Factors Influencing Entrepreneurship Ability

A Case Study of Parbat District

1
Gyanu Maya Pun

This study aims at finding out socio-demographic characteristics, business

characteristics, motivational factors and other challenging factors that may
influence entrepreneurship ability of the entrepreneurs supported by MEDEP in
rural setting of Parbat District of Nepal.

Multistage sampling methods including stratified, probability and random

sampling methods were adopted. A total of 253 entrepreneurs were selected,
consisting 150 females and 103 males. And finding reached through the
research is that the business characteristics have more significant influenced
upon the ability of the entrepreneurship than the socio-demographic
characteristics. Among the motivating factors, environmental factors much
stronger than others are. While considering challenging factors, most of the
non-economic factors are more powerful than the economic factors in
increasing the ability of the entrepreneurs.

1. Introduction
Rationale
Micro Enterprise Development Programme (MEDEP) has indeed increased the number
of enterprises in the 21 districts of Nepal. Parbat, one of the Programme districts, has
also witnessed this trend. The district has now a total of 1,056 entrepreneurs created
by the motivation and support of MEDEP. However, during the course of development
stages of enterprises, the following situations of the entrepreneurs have been
observed:
Lack of confidence in starting business enterprise
The business enterprises began but couldn't continue due to personal disinterest,
financial problem, family volatility, etc
The entrepreneurs found to be just engaged in the enterprising activity due to
lack of motivation in other sectors.
Some have expanded their business successfully

Despite all the entrepreneurs being supported by the MEDEP in equal terms, the
following questions have been raised:
Why are some of the entrepreneurs unable to run their enterprises with full
potentiality, but continuing the enterprises?

1
Ms Pun is a masters degree student of population, gender and development, Pokhara
University. She is grateful to her thesis supervisor Mr. Deepak Raj Paudel, lecturer of Pokhara
University.
48 Gyanu Maya Pun

What are the reasons behind it?

What types of characteristics, motivational factors, and challenges the
entrepreneurs have faced that affected their entrepreneurship ability?

Objectives
The studys overall objective is to identify the factors influencing the entrepreneurs
entrepreneurship ability. The specific objectives are:
to analyse the business characteristics of the entrepreneurs
to explore the positive or pull motivating factors affecting the entrepreneurs
entrepreneurship ability
to identify the challenges or problems faced by the entrepreneurs in regard to
entrepreneurship development

Hypotheses
The following hypotheses have been formulated:
Socio-demographic characteristics of the respondents like sex, age, marital status,
educational attainment, caste/ethnicity, and birth place influence the
entrepreneurs entrepreneurship ability
Business characteristics including the enterprises status, ownership type,
condition, number of employees and types likely affect the entrepreneurship
ability of the entrepreneurs
Motivating factors affect the entrepreneurship ability of the entrepreneurs.

2. Materials and Methods

Source of Data
This study has been based exclusively on the quantitative data. Both the primary and
secondary data were gathered. The primary data has been derived from the field
survey. The secondary data were acquired from the reports and database provided by
MEDEP.

Sample Size and Sampling Methods

Altogether 253 enterprises, comprising 150 females and 103 males were selected as
sample units from a total of 1,056 enterprises across the Parbat District. These
sample units were selected by adopting three sequential sampling procedures. First,
the enterprises were stratified into female- and male-owned, castes/ethnicities, 13
types of activities and 13 program centres of MERDEP; secondly, the probability
sampling method was used to determine the proportionate size for each stratum, and
then finally simple random sampling method was used to select the required number
of enterprises for each stratum.

Concepts and Methods of Analysis

This study covered entrepreneurs and the enterprises supported by MEDEP.
Entrepreneurship has been defined as having ability to continue or expand the
 Factors Influencing Entrepreneurship Ability 49
enterprises. The abilities considered here include seeks and acts on opportunity,
information seeking, commitment to work, problem solving, and self confidence
(Guthier 1992). A total of 25 questions related to these five broad ability measures
were asked to the sample entrepreneurs, seeking answer either YES or NO.
Score 1 has been assigned to each yes answer to the questions. An index is developed
based on score ranging from 0 to 25. The score is added up. Total score of 14 has been
considered as benchmark to identify high and low entrepreneurship ability, since
56th percentile of the sample entrepreneurs got this score and more.

