Effect of Entrepreneurial Motivation on Psychological and Social Capital of Youth Fruit Agrienterprises in Nakuru County ()
1. Introduction
Youth between ages of 15 - 24 makes about 16% of the global population [1] . This number is expected to increase by 7% by the year 2030 and by 13% by the year 2065 [1] . This gradual increase in the youth population has led to resource depletion, high unemployment, hunger and economic stagnation among others. It is anticipated that by 2050, one-third of the youth population will live in Sub-Saharan Africa [2] . In Africa youth make up a fifth of the population. In Kenya, youth are persons aged 18 - 35 years as defined by the new constitution [3] . Youth are also the largest population according to the Kenyan census conducted in 2019.
The last census conducted in 2019 reported the youth consisted of 13.7 million (75%) of the Kenya’s 47.6 population. However, majority of them are unemployed. According to a UNDP report (2013), Kenya has the highest number of unemployed youths in East Africa. According to [4] entrepreneurship is one of the ways to reduce unemployment problems among the youth in most countries.
Cognitive theory of entrepreneurship states that success of business primarily depends on motivation [5] , persons state of mind and their attitudes and behaviours. Therefore, to exploit business opportunities, cognitive elements are crucial [6] . Many studies have focused on other cognitive elements like entrepreneurial orientation. However, few studies have been conducted on entrepreneurial motivation, social and psychological capital.
Psychological capital consists of intrinsic resources possessed by an entrepreneur. These resources are hope, self-confidence, optimism and resilience. Entrepreneurs with high psychological capita are optimistic, more inspired and rational that their counterparts with lower psychological capital [7] [8] . Such individuals are also competitive, happier and emotionally intelligent [9] [10] . Moreover, they are social, empathetic, open to criticism and effective in their lives.
Business creation can be by force or deliberate according to [5] . It is because of an identified opportunity or challenges related to unemployment and poverty. From these, creation of business can be “pull” or “push” [11] . Individuals who venture into business because they have seen an opportunity or have passion are pull entrepreneurs. These types are assumed to be more successful in their business ventures and aim more to achieve their goals than financial gain. Entrepreneurs who start business because of challenges of unemployment or poverty are pushing entrepreneurs [11] . These types start business because they have no other alternative and are more likely to fail in their business.
Business creation also depends on the social capital of the entrepreneur [12] . Social capital is social ties that enable entrepreneurs to get both tangible and intangible assets [13] . Social capital has three dimensions; relational, cognitive and structural social capital [14] . Social capital can help entrepreneurs to identify business opportunities, access resources and mobilize financial resources [15] . Few studies have examined the effects of motivation on social and psychological capital. A study conducted by Ephrem et al. [7] revealed that entrepreneurs who are opportunity driven possess significantly higher psychological capital compared to necessity driven entrepreneurs. According to Ramos-Rodriguez et al. [16] , pull type entrepreneurs are more linked to business opportunities as they have social networks.
However, it can be claimed that push type entrepreneurs who start business could build social and psychological capital. The situations which led them to venture into entrepreneurship like unemployment may built their social and psychological capital. Their challenges may make them work hard to avoid failure, or ensure they deal with any challenges and recover from failure because they don’t want to go back to their original situation. Because of this contradicting view and few studies on the mentioned intrinsic factors, this study intended to examine the effect of entrepreneurial motivation on psychological capital and social capital of youth-based fruit agrienterprises in Nakuru County.
2. Literature Review
Psychological capital is a construction that was first introduced in the workplace to symbolize positive psychology [17] . It consists of psychological skills that can be measured, built and controlled to enhance performance [18] [19] . Positive psychological structures include self-efficacy, optimism, hope and resilience [20] . Self-efficacy refers to the confidence in one’s abilities. Hope dimensions include willpower (agency) and road power (pathways) [19] . Willpower is the capacity of a person to set goals, inspire and achieve them [21] . Way capacity on the other hand means the perceived ability to formulate feasible pathways to achieve the desired goals [18] [22] . Optimism is a generalized belief that one will encounter a positive behavioural outcome [21] and this contributes to a degree of resemblance or displeasure [23] . Resilience is the degree to which individuals can recover from traumatic experiences, disappointment and adaptation to change and stressful life events [24] .
