sustainability
Article
The Impact of Environmental Risk Exposure on the
Determinants of Sustainable Entrepreneurship
Laura H. Middermann 1,* , Jan Kratzer 1and Susanne Perner 2
1Department for Entrepreneurship and Innovation Management, Technical University Berlin, 10623 Berlin,
Germany; [email protected]
2
*Correspondence: [email protected]
Received: 17 January 2020; Accepted: 13 February 2020; Published: 18 February 2020
Abstract:
Does the increasing awareness of environmental risk exposure also affect intentions
to create enterprises which address these social and environmental failures? Besides economic
explanations that social and environmental needs and market failure create opportunities for
sustainable entrepreneurship, it is less clear how cognitive processes and motivations related to
sustainable entrepreneurship are shaped by its context. This research integrates environmental risk
exposure as a contextual variable into the theory of planned behavior and uses data gathered in
the course of the Global Entrepreneurship Monitor. We provide empirical evidence for the impact
of environmental risk exposure on the determinants of sustainable entrepreneurial intention and
contribute to a deeper understanding of the formation of sustainable entrepreneurial intention.
Keywords:
sustainable entrepreneurship; theory of planned behavior; environmental risk exposure
1. Introduction
Particularly in recent years, it has become more and more obvious that people all over the
world increasingly realize the exponentially rising risks of environmental damage caused by humans.
According to Hall et al. [
1
] (p. 440) “awareness is growing that a fundamental transformation in
the way society consumes natural resources and produces energy may be needed if we are to make
progress on pressing environmental issues such as ecosystem degradation and global climate change.”
Recent data show that that human-induced warming and linked damage and environmental risks are
gradually speeding up [
2
,
3
]. Resulting social movements such as “Fridays for Future” or “Extinction
Rebellion” have appeared and have made global impacts by demonstrating for political and economic
changes towards climate change mitigation. Besides that, the need to change is also required for
economic systems. Especially with the development of sustainable entrepreneurial firms, individuals
can mitigate environmental changes and adapt to these, thus contributing to a more sustainable
development [
4
]. However, a precondition for this behavioral change towards sustainability “is
to recognize and acknowledge that there is a problem, and that it is severe” [
5
] (p. 1). But does
the exposure to environmental risk increase the awareness of climate change and if so, does this
influence the cognitive processes leading to sustainable entrepreneurial intention? This is the main
question throughout our study. Particularly in the last two decades, the role of start-ups in propelling
not only economic but also promoting sustainable impact has become increasingly popular [
4
,
6
–
9
].
Many terms have been created to describe this type of entrepreneur due to different facets and
motivations. However, all terms have as common elements that sustainable entrepreneurs “manage
to the “triple bottom line” by balancing economic health, social equity and environmental resilience
through their entrepreneurial behavior” [
10
] (p. 524) and that they are willing to improve the state of
the environment, as well as their own and society’s welfare. Thus, this study accounts for the view of
Sustainability 2020,12, 1534; doi:10.3390/su12041534 www.mdpi.com/journal/sustainability
Sustainability 2020,12, 1534 2 of 15
sustainable entrepreneurship in response to the mitigation of and adaptation to environmental and
climate changes by the development of sustainable entrepreneurial firms. According to Scott et al. [
11
]
(p. 52), “eco-socio innovation refers to the sustainable-entrepreneurially enacted process of collective
idea generation, selection and implementation by people who participate collaboratively to meet
ecological and social challenges.” This definition addresses the role entrepreneurs play in utilizing
market failures and promoting social welfare through the deployment of economic opportunities [
6
–
8
].
The degree to which economic returns are realized might differ significantly between impact- and
profit-driven entrepreneurs [
12
]. Environmental economics view market failures as a source of
sustainable entrepreneurial opportunities [
7
]. This might be a very good explanation for the economic
view on sustainable entrepreneurship; however, neither does this view enable us to explain intentions
to start up a sustainable business, nor to predict them.
Therefore, to date, it is still unclear how cognitive processes and motivations related to sustainable
entrepreneurship are shaped by the context [
6
]. Yet, this is of research interest as entrepreneurial firms
are particularly influenced by the founding entrepreneur’s perceptions and hence are driven by his or
her behavioral and cognitive factors [13].