The entrepreneurship as the dependent variable has been assessed by two major
independent variables and their sub-variables (Frear 2005). They are socio-
demographic characteristics and business characteristics of the entrepreneurs. The
socio-demographic variable has been described comprising: (i) sex, (ii) educational
attainment, (iii) age, (iv) marital status, (v) caste/ethnicity, and (vi) birth place to
indicate migrant or not. Likewise, the business characteristic of entrepreneurs has
been described in terms of: (i) status, i.e. registered or not, (ii) types of ownership -
single, two partners or more than two partners, (iii) condition just continuing or
expanding, (iv) number of employees - ranging from 1 - 9, and (v) types of enterprises
one of the 13 categories as stated above.

This study has also considered two other concepts related to enterprising development
like motivation and challenges. Motivation is essential to driving persons to take
enterprising activities. The motivational factors in terms of positive pull factors
considered here include:(i) persons of inspiration such as neighbors including friends or
relatives, family members, and role model (exemplary) persons. (ii) individual reasons
like sufficient capital, desire of earning more money, and independent work; and (iii)
environmental factors including family background - having family member already
involved in the enterprises, MEDEP intervention with support schemes (training, skills,
finance, & technology), sufficiently available raw materials and labor and market
demand of the products (Dollinger 1999). The challenging factors the entrepreneurs
faced regarding continuing or expanding their enterprises include the direct related
variables like (i) economic factors - access to finance, availability of raw material,
contemporary machine technology, labor supply or availability, and marketing and (ii)
non-economic factors like social values and norms, decision making of enterprise
related works, household work, mobility, and networking (Khanka 1990).

The data and information was acquired from the sample entrepreneurs by using the
semi-structured interview questionnaire form. The data were processed and analysed
with SPSS (Statistical Package of Social Sciences) programme.

Descriptive statistics including distribution of individual features and cross tabulation,

and a binary logistic regression model for examining the effects of selected
independent variables on entrepreneurship ability were applied wherever feasible.
50 Gyanu Maya Pun

3. Review of Literatures
The review deals with major studies so far available concerning with concepts and
factors of enterprises.
Entrepreneur and Entrepreneurship
The word entrepreneur has been evolved passing through various meanings from
musical instrument in France, to military expeditions and to economic aspects
(Cochran 1950). Under economic terms too, several scholars have coined it differently
such as risk taker, innovator, organizer, opportunity taker, marshaling the
resources for advantage, etc (Knight 1965; Hisrich 1986; Bygrave and Hofer 1991;
Huefner and Hunt 1994; Begley 1995).

Entrepreneurship refers to the functions performed by an entrepreneur in establishing

an enterprise (Khanka 2002). Simply, it is the process of creating something new and
assuming the risks and rewards (Hisrich and Peters 2002). During the course of
entrepreneurship, an entrepreneur may face several challenges- favourable or
unfavourable. Entrepreneurship has cultural value dimensions such as high power
distance and small power distance (Hofstede 1991; Henriquez et al. 2000). A high
power distance reflects the acceptance of inequalities, privileges and status in society
and is likely to positively influence on the entrepreneurship since it often goes hand in
hand with more (income) inequality. On the other hand, a small power distance
reflects a society characterized by decentralization and an educational system based
on equality between teacher and student favoring entrepreneurship through the
development of initiative.

Measurement of Entrepreneurship
Measurement of entrepreneurship is the most complicated work, as its determinants
vary considerably among the countries and there is lack of universally commonly
agreed set of indicators (Verheul et al. 2000). Indeed enterprise is of interest to
several disciplines, but each discipline considers determinants according to its fields
of area.

For instance, economics consider scarcity, opportunity cost, technology development,