According to Eprehem et al. [25] , opportunity-driven entrepreneurs have a significantly higher level of psychological capital than those driven by necessity. Entrepreneurs who are motivated by pull factors are less likely to be over-optimistic than those who are motivated by push factors to create their venture. In addition, people who have strong desirability for self-realization (pull entrepreneurs) have high levels of hope and resilience.
Social capital involves cognitive, structural and relational capital. Cognitive capital refers to the extent to which resources provide a common understanding among individuals [26] . Shared language, a major manifestation of cognitive capital, facilitates the sharing of codes, terms and narrative forms. Structural capital is a form of social interaction ties and it refers to “the strength of the relationships, and the amount of time spent, and communication frequency” between online buyers and sellers. Relational social capital refers to assets that are rooted in interpersonal relationships, such as trust and reciprocity, through a history of interaction between actors [26] . When youth agripreneurs possess relational, cognitive and structural social capital, their business is expected to perform better than those who lack them.
Nieto et al. [27] , conducted a study on the effect of social capital on the discovery and exploitation of entrepreneurial opportunities in Spain. The results indicated that individuals who have established networks with other entrepreneurs are more likely to identify a business opportunity and become an entrepreneur. Pull entrepreneurs are linked with new opportunities because they possess social networks (structural social capital) [16] . Besides, an entrepreneur who possesses social capital can acquire resources and organize efforts necessary for new venture creation. Such individuals can exploit business opportunities. However, it can be argued that the push factors that motivate individuals to embark on an entrepreneurial career could lead them to build a certain amount of psychological and social capital. The trauma situation (lack of jobs and discontent at work) that makes some people establish their businesses (entrepreneurs by necessity) may improve their psychological and social resources.
Fruit business is one of the businesses most ventured into by the youth because it requires low starting capital. Fruit business requires someone to possess these intrinsic drivers because they possibly enhance success. However, many studies have focused on the effects of these agripreneurial factors on other enterprises. Therefore, this study explored intrinsic agripreneurial factors and their effect on the performance of youth-based businesses.
3. Research Methodology
3.1. Study Area
This study was conducted in Nakuru County, Kenya. The county boarders Baringo to the North, Kajiado to the South, Laikipia to the north-east, Bomet to the West, Nyandarua to the East and Narok to the south-west. It lies in longitude 0.3031˚S, and latitude 36.0800˚E. The county has a population of about 2.1 million with youth constituting 33% of the total population [28] . Nakuru county cover an area of 7495.1 km2 and has 11 sub-counties which include Nakuru West, Nakuru East, Njoro, Kuresoi North, Kuresoi South, Molo, Gilgil, Subukia, Naivasha, Bahati and Rongai. The main economic activity in the county is agriculture. Main crops grown are wheat, maize, potatoes and horticultural crops like vegetables and fruits. According to Quarterly Labour Force Survey, business sector in Kenya recorded the highest increase in employment with 111,100 new jobs created in the second quarter of 2021. This trend is also reflected in Nakuru county, especially after corona virus outbreak which caused job losses and which made many people to consume fruits to boost their immunity. The study was conducted in Nakuru East and Nakuru West because they have more youth who sell fruits compared to the other sub-counties (Figure 1).
3.2. Sampling and Data Collection
Multistage sampling was employed when conducting the study. First, selection of Nakuru county was purposively done because it is one of the counties where youth practice agripreneurship. Secondly, Nakuru town West and Nakuru town East sub-counties we selected purposively they have highest population in the county and therefore attract agripreneurship. Similarly, they have major fruit business markets. In the third stage, three wards, Biashara, Nakuru East and Kaptembwo were selected because of the high number of youths who sell fruits. Agripreneurs were then selected from the chosen wards using proportionate random sampling to obtain the sample size.
Semi-structured questionnaires were used to collect data for the study. The questionnaires were composed of both open and close-ended questions and were used as a survey instrument to obtain primary data from the sample. The primary data collected included the motivational factors behind the fruit business venture, the agripreneurs social capital and psychological capital. The fruit business performance in terms of financial and non-financial indicators was also be collected. To ensure the validity of the questionnaire, items in the questionnaire were carefully considered to ensure the collection of relevant information.
