Using Partial Least Squares Structural Equation Modeling to Predict Entrepreneurial Capacity in Transition Economies

  • Matea ZlatkovićEmail author
Conference paper
Part of the Lecture Notes in Networks and Systems book series (LNNS, volume 59)


Many theoretical and empirical studies indicate the significant influence of environmental challenges and characteristics on entrepreneurship. Drawing insights from this research, this paper defines the structural model to analyze synergistic influences of certain elements of Entrepreneurial Factor Conditions on the entrepreneurial capacity in Slovenia and Bosnia and Herzegovina. The analyzed structural model consists of three environmental dimensions – entrepreneurial education and training, cultural and social norms and research and development, and higher-order construct entrepreneurial capacity as a final target dependent variable. Partial Least Squares Structural Equation Modeling analyzed relationships between chosen variables. The obtained results indicate the highest significance of the cultural and social norms of entrepreneurial capacity in both countries. Entrepreneurial education and training does not have the direct effect on entrepreneurial capacity in factor-driven Bosnia and Herzegovina’s economy which suggests that education programs are insufficiently extended with necessary tools for starting and managing the new business. Research and development has an important role in entrepreneurial capacity in both countries because as it yields innovation as a generator of ideas for new business and technological changes creating new opportunities for entrepreneurship activities.


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Authors and Affiliations

  1. 1.Faculty of EconomicsUniversity of Banja LukaBanja LukaBosnia and Herzegovina

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