2 Hypothesis

2.1 Entrepreneurial cognition and entrepreneurial decision

Cognition refers to mental processes including thinking, knowing, remembering, judging, and problem-solving to gain knowledge and comprehension. Cognition is the higher-level functions of the brain, covering language, comprehension, imagination and planning. From the individual’s point of view, entrepreneurial cognition is a knowledge structure which is used to collect and process information, evaluate entrepreneurial opportunity (Mitchell,2002). Entrepreneurial perception of the external environment, opportunities and information, has an important influence on decision-making.

Busenitz & Lau (1996) created a cross-cultural cognitive model of entrepreneurial decision and Mitchell (2002) established an entrepreneurial decision-making model which verified that the individual cognitive has a positive effect on the entrepreneurial decision. Simon Houghton (2007) used cognitive information processing theory to analyze the impact of differences cognitive on the decision-making process of venture capital investment. The study found that entrepreneurs would choose the positive exogenous information in the entrepreneurial decision-making process, and different cognitive also make bias of resources, thereby affecting business decisions. In the research of migrant workers’ entrepreneurial behavior, Guo Quncheng (2011) divided entrepreneurial behavior into four areas, the entrepreneurial plan behavior, entrepreneurial decision-making behavior, entrepreneurship encourage behavior and entrepreneurial cooperative behavior. Entrepreneurial decision-making behavior of migrant workers is made under uncertainty, and awareness of the external environment and entrepreneurial opportunities will affect the entrepreneurial decision-making. Entrepreneurial cognition, an antecedent of individual’s entrepreneurial decision-making, includes entrepreneurial resources, relationships, knowledge and entrepreneurial opportunity. In order to make the conception of entrepreneurial cognition more clearly, we accept the view of Mitchell (2002) and divide entrepreneurial cognition into two dimensions: prepared cognitive and ability cognitive.

In the process of entrepreneurial decision making, entrepreneurs will face uncertain and highly complex external environment, so a higher cognition level is necessary. Therefore, in this complex environment, entrepreneurs have the higher awareness of external resources, environment or opportunities, and the more likely they use the knowledge and ability to make business decisions. Prepared cognitive is the thinking mode of entrepreneurial resource utilization. As far as the new generation of migrant workers is concerned, with a strong prepared cognitive, the entrepreneurs probably think that they have sufficient entrepreneurial resources, to promote the entrepreneurial decision making. Ability cognitive is a knowledge structure, including skills, knowledge, attitudes and so on. The higher ability cognitive indicates the stronger personal ability entrepreneurs have that entrepreneurs may have the stronger personal ability, so they can make full use of information resources and identify entrepreneurial opportunities. It will lead to entrepreneurial decision making. As such, the following hypotheses have established:

Hypothesis 1. Entrepreneurial cognition has a positive effect on the entrepreneurial decision.

Hypothesis 1a. Prepared cognitive has a positive effect on the entrepreneurial decision.

Hypothesis 1b. Ability cognitive has a positive effect on the entrepreneurial decision.

2.2 Entrepreneurial cognition and entrepreneurial intention

In the individual entrepreneurial activity, entrepreneurial perception and entrepreneurial intention have significant connections. Entrepreneurial behavior tends to be affected by exogenous variables, such as individual entrepreneurial attitudes, demographics and individual characteristics. Shane & Venkataraman (2000) used the perspective of cognitive perception to verify the relationship between entrepreneurial cognition and entrepreneurial motivation.

Krueger (2000) constructed the model of entrepreneurial team cognition based on the intention, the higher feasibility and desirability, the stronger entrepreneurial intention they would perceive. Liu Zhongming & Wei Liqun (2003) constructed the model of entrepreneurial cognition processes and organizational expansion decision, and analyzed the impact of entrepreneurship cognition antecedents, such as social environment, cultural values and personal factors, which influenced on entrepreneurial cognition and entrepreneurs intention. Liñán & Yi-Wen Chen (2009) used the comparative study of Spain and Taiwan samples; individuals had a higher degree of self-cognition which were more likely to believe they would start a business. Therefore, entrepreneurial cognition is the awareness and understanding of entrepreneurial behavior and entrepreneurial cognition and intention have a positive correlation relationship.

Entrepreneurial cognition processes include the process of receiving and evaluating information, responding and dealing with problems, predicting the results of entrepreneurship. Specifically, the new generation of migrant workers have the stronger prepared cognitive, the greater awareness of entrepreneurial resources and environment, and they will fully understand the information on entrepreneurial confidently. Meanwhile, with more favorable business relationships and attractive products or services, the business confidence will be enhanced. The stronger ability cognitive indicate that the entrepreneur has a good knowledge and ability to identify entrepreneurial opportunities, which can make an accurate judgment on the market, respond to the changing market conditions effectively, enhance the confidence of entrepreneurial activity. Thus entrepreneurs have a strong desire for entrepreneurial activities. As such, the following hypotheses have established:

Hypothesis 2. Entrepreneurial cognitive has a positive effect on entrepreneurial intention.

