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The linkage between economic literacy and students’ intention of starting business: The mediating role of entrepreneurial alertness

Author

Listed:
  • Agus Wibowo

    (Dr. M.Ed, Position: Lecturer, Institution/Organization: Faculty of Economics, Universitas, Negeri Jakarta, Jl. Rawamangun Muka, Jakarta Timur, 13220, Indonesia)

  • Bagus Shandy Narmaditya

    (M.Ed., Ph.D., Lecturer, Institution/Organization: Faculty of Economics and Business, Universitas Negeri Malang, Jalan Semarang 5 Malang, 65145, Indonesia)

  • Ratieh Widhiastuti

    (Dr. M.Si, Lecturer, Institution/Organization: Faculty of Economics, Universitas Negeri Semarang, Sekaran, Kec. Gn. Pati, Kota Semarang, Jawa Tengah 50229, Indonesia)

  • Ari Saptono

    (Prof. Dr. M.Ed, Lecturer, Institution/Organization: Faculty of Economics, Universitas Negeri Jakarta, Jl. Rawamangun Muka, Jakarta Timur, 13220, Indonesia)

Abstract

PURPOSE: Enhancing the number of entrepreneurs is a major study to combat economic and social problems. Psychological factors considered as effective stimulants for entrepreneurial behavior have attracted many researchers in the last decade. The purpose of this research attempts to examine how the influence of economic literacy can promote the intention of starting a new business among students and explore the role of entrepreneurial alertness in mediating this relationship. METHODOLOGY: The research adopted a quantitative approach in which hypotheses were statistically estimated using partial least square structural equation modeling (PLS-SEM) based on survey data using a self-administered questionnaire (n=450) from several universities in Indonesia. FINDINGS: The analysis indicates that economic literacy has a significant effect on students’ entrepreneurial alertness and intention to start a new business. Indeed, entrepreneurial alertness can mediate the relationship between economic literacy and the intention of starting a new business. However, among entrepreneurial alertness dimensions, scanning and search failed in determining the students’ intention of starting a new business. IMPLICATIONS: The result of this research can provide insight into the literature on the entrepreneurship theme and policymakers concerned with delivering new business creation. Besides, educational institutions can consider the matter of economic literacy to be part of their curricula in order to foster the students’ intention of starting a business. In addition, economic literacy also needs to be associated with examples relevant to entrepreneurial activities, especially in production, distribution, and online marketing. ORIGINALITY AND VALUE: The interesting findings of this paper serve as a reminder that entrepreneurial alertness is one of the predictor variables and mediators for raising the students’ intention. This implies that entrepreneurial alertness can be enhanced by economic literacy, as well as how they need to be used to improve course curriculum and the teaching pedagogy. Furthermore, educational institutions could provide business internship programs and entrepreneurship incubators to raise the students’ intention of starting business.

Suggested Citation

  • Agus Wibowo & Bagus Shandy Narmaditya & Ratieh Widhiastuti & Ari Saptono, 2023. "The linkage between economic literacy and students’ intention of starting business: The mediating role of entrepreneurial alertness," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 19(1), pages 175-196.
    • Handle: RePEc:aae:journl:v:19:y:2023:i:1:p:175-196
    DOI: 10.7341/20231916
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    References listed on IDEAS

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    3. Tullio Jappelli, 2010. "Economic Literacy: An International Comparison," Economic Journal, Royal Economic Society, vol. 120(548), pages 429-451, November.
    4. Chaoyun Liang, 2019. "How Entrepreneur Personality Affects Agrirural Entrepreneurial Alertness," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 15(1), pages 147-170.
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