Intentions are determining behavior [
14
–
17
] and are the construct of use when it comes to the
investigation of individual decision making. Due to Krueger et al. [
18
] (p. 413) “it seems evident that
much of what we consider ‘entrepreneurial’ activity is intentionally planned behavior”. Consequently,
a variety of studies have applied the Theory of Planned Behavior (TPB) as an analytical framework
to investigate cognitive antecedents related to entrepreneurial intention [
19
–
22
]. According to the
TBP [
15
], entrepreneurial intentions are predicted by three attitudinal antecedents. Two of them
address the perceived desirability of executing the outcome behavior: the attitude towards the behavior
and perceived social norms. The third antecedent refers to the perceived behavioral control of the
intended behavior [
23
]. Kautonen et al. [
19
] found all three antecedents to explain 59% of the variation
in entrepreneurial intention.
Previous studies have already confirmed that the three attitudinal antecedents are also capable
of explaining the appearance of sustainable entrepreneurial intention [
24
–
28
]. Therefore, building
on the TPB and a sample of 175,280 respondents, an intention-based framework is developed to
empirically investigate the impact of environmental risk exposure on the formation of sustainable
entrepreneurial intention.
With this we propose—next to classical explainatory factors of entrepreneurship intention—the
degree of physical hazards by environmental risk exposure as one upcoming explanato ry variable,
which might become an even stronger determinant in the future. This study is by its nature extending
the TPB, as suggested by Ajzen [
15
]. In addition, using a large dataset guarantees valid results. The
paper is structured as follows: In the first step, we provide a theoretical background and derive
hypotheses. Next, we present the measures, discuss the data set and describe our research design
before we conduct the analysis. The last two sections are devoted to presenting and discussing the
results and considering the implications arising from this.
2. Theoretical Background and Hypotheses
Intentions are found to best predict individual behavior [
14
] including entrepreneurial
behavior [
19
]. Intention can furthermore be defined as the willingness to achieve a given behavior [
16
].
Thus, analyzing the factors which shape intention also increases an understanding of the behavior in
question. Therefore, we apply the TPB in this context to predict sustainable entrepreneurial intention
by analyzing the underlying motivational factors. The TPB explains intention along the determinants
attitude towards behavior, subjective norm and perceived behavioral control [
23
]. Attitude towards a
certain behavior captures the evaluation of the outcome behavior [
16
]. A subjective norm relates to the
perceived social pressure to execute the behavior [
15
,
16
]. Perceived behavioral control comprises the
perceived feasibility to accomplish the behavior and is closely related to Bandura’s concept of perceived
self-efficacy [
23
,
29
,
30
]. The TPB generally assumes that “the more favorable the attitude and subjective
Sustainability 2020,12, 1534 3 of 15
norm with respect to a behavior, and the greater the perceived behavioral control, the stronger should
be an individual’s intention to perform the behavior under consideration” [
15
] (p. 188). Prior studies
have already confirmed the relevance of the TPB in the field of entrepreneurship [19,20,22].
Another model explaining intention is the Shapero and Sokol [
31
] entrepreneurial event model.
According to this model, intention is influenced by three determinants, namely: perceived desirability,
perceived feasibility, and the propensity to act [
32
]. The TPB and the entrepreneurial event model
have been found to overlap to a great extent [
18
,
32
]. Given the important role social norms play in
sustainable entrepreneurship [
9
], this study focuses on the TPB since it is capturing the influence of
social norms.
Thus, drawing on the TPB, an intention-based framework is developed to investigate the impact
of environmental risk exposure on the formation of sustainable entrepreneurial intention. Figure 1
shows the conceptual model of the study.
Sustainability 2020, 12, x FOR PEER REVIEW 3 of 14
188). Prior studies have already confirmed the relevance of the TPB in the field of entrepreneurship
[19,20,22].
Another model explaining intention is the Shapero and Sokol [31] entrepreneurial event model.
According to this model, intention is influenced by three determinants, namely: perceived
desirability, perceived feasibility, and the propensity to act [32]. The TPB and the entrepreneurial
event model have been found to overlap to a great extent [18,32]. Given the important role social
norms play in sustainable entrepreneurship [9], this study focuses on the TPB since it is capturing the
influence of social norms.
Thus, drawing on the TPB, an intention-based framework is developed to investigate the impact
of environmental risk exposure on the formation of sustainable entrepreneurial intention. Figure 1
shows the conceptual model of the study.
Figure 1. The conceptual model with elements from the Theory of Planned Behavior (TPB) (Ajzen,
1991).
Recent data shows that the environmental risk exposure is not evenly distributed over countries
[3]. Generally, in less developed countries the awareness for environmental problems is higher due
to a greater likelihood of suffering from environmental risk exposure and no or minor coping
capabilities [3]. Previous studies found empirical support by revealing a positive relationship
between local environmental problems and the concern of environmental risk exposure in poorer
countries [33,34]. Therefore, higher degrees of perceived environmental risk exposure can influence
the intention to start up sustainable enterprises.
