Effectuation and Self-Efficacy as Predictors ofEntrepreneurial Intention: A Comparative Analysis of Millennials and Generation Z in the Creative Economy Era

Abstract

The rapid development of the creative economy and digital transformation has increased the need for young entrepreneurs who are adaptive to uncertainty and dynamic business environments. Millennials and Generation Z, as the dominant demographic groups, possess distinct psychological characteristics that may influence entrepreneurial intention differently. Therefore, a deeper understanding of the factors shaping entrepreneurial intention across these generations is essential. This study aims to examine the effects of effectuation and self-efficacy on entrepreneurial intention and to compare the strength of these relationships between Millennials and Generation Z. A quantitative cross-sectional survey design was employed involving 300 respondents, consisting of 150 Millennials and 150 Generation Z individuals who were engaged in or interested in Indonesia's creative economy sector. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) followed by Multi-Group Analysis (MGA). The findings reveal that effectuation has a positive and significant effect on entrepreneurial intention (beta = 0.421; p < 0.001). Similarly, self-efficacy positively and significantly influences entrepreneurial intention (beta = 0.364; p < 0.001). The multi-group analysis demonstrates a significant difference in the effect of effectuation on entrepreneurial intention between Millennials and Generation Z (p = 0.019), with the relationship being stronger among Generation Z. In contrast, no significant difference is found in the effect of self-efficacy on entrepreneurial intention between the two generations (p = 0.361). These results suggest that effectuation is a generation-sensitive factor in shaping entrepreneurial intention, whereas self-efficacy represents a more universal psychological determinant across generations. This study contributes theoretically by integrating Effectuation Theory and Social Cognitive Theory in explaining entrepreneurial intention across generations. Practically, the findings provide valuable insights for the development of entrepreneurship education programs and business incubation initiatives tailored to the characteristics of Millennials and Generation Z, thereby supporting the strengthening of Indonesia's creative economy ecosystem.