etc to measure entrepreneurship, while sociology deals with cultural traits, and so on.
Guthier (1992) has considered initiative, persistence, assertiveness, systematic
planning, seeks and acts on opportunity, information seeking, commitment to work,
problem solving, and self confidence as ability measurements of entrepreneurs in
Nepal. Verheul et al. (2000) have used business ownership and self-employment to
define entrepreneurship at country level and ability, personality traits, values and
attitudes influencing the occupational decision, etc. at individual level. Similarly,
Bosma et al. (2000) have attempted to measure the successful entrepreneurship
taking into consideration of variables like profits, employment generation and survival
period of firm. In terms of scale, the measurements may be at micro (individual
entrepreneur) level, meso level (industrial sectors), and macro (national) level.
 Factors Influencing Entrepreneurship Ability 51
Characteristics of Entrepreneurs
Entrepreneurs are of different types, as they tie with existing physical, social,
cultural, economic and political systems. Broadly, the characteristics of entrepreneurs
are described in terms of: (i) socio-personal features like sex, education, age, marital
status, caste or ethnicity, etc (Frear 2007), (ii) psychological/individual characteristic,
including courage, confidence, patience, modesty, risk taking ability, and (iii) business
characteristic, comprising business types, initial financial investment, size and types
of employees etc (Tuladhar 1996).
Available studies indicate that range of age is crucial for undertaking enterprises. In
most cases, people within the age ranging form +20 34 years are more likely to be
entrepreneurs. Older age of people may have declined effects for entrepreneurship. In
terms of marital status, married entrepreneurs operate the most of the enterprises,
and that married women are more successful entrepreneurs than unmarried are.
Though education is an important element of entrepreneurship, it has no direct
relationship with the successful entrepreneurship; rather there are mixed results
between education status and entrepreneurship ability (Minniti and Bygrave 2003).
Formal education is not a prerequisite for becoming an entrepreneur. However, it
plays an important role in managing the business (Ranabhat 1995). Since
entrepreneurs always seek optimum situation for investment in terms of location and
time, people move their firms at those locations. Traditionally, type and scale of
enterprises are found to be varied by castes and ethnicities. Observation is that the
Newars are traditionally town based traders, the Thakalis are inns operators, the
Marwaris are business operators, the Jyapus are farm entrepreneurs and petty sellers,
etc (Regmi 1988).

Motivational Factors
Motive may be defined as an inner state of mind that activates and directs the
behavior of entrepreneur toward achieving the goal of successful enterprise. Among
the motivation theories related to entrepreneurship, the Need Hierarchy Theory of
Maslow is the most relevant to this study (Khanka 2002). Two among the five types of
Maslow theory to motivate people to become entrepreneurs in low income countries
like Nepal are physiological needs (economic rewards to meet basic needs) and safety
and security needs (earn money for economic security and protection).

Two main motivation factors of entrepreneurs are push or necessity and pull or
opportunity. The former is termed as negative circumstance, whilst the latter is
positive circumstance. Pull factors encourage potential entrepreneurs by virtue of
attractiveness options like financial reward, independence, need for achievement,
social recognition etc. Family background or support usually acts as a positive factor
for entrepreneurship. Push factors are due to unemployment, job insecurity, less
attractive, etc. In Nepal, the main motivation factor for entrepreneurs is to earn
money due to majority of the people without adequate income (Ranabhat 1995;
Tuladhar 1996).
52 Gyanu Maya Pun

Challenging Factors
Saying has it that any new venture is challenging. Successful entrepreneurs overcome
several challenges in running enterprises. Existing studies indicate that barriers to
entrepreneurships are of internal and external nature. Lack of self-confidence,
assertiveness, communication skill, motivation, etc comes under internal barrier:
Whilst lack of basic management training, lack of ability to market the product, etc
comes under external barriers. Khanka (2002) has broadly classified barriers into
economic and non-economic factors. The economic factors comprise financial capital,
labor, raw materials, and market, whereas the non-economic factors may include
legitimacy of entrepreneurship, mobility, socio-cultural values, etc. The economic
factors are, however, prerequisites for the start-up of any enterprising activities, for
their continuation and expansion as well. Easy access to institutional source for credit
is a basic hurdle for enterprising activities, particularly in rural areas of Nepal. In
absence of institutional credit facility, the credit from informal sources is often not
competitive ones due to higher interest rate, which, therefore, results into low saving
pattern. It is applicable more in the case of females than in males in rural Nepal
(Dhakal 2006). If an enterprising activity is contingent upon far-fetched raw materials
and market is at a distance for hauling the finished product, it poses enterprises major
challenges. Other marketing problems of the products in MEDEP districts are damaged
goods; due to poor packaging, credit sales, lower price, etc (Subedi 2006).

Transportation linkages reduce risks production costs and improved easy access to
markets, business ideas, knowledge, and capital (Reavley, Lituchy, and McClelland
2005). The prevailing social values, culture, and perception have become a restraint
to the growth of women entrepreneurs in society (Ranabhat 1995). Restriction in
decision-making and mobility in Nepal has inversely affected the entrepreneurship
ability.

4. Results and Discussions

The studys results are divided into three sections. The first section deals with the
features of the respondents. In the second section, relationship between dependent
and independent variables is analysed. The third section deals with the variables
affecting entrepreneurship ability of the entrepreneurs in terms of logistic regression
analysis.