The personal evaluation or attitude towards sustainable entrepreneurship strongly depends on
personal beliefs on whether this might have any impact and success [35]. Two factors determine this
evaluation: the fear of failure when starting up such an enterprise as well as the perceived business
opportunities to do so.
When founding a new venture, all entrepreneurs are confronted with the fear of financial loss
and failure [35,36]. This might be especially valid for emerging markets due to a greater likelihood of
environmental risk exposure and few coping capabilities provided by public institutions [3]. Thus, it
might be assumed that as the degree of environmental risk exposure increases, the fear of failure
might increase in parallel, and this might in turn significantly decrease intentions to start up a
sustainable business. We propose:
Hypothesis 1 (H1). The relationship between fear of failure and the intention to start up a sustainable business
is affected by the degree of environmental risk exposure.
Figure 1.
The conceptual model with elements from the Theory of Planned Behavior (TPB) (Ajzen,
1991).
Recent data shows that the environmental risk exposure is not evenly distributed over countries [
3
].
Generally, in less developed countries the awareness for environmental problems is higher due
to a greater likelihood of suffering from environmental risk exposure and no or minor coping
capabilities [
3
]. Previous studies found empirical support by revealing a positive relationship
between local environmental problems and the concern of environmental risk exposure in poorer
countries [
33
,
34
]. Therefore, higher degrees of perceived environmental risk exposure can influence
the intention to start up sustainable enterprises.
The personal evaluation or attitude towards sustainable entrepreneurship strongly depends on
personal beliefs on whether this might have any impact and success [
35
]. Two factors determine this
evaluation: the fear of failure when starting up such an enterprise as well as the perceived business
opportunities to do so.
When founding a new venture, all entrepreneurs are confronted with the fear of financial loss
and failure [
35
,
36
]. This might be especially valid for emerging markets due to a greater likelihood of
environmental risk exposure and few coping capabilities provided by public institutions [
3
]. Thus, it
might be assumed that as the degree of environmental risk exposure increases, the fear of failure might
increase in parallel, and this might in turn significantly decrease intentions to start up a sustainable
business. We propose:
Sustainability 2020,12, 1534 4 of 15
Hypothesis 1 (H1).
The relationship between fear of failure and the intention to start up a sustainable business
is affected by the degree of environmental risk exposure.
Entrepreneurial opportunities described “as positive and favorable circumstances leading to
entrepreneurial action” [
37
] (p. 310) are essential for entrepreneurial behavior. Previous research has
found that sustainable firm behavior is driven by economic opportunities [
6
]. These opportunities
for sustainable entrepreneurship are then pursued by individuals in expectations of entrepreneurial
outcomes [
10
]. But not only monetary benefits might count, sustainable entrepreneurs are especially
focused on the solution of major sustainability challenges [
4
,
38
]. Thus, two main differences in the
development and exploitation of sustainable entrepreneurial opportunities can be identified within
current literature. First, sustainable opportunities are found by an individual which identifies a
sustainability need and discovers an opportunity to approach it [
38
]. Second, based on market failures,
opportunities are created to address a sustainability need [
7
,
10
,
38
]. Given that opportunities depend on
the entrepreneurial environment and alertness [
37
], it is also assumed for the context of the study that
the awareness of such opportunities differs with the degree of environmental risk exposure. Therefore,
we propose:
Hypothesis 2 (H2).
The relationship between business opportunities and the intention to start up a sustainable
business is affected by the degree of environmental risk exposure.
The second central construct in the TPB are the perceived social norms. The findings of previous
empirical research reported a positive role of perceived norms for entrepreneurial intention in a general
context [19,20,22].
Also, for our context, it is assumed that social norms are influential to an individual’s view
towards the necessity of sustainable change. An example for such social norms would be separating
waste in some countries or eating vegan in some communities. Previous research found evidence for
social norms as injunctive norms (that involve the perception of approved behavior) and descriptive
norms (that involve the perception of other people’s behavior) resulting in economic actions [
9
].
Especially descriptive norms are found to be influential to an individual’s behavior since they “send
the message “If a lot of people are doing this, it’s probably a wise thing to do,” which serves to initiate
norm-congruent behavior” [
39
] (p. 264). Cialdini [
40
] for example showed that people intend to
recycle if ads communicated a prevalence of recycling. Descriptive norms lay open current social
developments like sustainable behavior which can be capitalized by entrepreneurial individuals,
resulting in sustainable businesses [
9
]. As social norms related to sustainable behavior are caused
by environmental problems [
9
], it might be expected that the degree of environmental risk exposure
differentially influences the effect of social norms. Therefore:
Hypothesis 3 (H3).