The unit of sampling were youth who sell fruits while the sample size was made of youth between 18 - 35 year in Nakuru West and Nakuru East who have sold fruits for a year or more. To obtain the sample size, Yamane [29] was used as the population of the study area was known with certainty. The applied formula was
where; n = Sample size; N = the total population of interest
= 0.05-margin of error (qualitative variables). This gave a sample size of 260 respondents. The proportionate was obtained by adding the total population of the three wards then diving the target population of each ward with the total population as shown in Table 1 and then multiplying with the target sample size to obtain the sample for each ward.
3.3. Empirical Model
PLS-SEM was used to determine the effects of agripreneurial motivation on social and psychological capital. Structural equation model (SEM) was used as it allows both unobserved and observed variables to the incorporated in the same
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Figure 1. Map of Nakuru town East and Nakuru town West Sub-Counties.
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Table 1. Distribution of sample size among the three wards.
Source: County government of Nakuru.
model [30] . It also handles measurement errors within exogenous variables which have several indicators using Confirmatory Factor Analysis (CFA). Similarly, SEM allows multiple linear regression between independent variables to be analysed simultaneously, allow multiple path analysis, asses the fitness of the overall model and also direct and indirect effects which cannot be done by traditional regression method of analysis. In addition, the model offers measures of fit to assess the entire model [31] . The general question model used consisted of measurement and structural models:
(1)
(2)
where Y is the vector of p observed variables in a considered study (p > 1), ν is the vector of observed variable mean intercepts the p × 1 vector of observed variable mean intercepts, Λ is the p × q matrix of factor loadings, η is q × 1 latent factors assumed in it (q > 0), ε the vector of p pertinent residuals (error terms), α is the q × 1 vector of latent variable intercepts, B is a q × q matrix of latent regression coefficients and ξ is the q × 1 vector of corresponding latent disturbance terms.
From the above general Equations (1) and (2), the structural equation model for the two factors; necessity motivation (ξ1), opportunity motivation (ξ2), with manifest endogenous variables social capital and psychological capital (Y1, Y2) was modelled as follows:
(3)
(4)
The general matrix expression is given in the following equation:
(5)
where;
and
(Table 2).
In Equation 5 above, Y1, Y2 is the manifest endogenous variables (psychological capital and social capital), α1 is the latent intercepts,
are the coefficient vectors for the linear effects of n latent predictors, ξ1 are the latent factors and finally
is the latent disturbance. The direct effects of motivation on psychological and social capital are shown in Figure 2.
4. Results and Discussion
This chapter presents results and discussion of the findings effect of entrepreneurial motivation on psychological and social capital. It is assumed that both necessity and opportunity motivation have a direct effect on the items of social (structural cognitive and relational social capital) and psychological capital (hope, self-confidence, optimism and resilience) of youth who are involved in fruit agrienterprise.
4.1. Direct Effect of Entrepreneurial Motivation on Psychological and Social Capital
It is assumed that agripreneurial motivation (opportunity and necessity) directly affect the items of psychological capital (self-confidence, hope, resilience and optimism) and social capital (cognitive, relational and structural) of the youths who sell fruits as shown in Figure 3.
4.2. Reliability and Validity Tests of the Construct
Convergent validity is realized when a group of indicators of a construct represents a single underlying construct or converge Hair et al. [31] . Cronbach’s alpha (CA), rho A and the composite reliability (CR) were used to test the relia
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Table 2. Summary of variables in objective two.
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Figure 2. Structural equation model for direct effects.
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Figure 3. Direct effect of entrepreneurial motivation on psychological and social capital.
bility of the constructs. CA values ranged between 0.528 - 0.811, meeting the threshold of 0.5. The CR values ranges 0.761 and 0.877, exceeding the minimum threshold of 0.70 [31] . rho A values ranged between 0.577 and 1. Therefore, reliability and internal consistency was achieved as evidenced by the results in Table 3.
To assess the convergent validity of the constructs, average variance extracted was used. The values were more than the threshold of 0.4 [31] . Similarly, according to Fornell and Larcker [32] , even though the AVE values are less than 0.5, but the CR is more than 0.6, the constructs still achieve convergent validity. From these results, the convergent validity of all the constructs used in the SEM were acceptable. The VIF values of all the variables were less than 3.3 showing that multicollinearity was not a problem [33] [34] .
