Self-Efficacy as a Mediator of the Impact of Social Capital on Entrepreneurial Orientation: A Case of Dayak Ethnic Entrepreneurship

Amid global disruptions caused by the COVID-19 pandemic, entrepreneurship is more important than ever before, believed to be a key driver of economic development and recovery as well as poverty alleviation. However, although research on entrepreneurial benefits is becoming well-established, our understanding of the effects of specific social processes on entrepreneurial orientation is fairly limited. The research gap is even larger in an ethnic entrepreneurship setting. This study, therefore, aims to understand the impact of social capital on entrepreneurial orientation through self-efficacy in Dayak, the indigenous ethnic, non-Malay people of Borneo. Utilizing a survey, we found that social capital is positively related to entrepreneurial orientation, and self-efficacy was found to mediate this relationship. Kinship or regional ties among Dayak group members foster social capital in the form of trust, solidarity, and reciprocal obligations. However, although Dayaks are willing to learn and participate in economic activities, including becoming entrepreneurs, they are unlikely to take initiative due to both financial and non-financial obstacles. For these reasons, we suggest an institutional economic approach, designing a specific educational program to help improve the Dayak’s self-efficacy in escalating their entrepreneurship commitment. Local universities and vocational schools can develop an effective curriculum to tap the potential of Dayak in business and entrepreneurship.