The relationship between perceived social norms and the intention to start up a sustainable
business is affected by the degree of environmental risk exposure.
The third construct of the TPB is perceived behavioral control [
15
] or respectively perceived
self-efficacy, as it is almost congruent with Bandura ‘s [
29
,
30
] construct of self-efficacy [
23
]. Perceived
self-efficacy represents personal judgements of the controllability and perceived ability to perform the
behavior [
23
]. Prior literature produced strong evidence that entrepreneurial self-efficacy is an essential
determinant of entrepreneurial intention [
41
,
42
]. Furthermore, research has shown that cognitive
factors related to entrepreneurship highly depend on contextual factors [
43
,
44
]. Thus, we assume that
the impact of self-efficacy on sustainable entrepreneurial intention might depend on increasing levels
of environmental risk exposure. We propose:
Hypothesis 4 (H4).
The relationship between perceived behavioral control and the intention to start up a
sustainable business is affected by the degree of environmental risk exposure.
Sustainability 2020,12, 1534 5 of 15
3. Methodology
3.1. Data
The “Global Entrepreneurship Monitor Adult Population Survey” (GEM) [
45
] from 2015 was used
to investigate individual level determinants of sustainable entrepreneurial intention in a global setting.
We built on an intention-based framework and assumed that environmental pressure influences the
intention to become a sustainable entrepreneur. Therefore, we focused on the respondent’s sustainable
entrepreneurial intention only and thus restricted the sample to those respondents to reference [
45
]
which indicated whether or not they are currently trying to start a social or environmental activity.
To capture the environmental context of a country, an additional dataset from the
WorldRiskIndex [
3
] was used. Given the aim of the paper to investigate the similarities and differences
of cognitive factors with regard to local environmental conditions, we divided countries based on their
degree of environmental risk exposure. Thus, countries have been classified by measures indicating
high, medium or low levels of environmental risk exposure.
We based our analysis on 175,280 responses as reported by the GEM [
45
] from individuals based
in 57 countries. All country classifications are listed in Appendix A.
3.2. Measures
To capture the dependent variable and independent variables data from GEM, APS [
45
] was used.
This dataset allowed us to identify determinants and various forms of entrepreneurial activity and
has frequently been used in previous studies to investigate sustainable entrepreneurship [
46
–
48
]. The
applied dataset also includes a special topic on sustainable entrepreneurship involving extra questions
Thus, to measure sustainable entrepreneurial intention, we asked respondents the following question:
“Are you, alone or with others, currently trying to start or currently leading any kind of activity that
has a social, environmental or community objective?”. We selected the response “currently trying to
start” as a proxy for sustainable entrepreneurial intention.
To consider the influence of attitudinal variables for the evaluation of sustainable entrepreneurial
behavior, we considered fear of failure and the evaluation of business opportunities as valuable
determinants. Thus, the GEM APS [
45
] respondents in each country indicated whether fear of failure
would prevent them from starting a business and if they perceived good opportunities for starting a
business in the area where they live.
To capture the influence of social norms, the measure of perceived visibility has been included.
Perceived visibility comprises the respondent’s perception that the country is shaped by a high visibility
of businesses that primarily aim to solve social problems [45].
Furthermore, self-efficacy was taken from GEM [
45
]. Self-efficacy covers the respondent’s
evaluation of whether they have the knowledge, skills and experiences required to start a new business.
In addition, control variables are included. First, we control for gender as women are found to have
a more favorable evaluation of sustainability [
27
,
46
]. Furthermore, we controlled for gender, as current
young social movements like Friday’s for Future might indicate that young people are more concerned
about the environment. In this vein, Lepoutre et al. [
47
] and Vuorio [
49
] found a positive relationship
between young individuals and sustainable entrepreneurship. In contrast, Hörisch et al. [
46
] and Estrin
et al. [
50
] found that older individuals have higher levels of sustainable orientation. Additionally, we
controlled for the level of education, as previous research presents significant results for the role of an
individual’s education for sustainable entrepreneurial activity [
47
,
50
]. As the contact to other founders
and the social network is important for social value creation and social entrepreneurship [
12
], we
additionally controlled for the effect of a social network. Thus, we additionally included gender, age,
education, income and social network gained from GEM [
45
] as control variables. All above variables
were transformed into binary coding, indicating a response range with yes =1 and no =0.
Environmental risk exposure was captured on a country level. The data provided by
WorldRiskIndex [
3
] allowed us to assess environmental risks on a global scale and gave insights on how
Sustainability 2020,12, 1534 6 of 15
much a certain country is exposed to extreme weather events such as earthquakes, cyclones, floods,
droughts and the general sea-level rise which are expected to appear as a result of climate change [
2
].