4.3. Model Fit Statistics of the Structural Equation Modeling for the Direct Effect of Entrepreneurial Motivation on Psychological and Social Capital of Youth-Based Fruit Agri-Enterprises
Average full collinearity VIF (AFVIF) was used to assess the model’s goodness of fit. The VIF values was 1.643 VIF (AFVIF) = 1.643, acceptable if ≤ 5, ideally ≤ 3.3 [35] . Based on these results, the SEM fitted well for estimating the effects of motivation on social capital and psychological capital. The generated coefficients, therefore, yielded suitable estimation on the role of agripreneurial motivation, social capital and psychological capital on performance youth-based agrienterprises.
4.4. Discriminant Validity of the Constructs Used for Direct Effect of Entrepreneurial Motivation on Psychological and Social Capital of Youth-Based Fruit Agri-Enterprises
This study used the heterotrait-monotrait ratio of correlations (HTMT) ratio and cross loading to test discriminant validity. For cross loading to meet discriminant validity, no indicator should have higher punctuation than the construct being measured [31] . In Table 4, all the constructs of individual items’ loadings had greater values for their respective constructs than other constructs as shown by the numbers in bold.
The HTMT ratios of the constructs used to examine the effect of entrepreneurial motivation on psychological and social capital of youth-based fruit agri enterprises are shown in Table 5.
Henseler et al. [36] stated that HTMT is a better criterion to assess discriminant validity. Similarly, according to Monte Carlo, HTMT are better than measures like Fornell and Lacker [32] [37] . In this study, there was no discriminant validity problem as the HTMT ratios were less than 0.85 [38] (Table 5). HTMT values of less than 0.90 are still good according to Gold et al. [39] .
Motivation, psychological and social capital had discriminant validity with their constructs, hence good reliability and validity as the HTMT ratios were between 0.229 to 0.878 shown by bolded values. The constructs had no potential measurement bias and were suitable to estimate effect of agripreneurial motivation on social and psychological capital of youth-based fruit agrienterprise.
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Table 3. Reliability and validity tests of the constructs.
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Table 4. Cross loading of the constructs.
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Table 5. HTMT ratios of the constructs.
4.5. Hypothesis Testing of Direct Effects of Entrepreneurial Necessity and Opportunity Motivation on Psychological Capital and Social Capital of Youth-Based Fruit Agri Enterprises
It is hypothesized that necessity motivation influences the constructs of social and psychological capital. The path coefficients of direct effects of entrepreneurial necessity motivation on psychological capital and social capital of youth-based fruit Agri enterprises are in Table 6. Necessity motivation and cognitive social capital had a negative and significant relationship at 10% significance level. From these results, it can be said youth who chose entrepreneurship because they were not employed or because they are poor are less likely to communicate well with their customers and are also not sure with the quality of the products they sell. The probable explanation for this is that push type entrepreneurs do not have passion for entrepreneurship, therefore, lack entrepreneurial skills like good communication skills which are required to have good customer relationship. There was a positive and significant relationship between necessity motivation and relational social capital at 5% significance level, therefore, youth who choose entrepreneurship due to poverty respect their customers because they desire to retain and increase their customers to make more sales and increase their profits. Necessity motivation and self-confidence had a positive and significant relationship at 5% significance level. This means push type
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Table 6. Path coefficients of direct effects of entrepreneurial necessity motivation on psychological capital and social capital of youth-based fruit agri enterprises.
*NM- Necessity motivation.
entrepreneurs or those who want to provide for their families are likely to trust their ideas. Such entrepreneurs make sure they start an enterprise they trust and are confident with because they do not want any challenging opportunities/business environment and also want to avoid failure. The results also indicate a positive relationship between necessity motivation and resilience at 1% significant level. This means that youth who started their agrienterprise due unemployment or because they lost their jobs are able to adapt to the challenges they face in their enterprises. This is because they do not have any option other than entrepreneurship. Such entrepreneurs do not want to go back to their original situation, thus have no option but to look for ways to overcome their challenges. These results collaborate with those of Ephrem et al. [7] which indicates youth who are necessity driven are resilient.
