Antecedents for Entrepreneurial Propensity and Intention: Findings from Singapore, Taiwan, and Hong Kong

While the existing entrepreneurship literature has identified various antecedent factors that influence the intention and propensity of individuals to become entrepreneurs, there has been relatively few empirical studies covering the three East Asian NIEs of Hong Kong, Taiwan and Singapore, which have achieved among the highest average economic growth rate in the world over the last 30 years. Although all three economies have predominantly ethnic Chinese population, their economic development strategies have been significantly different (see e.g. Wong & Ng 2001). While Singapore and Hong Kong both relied heavily on openness to trades and foreign investments in general as well as DFIs by large multinational corporations in particular, Taiwan has developed on the strength of indigenous SMEs, especially in the manufacturing sector. Differences also existed between Singapore and Hong Kong: While the state played a significant role in regulating and controlling the economy in Singapore, which is often said to have stifle indigenous entrepreneurship, the Hong Kong government has pursued a largely laissez faire approach, which has been credited with creating a more entrepreneurial culture among Hong Kong’s population. Notwithstanding such popular impressions, data from GEM 2002 shows that Singapore actually registered the highest total entrepreneurial activity (TEA) rate (5.9%), followed by Taiwan (4.3%), with Hong Kong being the lowest (3.4%). The discordance between the popular impressions and the aggregate GEM 2002 findings suggest the need for more detailed analysis. As a first step, this paper examines the extent to which the levels of entrepreneurial activities in the three NIEs can be explained by known antecedent factors established in the existing entrepreneurship literature, based on data from the GEM 2002 adult population surveys in Hong Kong, Taiwan and Singapore. In particular, the effects of three antecedent factors were tested: (i) self-efficacy; (ii) perception of opportunity; and (iii) personal knowledge of other entrepreneurs. In addition to testing for possible differences in their effects on opportunity vs. necessity entrepreneurial propensities, the authors also examined their effects on entrepreneurial intention. Logistic regressions were used on the pooled data from the three surveys, with appropriate controls for location and demographic factors like age, gender and education.