Based on the classification of reference [
3
] (p. 48), we distinguished the countries between the degree
of environmental risk exposure indicating low exposure, medium exposure and high exposure. To this
end, we created three dummy variables: exposure low for all values classified by reference [3] (p. 48)
as very low and low exposure, medium exposure and finally high exposure for all values classified as
high or very high.
All measures are presented in Appendix A.
4. Statistical Analysis
4.1. Descriptive Statistics
Table 1presents the descriptive statistics differentiated by the level of environmental risk exposure.
We found the lowest level of sustainable entrepreneurial intention within the countries of low risk
exposure (25%) and the highest level of intention within the countries of high-risk exposure (50%). These
outcomes might be a first indicator that environmental pressure affects the intention for sustainable
entrepreneurship. Correlations of the full sample are presented in Table 2. The correlation matrix does
not show correlations higher than 0.254. Furthermore, all variation inflation factors are not greater
than 10 and the tolerance is below 0.1, which indicates that multicollinearity is not a problem [51].
Table 1. Descriptive Statistics.
Low Medium High
Variable Mean SD N Mean SD N Mean SD N
Intention 0.025 0.155 76,872 0.027 0.162 34,771 0.050 0.218 52,441
Gender 0.505 0.500 83,377 0.508 0.500 36,989 0.510 0.500 54,909
Age 0.647 0.478 83,381 0.584 0.493 36,989 0.582 0.493 54,910
Education 0.381 0.486 82,293 0.336 0.472 36,531 0.297 0.457 54,394
Income 0.278 0.448 64,996 0.336 0.472 31,346 0.350 0.477 49,957
Social network 0.355 0.479 82,162 0.364 0.481 36,535 0.440 0.496 54,426
Fear of failure 0.431 0.495 79,811 0.377 0.485 35,041 0.390 0.488 53,611
Business
opportunities 0.387 0.487 66,881 0.385 0.487 31,839 0.453 0.498 49,349
Visibility 0.282 0.450 61,099 0.353 0.478 22,020 0.379 0.485 43,258
Self-efficacy 0.483 0.500 80,041 0.474 0.499 35,265 0.541 0.498 53,881
Note. N =175.280.
Sustainability 2020,12, 1534 7 of 15
Table 2. Correlations of the full sample.
Variables (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
Dependent variable (1) Intention 1
Controls
(2) Gender −0.017 *** 1
(3) Age −0.027 *** 0.006 * 1
(4) Education 0.041 *** −0.001 −0.011 *** 1
(5) Income 0.026 *** −0.073 *** 0.018 *** 0.232 *** 1
(6) Social network 0.075 *** 0.067 ** 0.076 *** 0.060 *** 0.101 *** 1
Independent variables
(7) Fear of failure −0.020 *** 0.071 *** 0.009 *** 0.004 −
0.031 * **
−0.029 *** 1
(8) Business
opportunities 0.071 *** −0.043 *** −0.060 *** 0.056 *** 0.089 *** 0.228 *** −0.080 *** 1
(9) Visibility 0.025 *** 0.003 −0.007 * −0.076 *** −0.033 *** 0.050 *** 0 0.125 *** 1
(10) Self-efficacy 0.073 *** −0.123 *** 0.005 * 0.071 *** 0.100 *** 0.254 *** 0.144 *** 0.212 *** 0.068 *** 1
Note. N =175.280, * p<0.05; ** p<0.01; *** p<0.001.
Sustainability 2020,12, 1534 8 of 15
4.2. Logistic Regression Models
Logistic regression models were used to test the research hypothesis regarding the relationship
between the likelihood of the determinants of sustainable entrepreneurial intention and the degree of
environmental risk exposure. Therefore, three logistic regression models were created (Table 3).
Table 3. Logistic regression models on sustainable entrepreneurial intention.