It is hypothesized that opportunity motivation influences the constructs of social and psychological capital. The results in Table 7 indicate the path coefficients of direct effects of entrepreneurial opportunity motivation on psychological and social capital of youth-based fruit Agri enterprises. From the results, there was a positive and significant relationship between opportunity motivation and cognitive social capital at 1% significance level. Therefore, youth who sell fruits because they saw an opportunity on fruit agrienterprise are more likely to have shared values and communicate effectively with their customers. This is because such youth possess entrepreneurial skills, have passion and understand their customer needs since they conduct research before deciding on the enterprise to venture. Opportunity motivation and structural social capital had a positive and significant relationship at 5% significance level. Youth who have passion for entrepreneurship, therefore, interact frequently and maintain their relationship with their customers. The probable explanation for this is that such youth wants to understand their customers better so as to meet their needs. A positive and significant relationship was also experienced between opportunity motivation and relational social capital at 1% significance level meaning youth who have perceived entrepreneurial opportunity trust and relate well with their
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Table 7. Path coefficients of direct effects of entrepreneurial opportunity motivation on psychological capital and social capital of youth-based fruit agri enterprises.
customers. The reason for this positive relationship is because youth who are opportunity driven possess social networks, trust and respect their customers. Increased interactions with their customers also lead to spread of trust. This result is in line with that of [40] who stated that trust paves the ground for relations and conversation.
Youth whose entrepreneurial motivation was of opportunity-type had a positive and significant relationship with hope at 1% significance level. This imply that those who venture into agripreneurship because they love it are more likely to overcome challenges they face in their enterprises and also to achieve their goals. This is because they are endowed with entrepreneurial ingredients that drive their choice of an entrepreneurial career, hence, set realistic goals about their opportunities. Self-confidence and opportunity motivation had a positive and significant relationship at 1% significance level, meaning youth whose reason to venture into entrepreneurship was out of passion is more likely to trust their business ideas and abilities. This can be explained by the fact that opportunity entrepreneurs do market research prior to venturing into the business hence believe in their entrepreneurial competencies and have high perceived feasibility which influence their agripreneurial intentions [41] . Opportunity motivation and optimism had a positive and significant relationship at 1% significance. Those who start business because they have passion, therefore, keep expecting positive outcome even when things are uncertain. The probable explanation is that such youth understand that there are low and high seasons in business, therefore, foresee a better future despite the uncertainties. Resilience and opportunity motivation had a positive and significant relationship at 1% significance level, showing that youth who enjoy entrepreneurship are likely to adapt easily to the challenges they face. Such youth would have many ways to overcome difficulties and can adapt to the stressful life events as they have strong desirability for self-realization unlike entrepreneurs by necessity. Opportunity entrepreneurs enter into businesses because they already believe in their entrepreneurial competencies and have more means to overcome any drawback compared to necessity entrepreneurs who often startup businesses with limited funds and poor entrepreneurial skills. This result supports that of Ephrem et al. [7] which states that opportunity driven entrepreneurs are highly resilient.
5. Conclusion and Recommendations
Necessity motivation directly affected cognitive and relational constructs of social capital while in psychological capital it directly affected self-confidence and resilience. Opportunity motivation on the other hand affected all the constructs of social and psychological capital. This means that youth who are opportunity motivated have better social and psychological skills.
The study recommends that social and psychological capital contents should be integrated in entrepreneurship courses to promote entrepreneurial success.
Acknowledgments
I wish to acknowledge Egerton University for the opportunity to enroll my studies through the support from the Department of Agricultural Economics and Agribusiness Management.
Moreover, I would like to sincerely thank my supervisor’s Prof. Hillary Bett and Dr Florence Opondo for the tireless support, advice and guidance throughout my research work.
My sincere gratitude to Center of Excellence in Sustainable Agriculture and Agribusiness Management (CESAAM) for awarding me a scholarship which supported me to pursue my Master of Science Degree in Agrienterprise Development.
I am very grateful to my family, fellow students and friends for the support and prayers throughout my studies. I also wish to thank all those who helped me in one way or another.