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Transcript of SSRN-id1753626
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8/2/2019 SSRN-id1753626
1/5Electronic copy available at: http://ssrn.com/abstract=1753626
IntroductionThe economical and psychological researches
during the past decades have granted special
attention the entrepreneur ship, its emerging
and maintenance conditions, in the context
where a direct connection with the
economical development had been hyphened.
The preoccupations in the economical
psychology aimed, preponderantly, the
finding of those psychological treats/factors
that are in some way or another implicated in
the augmentation and predicting of
entrepreneurial tendency.A remarkable number of researches (Gilad,
1982; Gartner, 1985; Perry 1990; Bygrave
1993; Kaufmann & Walsh 1995) evidenced
the capacity of Internal Locus of Control of
predicting the propensity of a person for
employing in a small business type
entrepreneurial activity. All extensive
research showed that an internal locus of control has been one of the psychological
characteristics most often used as predictive
of entrepreneurship (Perry 1990; and
Kaufmann &Walsh 1995). Also, a person
with an internal locus of control is more likely
to believe that environmental influences, such
as the economy, can be influenced rather than
passively accepted (Wheatly, Anthony, &
Maddox 1991; and Ward 1993). Moreover, a
correlation is believed to exist between
Entrepreneurs and the possession of an
internal locus of control (Sapp and Harrod
1993). In the actual situation of global
economical crisis, the economical growth and
the future prosperity are seriously doubted,
owing both to the great number of SME who
bankrupted, and to the dramatic decrease of
the newly established SMEs.
PurposeRomania recorded during 2004 -2008 one of
the highest growth rates in the European
Union, registering in the last quarter before
the crisis a net increase of 8.9% and a budget
deficit of 1.2% of GDP One of the main
sources of economic growth was consideredto be consumption financed by bank loans.
The national government has tried to respond
to the crisis situation with a set of public
policies designed to reduce social and
economic impact. The immediate effect was
rather the opposite: more than 300,000 SMEs
have been closed and the number of
unemployed reached almost one millionpeople. For this situation seem to be
responsible factors of "objective" nature as
well as factors of psychological nature.
Among factors of "objective" nature might be
included low efficiency of public policies
initiated in response to the economic crisis
and the changing attitude of banks in terms of
investment and consumption loans. Amongpsychological factors there is the mass -
media reaction in Romania regarding the
global crisis, which has sent in printed and
audio-visual media messaged mostly of
"catastrophic" type, with increased negative
character. Most television stations have rather
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preferred the approach of "tabloid" manner in
the presentation of economic and social
effects of me crisis.
Therefore we have decided to
experimentally evaluate the possible
interaction effect of factors such as
exposure to negative media messages
regarding the state of the economy and
personal perceptions on source/value of
money regarding young people Tendency
to invest in a small business.
Method
In order to evaluate the possible effect of factors such as exposure to negative media
messages regarding the state of the economy
and personal perceptions on source - value of
money regarding the young people tendency
to invest in a small business, we used an
experimental method, 2x2 factorial design
with independent groups.
ParticipantsA total of 273students from the Faculty of
Economics, specializing in Management and
Finance-Banks were recruited and completed
Rotter's Locus of Control Scale, student's
form. After applying, there were eliminated
the students who had obtained scores over or
equal to 13 points, respectively those
considered to have an external LOC,
maintaining a total of 181 study participants
with scores below 13. We thus obtained a
sample of 181 students, made up of 62% girls
and 38% male, average age 21.4 years (SD =
3.22).
From the theoretical point of view they should
follow a strong tendency to engage in
entrepreneurial activities and a low tendency
to passively accept an external situation and
the precarious state of the economy.
ProcedureThe 181 pre-selected participants were
randomly divided into four experimental
groups (scenarios) within a 2x2 type between
subject design experiment Out of these 152
students actually participated in the
experiment.