Exposure Low Exposure Medium Exposure High Full Model
Variables/Model ß Exp (ß) ß Exp (ß) ß Exp (ß) ß Exp (ß)
Controls
Gender (female =1) 0.013 1.014 −0.105 0.900 −0.158
*** 0.855 −0.076 * 0.927
(0.065) (0.094) (0.049) (0.035)
Age −0.201 ** 0.818 −0.380
*** 0.684 −0.064 0.938 −0.159
*** 0.853
(0.065) (0.094) (0.049) (0.035)
Education 0.564 *** 1.759 −0.376
*** 0.687 0.345 *** 1.412 0.291 *** 1.338
(0.071) (0.113) (0.052) (0.037)
Income 0.045 1.046 −0.038 0.963 0.109 * 1.115 0.118 ** 1.126
(0.066) (0.103) (0.051) (0.038)
Social network 0.475 *** 1.608 0.902 *** 2.464 0.274 *** 1.315 0.455 *** 1.576
(0.066) (0.107) (0.050) (0.037)
Independent variables
Fear of failure −0.098 0.907 0.170 1.185 −0.118 * 0.889 −0.073 * 0.929
(0.066) (0.096) (0.051) (0.037)
Business opportunities 0.489 *** 1.631 0.657 *** 1.929 0.407 *** 1.502 0.489 *** 1.630
(0.066) (0.103) (0.051) (0.037)
Visibility 0.417 *** 1.518 0.187 * 1.206 −0.078 0.925 0.155 *** 1.168
(0.066) (0.094) (0.050) (0.036)
Self-efficacy 0.531 *** 1.700 0.614 *** 1.848 0.437 *** 1.548 0.497 *** 1.643
(0.072) (0.111) (0.055) (0.040)
Model evaluation
Wald test 12,513.22
***
5680.59
***
14,349.08
***
34,197.42
***
Goodness-of-fit test
Cox and Snell R20.012 0.019 0.011 0.012
Nagelkerke R20.053 0.080 0.031 0.042
Note: N =175.280; *** p<0.001, ** p<0.01, * p<0.05; n.s. p>0.05 (two-tailed-test).
Significant Wald tests (p<0.001) show that all logistic models provide a better fit to the data
than the null model [
52
]. Cox and Snell R
2
as well as Nagelkerke R
2
are presented as coefficients for
determination for logistic regressions [53].
Our empirical result show that business opportunities and self-efficacy have highly significant
(
p<0.001
) and positive effects on sustainable entrepreneurial intention across all levels of environmental
risk exposure. The direction of effects of perceived business opportunities and self-efficacy are unaltered
by increasing levels of environmental risk exposure. Consequently, we rejected hypotheses H2 and
H4. However, fear of failure has only a negative significant effect (p<0.05) in countries with high
environmental risk exposure. Thus, the higher the fear of failure of respondents based in countries
with high risk exposure, the less likely (Exp (B)=0.889) that they intend to start a sustainable
business. Perceived visibility of social businesses has a positive and highly significant effect (p<0.001)
on sustainable entrepreneurial intention in countries with low environmental risk exposure. This
effect decreases in countries with medium risk exposure (p<0.05) and turns out to be negative and
insignificant in countries with high risk exposure. Therefore, hypotheses H1 and H3 were accepted.
Sustainability 2020,12, 1534 9 of 15
5. Discussion
The aim of this study was to examine if increasing exposure to environmental risk also results
in affecting intentions to create enterprises aiming sustainability failures. Our findings show that
environmental risk exposure affects cognitive factors in different ways and therefore indirectly influences
the decision to start up a sustainable business.
More specifically, we could show that environmental risk exposure significantly increases the
fear of failure, which in turn limits sustainable entrepreneurial intention. Less developed countries
are facing a greater likelihood of environmental risk exposure and are at the same time dealing with
little coping capacities to remove or protect from environmental damage [
3
]. This might be related to
a lack of institutional stability and support, which has generally been found to enhance the fear of
entrepreneurial failure [43].
Our analysis furthermore reveals that the intention to start up a sustainable business increases
when an individual perceives good opportunities in the area where they live. This finding is in line
with previous research [
6
]. In contrast, Hörisch et al. [
46
] could not confirm the positive effect of a good
business climate on sustainable entrepreneurship. Further research is needed to clarify this contrasting
finding. Against our expectations, the relationship is furthermore found not to be affected by the
degree of environmental risk exposure. Even though the awareness for a social or environmental need
might increase with higher degrees of environmental risk exposure, it does not consequently affect the
relationship between perceived opportunities and sustainable entrepreneurial intention. A possible
explanation is that the evaluation of opportunities also depends on other factors leading to a favorable
evaluation of local conditions like, for example, the institutional environment [54].
Perceived social pressure due to a high visibility of social businesses has the highest effects on
sustainable entrepreneurial intention in countries with a low degree of environmental risk exposure.