Characteristics
Socio-demographic
Among the 253 sample entrepreneurs, 150 were females and 103 males, of which 213
were married and 40 were unmarried. The age of the entrepreneurs ranged from 16 to
65 years, with 40 percent of age group of 16-35 years, followed by age group of 36-45
with 26 percent. Among the social groups, 108 were Bahun/Chhetri, followed by Dalits
with 30 percent and Janajati with 27.3 percent. Most of the entrepreneurs (90%) had
attained formal and informal schooling and the remaining 10 percent was illiterate.
 Factors Influencing Entrepreneurship Ability 53
Majority with 221 were born in the same district of Parbat and about 13 percent
migrated to the district.

Business characteristics
Two-thirds (166) of the enterprises were informal, whereas over 34 percent was
registered one. The number of agricultural-based enterprise was 201 in comparison to
52 (21%) of non-farm based enterprises. Individual owners owned 122 enterprises. The
number of enterprises in partnership with two partners was 81 and with more than two
partners were 50. Self-employed enterprises shared 35.2 percent, while the
enterprises with two were the largest (38.3%). The number of enterprises that
generated employments to over two employees was 67. Majority of the enterprises
(77%) have continued their enterprising activity, while only 23 percent have expanded
their size.

Motivational Factors Table 1: Relative distribution of positive

Table 1 lists 11 different responses (n = 253) by motivational factors
motivation factors, of which Variables Number %*
neighbor factor scored nearly 70 1. Neighbor 176 69.6
percent, has been the most vital 2. MEDEP intervention 172 68.0
motivating factor. Next 3. Family/husband 142 56.1
motivating factor is being the 4. Sufficient raw materials 96 37.9
MEDEP intervention (68 %). The 5. Independent work 61 24.1
6. Family background 40 15.8
survey results show that about 36
7. Model person 37 14.6
percent entrepreneurs have
8. Earn money 36 14.2
undertaken enterprises to earn 9. High demand 28 11.1
money. Only 9 percent of them 10. Sufficient laborers 25 9.9
have begun their enterprise due 11. Sufficient capital 22 8.7
to their own sufficient financial Source: Field survey,*Computed from n = 253.
capital. Labour supply has not
been a problem for becoming entrepreneur. Over 60 percent have been motivated due
to sufficiently available raw materials and majority of them have been motivated to
become entrepreneurs due to high demand of their products.

Economic challenging factors

Altogether 13 challenging factors with relative positive response, yes were reported.
Nine problems with over 31 percent are listed in Table 2. Those with below this
percent include machines-importing, repairing machines, labour unavailability and
price rise in raw materials. Access to finance is being the most challenging factor
(64.4%). This is why about 63 percent of the entrepreneurs obtained loan from private
informal sources in initial phase; 21 percent used their own fixed capitals; while about
9 percent obtained credit support from MEDEP. Two other relatively acute problems
include transport unavailability for marketing products and unavailability raw
materials in time. Just over 50 percent of the entrepreneurs have locally made
54 Gyanu Maya Pun

machines for the Table 2: Relative distribution of yes by economic

enterprise. About 13 challenging factors
percent have faced Variables Number %*
high competition for Access Finance 163 64.4
Transport for marketing products 148 58.5
marketing their
Unavailability of raw materials in time 133 52.6
products, whilst 72 Transport for importing raw materials 119 47.0
percent have medium Insufficient of machines 108 42.7
competition. Changed machine 108 42.7
Low market prices of the products 101 39.9
Non-economic Lack of money for raw materials 94 37.2
Competition with imported products 80 31.6
challenging factors
* Computed from total sample size of 253.
The analysis of non-
economic factors draws on five variables like importance of women enterprise,
enterprising decision, family priority work, looking after of business, and membership
to any organization. Fifty-eight percent of the entrepreneurs have given moderate
importance to women enterprise, whilst 21 percent has given high value to it. Decision
with regard to enterprise has primarily been made by spouse and other family
members, each with 40 and 50 percent respectively. Majority of the families with 74
percent have given priority to the business work, but however, about one-third of the
enterprises has been absent in the business work due to household work. About 61
percent has member with social network organization, but only about 46 percent has
related to the business network.