Experimental Variables In the framework of the experiment two
independent variables were manipulated, with
2 levels each, respectively:
VII: Source of money (money won at lottery
versus money derived from credit) ; VI2:
media messages (containing strongly negative
economic information versus neutral
economic content)
Experimental scenarios:
Scenario 1: Subjects watched a video with
duration of 12 minutes, which contained a set
of news about the economic situation in
Romania, with strongly negative news. Later,
the viewing subjects decided by filling in a
questionnaire, how much money they should
invest in a small business under the conditions
that they would have won at the lottery sum
of 300,000 lei (about 70,000 Eur).
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Scenario 2: Subjects watched a video with
duration of 12 minutes, which contained a set
of news about the economic situation in
Romania, with strongly negative news. Later,
the viewing subjects decided by filling in a
questionnaire, how much money they should
invest in a small business under the conditions
that a bank would have preselected them for a
very advantageous loan of 300,000 lei
(approx. 70 000 Eur).
Scenario, 3: Subjects watched a video with
duration of 12 minutes, which contained a
story about the ocean, with neutral content.
Later, the viewing subjects decided by filling
in a questionnaire, how much money they
should invest in a small business under the
conditions that they would have won at the
lottery sum of 300,000 lei (about 70,000 Eur).
Scenario 4: Subjects watched a video with
duration of 12 minutes, which contained a
story about the ocean, with neutral content.
Later, the viewing subjects decided by filling
in a questionnaire, how much money they
should invest in a small business, under the
conditions that a bank would have preselected
them for a very advantageous loan of 300,000
lei (approx. 70 000 Eur).
ResultsThe 152 students were exposed to the four
experimental scenarios and the Dependent
Variable DV level was measured on a ratio
scale (amount of Invested money express in
thousand Lei
Table 1: Descriptive Statistics for all
experimental groups
A Source of money (2) x Media messages (2)
analysis of variance was used to test
differences between means for significance.
Figure 1 shows the mean DV for the two
experimental factors and reveals that the
effect of F2 Media messages was much larger
for Invested money (DV) than it-was the
effect of Fl Source of money.
For the analysis of null hypothesis for the
main effects of the 2 factors and for the
interaction effect there has been used Two-
Way Analysis of Variance (ANOVA), with
results shown in Table 2.
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Table 2: Tests of Between -Subjects Effects
The main effect Fl Source of money was not
significant, F(l,148)=2.271, p=0.577, so no
experimental evidence that Invested money
amount differ in relationship with Fl Source
of money factor. The main effect F2 Media
messages was significant, F(l,148)=6.806,pO.GT, proving evidence that Invested money
amount differ in relationship with tip of media
message exposure: the level of investment
temptation is significant superior for Neutral
messages scenario of F2 (Table 3).
Table 3: F2 Estimates
The variability associated with the interaction
of the two independent variables is not
significant,F(l,148)=2.271, p=0.134, so no experimental
evidence that Invested money amount differ
in relationship with Source of money x Media
messages interaction
DiscussionsInitial assumptions based on existing theories
and previous researches have been infirmed.
Thus, we
expect for young people with internal LOC
the negative message versus neutral messageto produce an insignificant difference,
individuals having alleged ability to consider
the external environment as controllable and
adjustable. Average of potentially invested
amounts by the exposed subjects to "negative
media messages" was significantly lower than
average of amounts invested by the subjects
exposed to the "media message neutral" of
factor F2 (p 0.001). Also, we expect that
young people have a significantly greater
tendency to invest money without cost and
without risk taking, like win the lottery,
against those who would fund a possible
investment by bank credit. For F1 the primary
effect is insignificant (p 0.05). Lack of main
effect Fl most likely causes no interaction
effect. It is plausible to think that mostly
negative economic news create a strong
emotional display, causing negative attitudes
regarding the entrepreneurship tendency. The
existence of such an emotional display could
later or simultaneously make the effect of one
factor or another to become insignificant. It
seems reasonable to believe that both
reduction of consumption, and the dramatic
decrease in number of small businesses
opened in Romania in 2009-2010 (both with
values significantly higher than the EU
average) is partially influenced by dominant
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paradigm and negative media messages in
Romania. This conclusion emphasizes the
possible need for a realistic/
positive public communication strategy,
public-financed and distributed by public and
independent media channels, to mitigate the
"psychological crisis" of investment and
consumption.
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