Motivational Factors to Become Halalpreneurs: Evidence from SMEs in Malaysia

Abstract

The demand for halal products has been increasing and has gained intense interest within the global business community. This agenda has been supported by the government and related agencies in promoting halal business opportunities. Therefore, it is important to investigate the entrepreneurial motivation of entrepreneurs in Small and Medium Enterprises (SMEs) to become halal entrepreneurs or halalpreneurs. Hence, the Theory of Reasoned Action (TRA), Theory of Planned Behaviour (TPB) and Miniard and Cohen Model (MCM) were applied and empirically tested on the sample population to obtain the motivational factors of SMEs. Data were collected using structured questionnaires given to a total of 200 Muslim entrepreneurs in Malaysia. However, completed questionnaires were returned 81 in total, giving a return rate of 41 per cent. The sample size (N=81) is relatively small; however, it exceeds the commonly recommended thresholds of 10-15 observations per estimated independent variable. Based on this justification, this model is still able to provide interpretable insights into how each variable influences the outcome, although the small sample size may reduce the accuracy in coefficient estimates. Structural equation modelling techniques and Smart PLS were used to analyze the data. The results indicated that personal influence (P) and normative influence (N) significantly affected entrepreneurial intentions among SMEs. Meanwhile, attitude, subjective norms and perceived behavioural were found not significant to influence the SMEs motivation to become halalpreneurs. Future research should replicate the model using a larger sample size to enhance statistical power and to determine whether the non-significant results were due to sampling constraints in the present study.