Entrepreneurship ability
Of total 253 entrepreneurs, 140 (55%) have high entrepreneurship ability that have
scored 14 and over2, whilst 113 have got low score3. The efficiency measure has also
been performed at different socio-cultural variables. There is relatively slightly
greater high ability value in the female entrepreneurs than their male counterparts
(57 versus 53 percent. Among the age groups, entrepreneurs with 26-35 years of age
have highest high ability value (60.4%), followed by the age group of 36-45 with 58.5
percent. The married entrepreneurs are found more efficient (58%) against the
unmarried entrepreneurs (42%). In case of social groups, there is no significant
difference in entrepreneurship ability; all three types (Dalit, Janajati and
Bahun/Chhetri) have values lying within 55 56 percent. The entrepreneurs with
formal education have higher entrepreneurship efficiency (59%) as compared to 40
percent of the illiterate entrepreneurs. The migrated entrepreneurs have shown
slightly higher value of entrepreneurship efficiency (63%) than the non-migrated
entrepreneurs (54%).

2
Two parameters with mean = 13.12 and SD = 1.81 indicate that the distribution of score is
fairly good.
3
All the values have been calculated at p<0.10, p<0.05, and p< 0.01 (p- value) based on Chi-
Square statistics.
 Factors Influencing Entrepreneurship Ability 55
Business characteristics and entrepreneurship ability
On the whole, the business features have shown better high ability with 55 percent
as against low ability with 45 percent. These features have been analysed on five
variables at p< 0.01 (based on Chi-square statistics). The registered enterprises have
shown 81 percent high entrepreneurship ability as compared to 42 percent of the
informal enterprises. Likewise, the non-agricultural enterprises have definitely greater
entrepreneurship ability (77%) than the agricultural based enterprises (50%). The
enterprises with two partners and more hired labours (>2) have shown better
entrepreneurship ability than others. Their efficiency values are 72 and 85 percent
respectively. Similarly, the expanded enterprises have better entrepreneurship ability
(71%) than stagnant one (51%), which is obvious, otherwise no enterprises will be
expanded if there is dim chance of improvement.

Motivational factors of the entrepreneurship ability

The enterprises are being highly
motivated by high market demand of Table 3: Relative distribution of yes
their products. It is being measured responses (%) by motivational factors
at 82 percent as high ability for Motivational Low High
entrepreneurship ability. Table 3 factors ability ability
shows that the entrepreneurship High demand products 17.9 82.1
ability measured by all other factors Independent work 21.3 78.7
than adequate laborer has Family background 25.0 75.0
percentage values surpassed largely Entrepreneur-neighbor 33.1 66.9
over the percentage values computed Adequate raw materials 33.3 66.7
for low ability. Role model person 37.8 62.2
Earn money 42.9 57.1
Economic challenging factors and MEDEP intervention 44.2 55.8
entrepreneurship ability Sufficient capital 45.5 54.5
While the entrepreneurship ability Neighbour 46.6 53.4
analysed by the challenging factors, Adequate labourers 72.0 28.0
low ability has got higher relative Total 44..7 55.3
percentages than high ability due to Note: The percentage values are significant
problems in access to finance, mostly at p< 0.01 (Chi-square statistics)
availability of raw materials in time,
machine efficiency, high competition, transport facility, and low market price of the
products. Loan from MEDEP and other sources, machines replaced or maintained, etc
have favorable situations for entrepreneurs to measure their entrepreneurship ability.

Non-economic challenging factors and entrepreneurship ability

The relationship between non-economic challenging factors and entrepreneurship
ability shows mixed results. Low importance to women enterprise, family member,
priority on business work, and membership of any organizations have given high
entrepreneurship ability, whilst high importance to women enterprise and self decision
56 Gyanu Maya Pun

or spouse decision on enterprise matters have shown higher relative percentages for
low ability.

4.3 Logistic Regression Analysis

The logistic regression analysis has been used to predict the measurement scales of
associations between dependent variables and their related independent variables.
Overall, it is found that the socio-demographic characteristics have no significant
influence on the entrepreneurship ability. The measurement scales of
entrepreneurship ability have yielded 1.759 times for formal schooling as against 1.467
of illiterate and 1.699 times for married entrepreneurs over the unmarried. The
business characteristics on the other hand however have shown relatively better
factors to influence the entrepreneurship ability. The enterprises hiring more than two
employees have shown 12.680 times more likely to be. The registered enterprises have
yielded 3.096 times more likely to influence high entrepreneurship ability. The
expanded enterprises have probability value of 1.664 times for high entrepreneurship
ability.

