Family support, psychological capital, and start-up formation

Abstract

The influence of family support and psychological capital (PsyCap) is a topical discourse in entrepreneurship studies due to the unsupportive and turbulent environments most entrepreneurs operate in. However, studies concluding on the nature and direction of family support and PsyCap effects on start-up formation appear scant. This study aims to empirically examine family support effects on start-up formation with psychological capital (PsyCap) as a mediation factor. Specific emphasis was given to extended family support. The study utilized the partial least square (PLS) method for hypotheses testing with cross-sectional data collected from 261 randomly sampled trainees in an entrepreneurship training program organized by the Delta State Ministry of Youth Development. The PLS analysis showed that family support (β = 0.317, p = 0.000) and PsyCap (β = 0.202, p = 0.000) have a significant positive effect on start-up formation. The results proved that family support and PsyCap are valuable antecedent factors for positioning entrepreneurs to engage and thrive productively in the start-up formation process. Furthermore, PsyCap did not mediate the significant positive effect of family support on start-up formation (β = 0.235, p = 0.000; β = 0.103, p = 0.052). This result demonstrates that family support may not be enough for PsyCap to transmit its significant positive effect on start-up formation. Hence, there is a need to procure other alternate support from formal or informal settings.

Keywords

• entrepreneurs
• extended family
• family
• Nigeria
• psychological capital
• start-up