In countries with high levels of environmental risk exposure, the perceived social pressure does
not determine sustainable entrepreneurial intention. It might be assumed that individuals based in
countries with a high environmental risk exposure do not need to follow norm-congruent behavior
established by other people to form the intention to start a sustainable business. They might feel
the need to create a sustainable impact on their own due to experiencing firsthand exposure to
environmental risks. In countries with low levels of environmental risk exposure, the perceived social
pressure exhibited by a high visibility of sustainable businesses is significantly higher. It is assumed
that people who are not personally affected by environmental risks are to a higher level influenced by
other people’s behavior and that this “descriptive norms may help them identify trends upon which
they can capitalize” [9] (p. 497).
Our analysis furthermore reveals continuous positive effects of perceived self-efficacy on
sustainable entrepreneurial intention which is in line with previous findings of conventional
entrepreneurship [
19
]. However, we found that this relationship is unaffected by environmental risk
exposure. In turn, if an individual feels the need to start up a sustainable business but does not perceive
high levels of self-efficacy, he or she will not intend to do so.
6. Conclusions and Implication
This study contributes to entrepreneurship literature by using an intention-based framework
to examine the influence of environmental risk exposure on the intention to start a sustainable
entrepreneurial firm. Therefore, we extended the TPB with the degree of environmental risk exposure
as one content-explaining variable.
Our results raise important implications for entrepreneurship theory and practice.
First, we contribute to theory as we have expanded the use of the TPB and enhanced the
understanding of the formation of sustainable entrepreneurial intentions. As a result, our study is one
of a very small number of studies that explain the intention to start a sustainable business based on
drivers other than economic context [9].
Sustainability 2020,12, 1534 10 of 15
Furthermore, our findings show that cognitive determinants of sustainable entrepreneurial
intention are affected by environmental risk exposure. Thus, we provide empirical evidence on the
importance of environmental factors on entrepreneurial decision making. This responds to recent calls
for a deeper understanding on how micro-level cognitive and behavioral entrepreneurial characteristics
are shaped by context [6,9].
Finally, our results have practical relevance. First, the findings could help national policy makers
to identify institutional support and incentives that best encourage sustainable entrepreneurship. For
instance, being aware of major sustainability challenges and market failures enables public policy makers
to establish and promote a good business climate and opportunities for sustainable businesses. This is
especially recommended for countries like Germany which aim to be pioneers in the field of sustainable
technological solutions. Thus, understanding a national context and how this affects intentions to start up
a sustainable business is essential for policy makers to develop an international competitive advantage in
this field with growing importance. Additionally, this knowledge could also assist in locating sustainable
businesses [
9
]. Taking in mind the influence of descriptive social norms in countries with low exposure to
environmental risks, such like Germany, sustainable businesses should be located where a high level of
social norms encourages sustainable entrepreneurial behavior, like for example in Berlin.
The exploitation of sustainable entrepreneurial opportunities could be fostered by enhancing
the self-efficacy due to entrepreneurial education. In this process, entrepreneurship educators could
represent strong role models [
55
] and thus support the development of sustainable business models [
10
].
Knowing that fear of failure especially limits sustainable entrepreneurship in countries which are
most exposed by environmental risks, international policy makers could offer precise development
assistance to foster sustainable entrepreneurship, such as funding, incentives or institutional support,
which encourage individuals based in less developed and high exposed countries to take on the risk of
starting a sustainable business. This also helps to counter environmentally caused mass migration,
which is expected to escalate in the near future.
7. Limitations and Future Research
This study has employed a large-scale survey to provide empirical evidence on the determinants of
sustainable entrepreneurship and responds to recent literature calling for large-survey applications [
10
].
However, our research may have limitations.
First, our variables are limited to the cognitive factors included at GEM [
45
]. Further research could
confirm and extend our results by the use of alternative databases or additional cognitive variables,
which were not included in this study. In addition, a qualitative follow-up study could provide
deeper insights and explain our findings, such investigating individual differences and explanations
for example if the “fear of failure” as included in our database is more shaped by economic or societal
loss. Furthermore, the variable of environmental risk exposure was taken from WorldRiskIndex [
3
]
and applied as a proxy for physical hazards due to extreme weather events. We exclusively focused on
environmental risk exposure and excluded variables from the social, economic and political sphere.
Therefore, we encourage further studies to also include further contextual variables (e.g., coping
capacities, vulnerability, institutional environment) to enhance the knowledge of a country’s structural
risk exposure, which is not exclusively dependent on the pure environment.
Secondly, we applied the TPB and focused on the determinants of sustainable entrepreneurial
intention, thus neglecting the intention-behavior link. However, using theoretical arguments of TPB
stating intention as a predictor of behavior [
15
] and empirical findings in a general entrepreneurial
context [
19
], we became convinced that the intention-behavior link is also valid for predicting sustainable
entrepreneurship. In addition, future studies could also clarify to what extent this link is also affected
by environmental risk exposure.