Hypothesis 2a. Prepared cognitive has a positive effect on entrepreneurial intention.

Hypothesis 2b. Ability cognitive has a positive effect on the entrepreneurial intention.

2.3 Entrepreneurial intention and entrepreneurial decision

Intention is an important predictor of individual behavior, while an entrepreneur plays a decisive role in individual decisions. Fishbein & Ajzen (1975) raised a research framework about beliefs, attitudes, intention, behavior, and illustrated the role of entrepreneurial intention by empirical study. In entrepreneurship research, the relationship between entrepreneurial intention and the entrepreneurial decision has also been verified by some theoretical studies and model analysis.

Ajzen (1991) proposed the theory of planned behavior that individual behavior directly depends on a specific behavior intention. Individual’s behavioral intentions are stronger; they may have the greater possibility to carry out entrepreneurial activities. The theory of planned behavior provides a theoretical basis for entrepreneurial decisions. Fan Wei & Wang Chongming (2004) constructed a model of entrepreneurial intention factors and designed the entrepreneurial intention scale and “Big Five” personality inventory. College students with higher entrepreneurial intention were more likely to make an entrepreneurial decision. In this study, we use entrepreneurship feasibility and entrepreneurial desirability to measure entrepreneurial intention (He Dan, 2006). Entrepreneurial feasibility is the possibility of an individual entrepreneurial career in the future. Entrepreneurial desirability is whether an individual has a detailed business plan or understand of the situation before entrepreneurial activity.

The entrepreneurial intention is a potential psychological state of entrepreneurial behavior, including an individual assessment of their quality, the subjective assessment of external factors, and making business decisions based on the evaluation. Entrepreneurial intention can encourage individuals to achieve some entrepreneurial activity and gather relevant information, thus protecting the creation of new businesses. With fully understanding the external environmental factors, potential entrepreneurs will use a variety of useful resources obtained from external, generate subjective ideas and willingness, which is one of the best predictors of entrepreneurial decisions. The new generation of migrant workers with higher entrepreneurship feasibility can be able to understand their ability and entrepreneurial resources fully, then more likely to choose entrepreneurial in the future. The new generation of migrant workers who have the higher will concern about entrepreneurship advocacy and knowledge of the processes, learn more knowledge about entrepreneurial activities in the future and make a more detailed plan. It is conducive to entrepreneurial activity. As such, the following hypotheses have established:

Hypothesis 3. The entrepreneurial intention has a positive effect on the entrepreneurial decision.

Hypothesis 3a. Entrepreneurial feasibility has a positive effect on the entrepreneurial decision.

Hypothesis 3b. Entrepreneurial desirability has a positive effect on the entrepreneurial decision.

2.4 The mediating of entrepreneurial intention

In recent years, there have been a growing number of studies on the relationship among entrepreneurial cognition, entrepreneurial intention and entrepreneurial decision. Most studies generally considered entrepreneurial cognition can promote decision, and then spur entrepreneurs in creating new businesses.

Ni Feng & Hu Xiao-e (2007) constructed an entrepreneurship development model, which confirmed intention had played an intermediary role between individual entrepreneurial cognition and entrepreneurial behavior. The entrepreneurial decision is an essential part of entrepreneurial behavior. Therefore we can consider pioneering entrepreneurial intention have a particular influence on entrepreneurial cognition and entrepreneurial decisions. Krueger & Day (2010) suggested that before entrepreneurs made entrepreneurial decision-making, they would produce the perception of entrepreneurial opportunities, and explore the willingness of entrepreneurial opportunities. The entrepreneurial intention was driven by the critical attitude of the individual, and entrepreneurial cognition was the factor of affecting the attitude of the individual knowledge construction. Entrepreneurs have preliminary understanding of the entrepreneurial environment, resources of an industry, a previous recognition and awareness about their ability in their previous career development. Meanwhile, the existing business policies and intention to change the status quo will stimulate the interest of entrepreneurial, thus significantly improve the entrepreneurial intention, in turn move the individual toward carring out entrepreneurial activities. As such, the following hypotheses have established:

Hypothesis 4. Entrepreneurial intention plays a mediation role in the relationship between entrepreneurial cognition and entrepreneurial decision.

Based on the above documents and assumptions made, a study framework is set-up as shown in Figure 1.

Figure 1 Theoretical Framework of New Generation of Migrant Workers’ Entrepreneurial Cognition, Entrepreneurial Intention and Entrepreneurial Decision