Over Firm’s Routine	4.20	.723	0.503	3.681
2. Human Capital
(a) Learning and Education
Sufficient competence level	3.84	1.02	0.780	14.45
Co-operation	4.37	0.67	0.796	14.35
Pervasive learning	4.28	0.74	0.806	-
(b) Education and Experience
Self pride	4.03	0.67	0.495	8.93
Cost effectiveness	3.65	0.89	0.489	8.83
Better productivity	4.32	0.64	0.872	-
Higher profitability	4.29	0.58	0.770	12.37
(c) Innovation and Creation
Innovative ideas	3.56	1.05	0.815	11.67
Launching new product	3.90	0.98	0.795	11.52
Contentment with policies	3.98	0.95	0.819	11.70
Effectiveness of innovativeness on productivity	4.29	0.56	0.591	-
Effectiveness of innovativeness on profitability.	4.36	0.54	0.599	9.53

Note: S. D. = Standard Deviation; SRW= Standard Regression Weight

 

 

 

Table 3: Discriminant Validity of Latent Constructs

AVE	Women Entrepreneurship	Women Empowerment	Human Capital
Women Entrepreneurship	(0.992)
Women Empowerment	.247	(0.992)
Human Capital	.164	.223	(.961)

Note: Average Variance Extracted (AVE) on the diagonal and squared multiple  

correlation between constructs below the diagonal.

 

The study tested hypotheses by using SEM and hierarchical regression. The SEM results reveal that women entrepreneurship promoted women empowerment in emerging economy like India (β=.536, p=.000). Thus, women empowerment is the resultant outcomes of women entrepreneurship. Hence, lead to the acceptance of hypothesis H1. Hierarchical regression analysis was performed by assessing the R-square change in each model. The block-wise procedure results in four models, i.e., Model 1-4 (Table 4). Model 1 consists of only control variables, Model 2 comprises of control variables and independent variable, Model 3 includes moderator also and lastly, Model 4 comprises of interaction between women entrepreneurship and human capital. The full model (Model 4) reveals that human capital moderates the relationship between women entrepreneurship and women empowerment (β=.254, p=.000). This leads to the acceptance of H2. Figure 1 represents the hypotheses results.

 

Figure 1: Moderating Role of Human Capital between Women Entrepreneurship and Women Empowerment

 

Table 4: Test of Moderation

Control Variables	Model 1	Model 2	Model 3	Model 4
Firm’s Establishment	.055 (.29)	.056 (.28)	.063 (.21)	.059 (.24)
Size of firm	-.059 (.34)	-.059 (.33)	-.026 (.67)	-.020 (.74)
Firm’s Investment	-.021 (.74)	-.012 (.85)	-.006 (.92)	-.004 (.94)
Age of Women Entrepreneurs	.074 (.15)	.073 (.15)	.060 (.22)	.056 (.25)
Independent Variable
Women Entrepreneurship		.512 (.000)	.428 (.000)	.541 (.007)
Moderator
Human Capital			.233 (.000)	.328 (.000)
Interaction
Women Entrepreneurship* Human Capital				.254 (.000)
R2	.013	.041	.091	.164
∆R2	-	.028	.050	.073
Adj R2	.002	.028	.076	.083
F-Value	1.22 (.301)	3.23 (.007)	6.31 (.000)	7.96 (.000)

 

CONCLUSION:

The main objective of the study is to find out the effectiveness of women entrepreneurship in promoting women empowerment in emerging economies. The result reveals that women entrepreneurship has a crucial role in accelerating women empowerment i.e., women entrepreneurship leads to women empowerment. This result falls in line with existing studies like Datta and Gailey (2012). On the other hand, human capital strengthens the relationship between women entrepreneurship and women empowerment. Autonomy and flexible working hours help them perform their work with ease which consequently creates sense of inner feeling of empowerment among women entrepreneurs as they feel mentally empowered to give practical shape to their business idea into a profitable business venture. Moreover, strong entrepreneurial drive, experience and education enable them to outperform in their career, which gets reflected in the performance of their firm. Good performance of their firms in terms of revenue earning and innovation motivates them to compete in today’s market environment and make them feel empowered to undertake any activities. 

 

MANAGERIAL IMPLICATIONS:

This study contributes to the existing field of literature by studying how women entrepreneurship helps women to develop sense of empowerment. The result of the present study has certain implications which require urgent attention of government, academicians, concerned policy makers and society at large. This finding will go a long way in helping government agencies to formulate suitable policies for encouraging and promoting entrepreneurship skills among women in India. Women coming from business family in Gujarat receive easy social acknowledgement, but first-generation women entrepreneurs encounter many hurdles to start-up and run their independent business. Therefore, social acceptance needs to be accorded to young women entrepreneurs for their encouragement. Financial institutions and friends are hesitant to extend financial support to aspiring women entrepreneurs. Government agencies and financial institutions need to change their perception about the ability of aspiring women entrepreneurs. Time has come to give equal consideration irrespective of any gender discrimination while providing loans by financial institutions. To further accelerate the growth of women entrepreneurship interest subsidy scheme needs to be launched by centre and state government to convince young women entrepreneurs to avail loan facilities from financial institutions. Easy access to financial resources and prompt social acknowledgement helps women to embark upon their chosen career path which eventually make them confident and empowered.

 

FUTURE RESEARCH DIRECTIONS:

The present study has certain limitations, which need to be addressed by future research. Firstly, study is confined to women empowerment only as the outcome of women entrepreneurship but there may be other constructs as outcomes like financial performance and life satisfaction of women entrepreneurs. Thus, future research needs to incorporate these limitations for further refinement of existing literature. Secondly, the study collected data from Ahmedabad in Gujarat, where business friendly social environment inspires prospective women entrepreneurs to choose entrepreneurship as their career but the generalisability of our results needs to be examined in other environmental context.

 

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Received on 29.04.2019         Modified on 15.05.2019

Accepted on 19.06.2019      ©AandV Publications All right reserved