Finally, we encourage future studies to test if our results remain stable when using alternative
intention-based frameworks, such as the entrepreneurial event model [
32
] and other types of national
environmental pressure, like for example the ecological footprint per person as provided by the Global
Sustainability 2020,12, 1534 11 of 15
Footprint Network [
56
]. Overall, we are confident that our results are beneficial and suggest the need
for further studies contributing to a better understanding of how cognitive factors and motivations
related to sustainable entrepreneurship are shaped by context.
Author Contributions:
Conceptualization, L.H.M., J.K. and S.P.; methodology, L.H.M.; formal analysis, L.H.M.;
writing—original draft preparation, L.H.M. and J.K.; writing—review and editing, L.H.M., J.K. and S.P.;
visualization, L.H.M.; supervision, J.K. and S.P. All authors have read and agreed to the published version
of the manuscript.
Funding:
We acknowledge support by the German Research Foundation and the Open Access Publication Fund
of TU Berlin.
Conflicts of Interest: The authors declare no conflict of interest.
Appendix A
Table A1. Countries included differentiated by environmental risk exposure.
Country N Exposure
United States 3000 medium
Egypt 2512 low
South Africa 3130 medium
Greece 2000 high
Netherlands 2258 high
Belgium 2022 low
Spain 24,300 low
Hungary 2000 high
Italy 2000 high
Romania 2002 high
Switzerland 2424 low
United Kingdom 9405 medium
Sweden 5024 low
Norway 2000 low
Poland 2000 low
Germany 3842 low
Peru 2078 high
Mexico 4643 medium
Argentina 3000 low
Brazil 2000 low
Chile 6231 high
Colombia 3686 high
Malaysia 2000 high
Australia 2000 high
Indonesia 5620 high
Philippines 2000 high
Thailand 3000 medium
South Korea 2000 high
Vietnam 2000 high
China 3822 high
India 3413 medium
Iran 3234 low
Canada 3561 low
Morocco 2061 medium
Tunisia 2001 medium
Senegal 2363 high
Burkina Faso 2325 medium
Cameroon 2548 high
Barbados 2000 low
Sustainability 2020,12, 1534 12 of 15
Table A1. Cont.
Country N Exposure
Botswana 2200 low
Portugal 2005 low
Luxembourg 2016 low
Ireland 2001 high
Finland 2007 low
Bulgaria 2002 medium
Latvia 2004 low
Estonia 2301 low
Croatia 2000 low
Slovenia 2009 medium
Slovakia 2003 low
Guatemala 2181 high
Panama 2000 high
Ecuador 2120 high
Uruguay 2165 low
Kazakhstan 2106 low
Lebanon 2600 low
Israel 2055 low
Table A2. Measures.
Variable Operationalization Data Source
Dependent variable (individual level)
Sustainable entrepreneurial intention
Are you, alone or with others,
currently trying to start or currently
leading any kind of activity that has a
social, environmental or community
objective?
(currently trying to start =1/no =0)
GEM APS [43]
Independent variables (individual level)
Fear of failure
Would fear of failure prevent you from
starting a business? (yes =1/no =0) GEM APS (2015)
Business opportunities
In the next six months, will there be
good opportunities for starting a
business in the area where you live?
(yes =1/no =0)
GEM APS (2015)
Visibility of social businesses
In my country, you will often see
businesses that primarily aim to solve
social problems (yes =1/no =0).
GEM APS (2015)
Self-efficacy
Do you have the knowledge, skill and
experience required to start a new
business? (yes =1/no =0)
GEM APS (2015)
Control variables (individual level)
Gender Female =1/Male =0 GEM APS (2015)
Age Age in years (<35 =0/>35 =1) GEM APS (2015)
Education Postsecondary education
(yes =1/no =0) GEM APS (2015)
Income
Belonging to the highest tertial with
regard to household income
(yes =1/no =0)
GEM APS (2015)
Social network
Do you know someone personally
who started a business in the past 2
years?
(yes =1/no =0)
GEM APS (2015)
Sustainability 2020,12, 1534 13 of 15
Table A2. Cont.
Variable Operationalization Data Source
Environmental pressure (country level)
Low environmental risk exposure
Exposure to environmental risk per
country low or very low
(yes =1/no =0)
WorldRiskIndex [2]
(p. 48)
Medium environmental risk exposure Medium exposure to environmental
risk per country (yes =1/no =0)
WorldRiskIndex [2]
(p. 48)
High environmental risk exposure
Exposure to environmental risk per
country high or very high
(yes =1/no =0)
WorldRiskIndex [2]
(p. 48)
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