This analysis has placed environmental motivational factors as most influencing one.
For instance, highly demanded products appear 37.747 times more likely to influence
on high entrepreneurship ability. Two other relatively better factors are family
background and adequate raw materials, which have yielded probability values of
4.939 and 3.558 times for high entrepreneurship ability. Other factors have yielded
very low probability values.

Though the problems of economic challenging factors appear to be responsible for low
entrepreneurship ability, their probability measurement scales are unexpectedly very
low with below 1.000 except for changing machines and low market demand. The
latter two variables have shown 3.064 and 2.588 times more likely to be for high
entrepreneurship ability respectively. The non-economic factors are seen relatively
more significant, however. Two factors like priority on enterprise work and enterprises
having network with organization have yielded 8.353 and 4.416 times more likely to
have influence on high entrepreneurship ability. Others non-economic factors have
shown low influencing values.

5. Results and Discussions

Overall, the hypothesis, the socio-demographic characteristics of the respondents
influence on the entrepreneurship ability, has been rejected. Though two factors like
marital status and educational attainment were significant in the bivariate analysis,
they have been insignificant in the multivariate analysis and therefore they also are
being rejected. These results are consistent to several studies carried out in Nepal
(New Business Age 2004). The possible explanation behind it may be these
characteristics can't directly influence the entrepreneurship ability.
 Factors Influencing Entrepreneurship Ability 57
The business characteristics, on the other hand, are found to have likely affect on the
entrepreneurship ability. Except the condition of the enterprises, partners in the
enterprises and types of enterprises, all other factors seem to have positive influence
on the entrepreneurship ability. This result is verifiable with the research result of
Henriquez, et al. (2000), which states that high individualism is associated with more
entrepreneurial behavior. The nonagricultural-based enterprises that have more likely
of high entrepreneurship ability than the agricultural based enterprises seem to be
natural, since the latter are squarely dependent on the natural factors which are
beyond their control, traditional system, etc. Conversely, the former has wide scope
for adopting innovative techniques and systems since they are operated under the
management of human beings. Similar results are found in case of registered and
expanded enterprises. This implies that larger the hiring of employees with the
registered enterprises, the greater would be the potential for expansion.

Of the motivating factors, the environmental factors including family background are
found to have positive influence on entrepreneurship ability. This is consistent with
the results carried out elsewhere in other areas (Tuladhar 1996; Bosma, et al. 2000).
Likewise, other factors like sufficiently available raw materials and high demand of the
products have also shown positive influence on high entrepreneurship ability. That is
why MEDEP has consistently putting emphasis on the enterprises that use local
resources and produce goods according to the market demand.

Strangely, the non-economic factors seem to be stronger than the economic factors to
influence the entrepreneurship ability. Perhaps, it may be due to the lack of facilities
and infrastructure, predominant of primary production sector, faulty government
policies, etc. Among the economic factors, high entrepreneurship ability is likely to
occur due to replacing the old machines by advance ones. In non-economic factors, the
household workload is negatively correlated with entrepreneurship ability. It is argued
that the entrepreneurs with less household workload are more likely to have high
entrepreneurship ability, because they can devote more time to their enterprises.
Networking has mixed result with entrepreneurship ability. In Parbat District, social
network seems to have favorable for the entrepreneurship. The restricted mobility has
positively influenced the entrepreneurship ability, which may be due to high demand
of goods at local markets.

6. Conclusion
This study has made an attempt to identify factors influencing the entrepreneurship
ability of the entrepreneurs. The analysis, based on series of logical steps, has shown
both positive and negative associations. For instance, the socio-demographic
characteristics of the entrepreneurs have shown little positive influences on the
entrepreneurship ability. In case of business characteristics, the status of enterprises
and the number of employees in the enterprises have positive influence on the
entrepreneurship ability, whereas the partners in the enterprises and the types of
58 Gyanu Maya Pun

enterprises have negative influence. The environmental motivating factor (family

background) seems to be more powerful than the other motivating factors to influence
positively on the entrepreneurship ability of the entrepreneurs. Surprisingly, the non-
economic factors seem to be stronger than the economic factors to influence the
entrepreneurship ability. It is found that the entrepreneurs are innovators who are
quite able to handle challenges for their enterprise betterment. It can be concluded
that the non-economic challenges can influence positively on entrepreneurship ability
when they are in favor of the entrepreneurs. It is also found that the non-economic
challenge (mobility) has positively influenced the entrepreneurship ability when it is in
unfavorable situation.

7. Recommendations
Based on the above findings, the study suggests the following recommendations for
further improvement of enterprises and their entrepreneurship ability:
Imparting more knowledge to the rural people about increasing the
entrepreneurship ability of the entrepreneurs should be continuous
Enterprises should be encouraged for registration
Single-owned enterprises require to be stimulated
More enterprises based on the non agricultural activities require to be created and
their entrepreneurship ability should be increased
The government and the concerned stakeholders should create environments so
that the supply of raw materials is available adequately for running the enterprises
smoothly
Market based enterprises should be enhanced
In addition, if a research including both qualitative and quantitative approaches is
conducted in future, it would provide triangular results.

References
Bosma, N., Praag, M.V. and Wit, G.D. (2000), Determinants of Successful Entrepreneurship.
Research Report (Netherlands Ministry of Economic Affairs.www.eim.nl).

Bygrave, W. and Hofer, C. (1988), Theorizing about Entrepreneurship. Entrepreneurship Theory

and Practice. Winter.

Cochran, T.C. (1950), Entrepreneurial Behavior and Motivation, Explorations and

Entrepreneurial History. Vol. 2.

Dhakal, D. P. (2006), Women Empowerment through Micro-Enterprise Development Programme:

A Case Study of Nuwakot District. Master Thesis submitted to Central Department of
Rural Development. Tribhuvan University. Kathmandu. Nepal.

Frear, D. (2007), Rural Female Entrepreneurs: A Demographic Survey in Rural Pennsylvania. The
Jay S. Sidhu School of Business & Leadership, Wilkes University, USA.

Guthier, R. (1992), Entrepreneurship in Nepal: Some Observations on Entrepreneurial

Characteristics and Other Findings. Paper presented at the International Conference on
 Factors Influencing Entrepreneurship Ability 59
Internationalizing Entrepreneurship Education and Training. Dortmund, 23 - 26 June.
1992. Small Business Promotion Project. Kathmandu, Nepal.

Henriquez, C., Verheul, I., Geest, I. V. & Bischoff, C. (2000), Determinants of entrepreneurship
in France. In: Determinants of Entrepreneurship in the United States of America. Chapter
3.

Hisrich, R.D. and Peters, M.P. (2002), Entrepreneurship. New Delhi: Tata McGraw-Hill Publishing
Company Limited.

Hofstede, G. (1991), Cultures and Organizations: Software of the Mind. London: McGraw- Hill.

Huefner, J. and Hunt, K. (1994), Broadening the Concept of Entrepreneurship: Comparing

Business and Consumer Entrepreneurs. Entrepreneurship Theory and Practice. Spring.

Khanka, S.S. (2002), Entrepreneurial Development. New Delhi: Chand & Company LTD.
Knight, F.H. (1965), Risk, Uncertainty and Profit. New York: Harper and Row.
Minniti, M. and Bygrave, W.D. (2003), National Entrepreneurship Assessment, Executive Report.
United States of America.
New Business Age (2004), Shaping Up Entrepreneurship. Kathmandu: Mercantile Communications
Pvt. Ltd.

Ranabhat, B. R. (1995), Women Entrepreneurs in Nepal: their profile, Problems and Prospects.
Small Business Promotion Project. Kathmandu.

Reavley, A., Lituchy, T. Z. and McClelland, E. (2005), Exporting Success: a Two Country
Comparison of Women Entrepreneurs in International Trade. Martha Inderscience
Enterprises Ltd.

Regmi, Mahesh C. (1988), An Economic History of Nepal, 1846-1901. Varanasi: Nath Publishing
House.

Subedi, B. (2006), Products and Services Marketing by Entrepreneurs: A Case of Micro-

Enterprises Development Program in Dhanusha District. Master thesis submitted to the
Central Department of Rural Development, Tribhuvan University, Kathmandu, Nepal.

Tuladhar, J. (1996), Factors affecting women entrepreneurship in small and cottage industries in
Nepal: opportunities and constraints. Advanced Management Journal. Vol. 67.

Verheul, I., Wennekers, S., Audretsch, D. and Thurik, R. (2000), An Eclectic Theory of
Entrepreneurship: Policies, Institutions and Culture. The School for Public and
Environmental Affairs (SPEA), Indiana University, the Faculty of Economics at Erasmus
University Rotterdam and EIM Business and Policy Research in Zoetermeer.