Family economic education, peer groups and students' entrepreneurial intention: the mediating role of economic literacy.

Stimulating potential entrepreneurs is a global challenge and policymakers need to understand factors affecting students' entrepreneurial intention. The growing body of literature has focused on the impact of entrepreneurship education and entrepreneurial intention, while this study aims to explore other predicted factors affecting students' entrepreneurial intention, such as family economic education, peer groups, and economic literacy. This study adopted a quantitative method using a survey approach to obtain comprehensive findings. The research involved online questionnaires to approximately 1000 students undergoing convenience sampling in a university in Indonesia as participants. The results indicated that both family economic education and peer groups positively correlate with economic literacy and students' entrepreneurial intention. These results confirmed a crucial role of economic literacy that government and educational institutions can consider to stimulate students' entrepreneurial intention. This study also contributes to the educational sector and governments to facilitate the creation of student-working groups in entrepreneurship as an attempt to encourage students' engagement.

Introduction

Diminishing unemployment rates has been a government concern in various countries, including Indonesia. With the vast population, Indonesia has opportunities to overcome this issue through entrepreneurship (Karyaningsih et al., 2020). In fact, among the existing potential sectors in Indonesia, for example, the agricultural, plantation, and mining sectors have insufficiently absorbed the available labor supply (Mahmudah, 2017). Some scholars believe that the entrepreneurship sector plays a significant role in the economy of a country through new job creations (Sher et al., 2020). Therefore, increasing entrepreneurial activities will pervade the labor supply in the productive sector that can reduce unemployment as well as poverty alleviation (Elmi and Robleh, 2019; Camba, 2020).

Given the essential role of entrepreneurship, the Indonesian government has responded by providing entrepreneurship programs for both universities and vocational schools to enhance new entrepreneurs (Hermanto et al., 2017; Saptono et al., 2020). In the university context, the Indonesian government has continued the entrepreneurship programs for university students. For instance, the program covers 1000 entrepreneurs from college graduates, students’ creativity club, entrepreneurship training and strengthening social assistance, and sponsorship from corporate social responsibility (Kaijun and Sholihah, 2015). Simultaneously, the government has also focused on revitalizing the new entrepreneurial curriculum for vocational schools to stimulate entrepreneurial intentions (Wardana et al., 2020).

In addition to educational practice, the study on entrepreneurship and entrepreneurial intention has also been on the rise. Numerous studies have concerned with entrepreneurship education factors in determining students' entrepreneurial intention (Li and Wu, 2019; Jena, 2020; Karyaningsih et al., 2020), while several potential factors, such as family economic education, peer groups, and economic literacy have overlooked by scholars. Economic literacy relates to understanding the basic concept of economics and its implementation on how individuals behave and make economic decisions (Nurjanah et al., 2018). In relation to entrepreneurial intention, economic literacy takes a role as a fundamental economic behavior to achieve an individual's welfare (Rustantono et al., 2020). Economic literacy is essential for people in assisting them in the decision-making of economic and entrepreneurial activity (Harsoyo et al., 2017).

Apart from economic literacy, the family also has a considerable share in providing education for community life (Dilek et al., 2018). The family economic education enables a direction to the conditions of prosperity that the child expects in the future (Narmaditya, 2013). Education in a family also contributes to better economic literacy and promotes an opportunity career as an entrepreneur in the future (Setiawan et al., 2020). In detail, a preliminary study by McQuiggan and Megra (2017) notes that family education has acquainted with lifelong skills, career choices, basic investment skills, and achieving goals. For these matters, a family becomes the first and primary education for children to make decisions, including being entrepreneurs (Suratno et al., 2020).

In regard to the family education, an individual's behavior is also linked with peer group action (Suratno, 2014). The fundamental rationale is that peer groups have high interaction and involvement activities that influence each other. A peer group is the second environment after the family which consists of people with a majority who have the same interests and goals. A prior study by Amati et al. (2018) remarked that the satisfaction quality in friendship is positively related to daily activities, including the decision-making in consumption as well as entrepreneurial pursuit. Accordingly, Schutte and Loi (2014) concluded that peer groups can affect students' emotional intelligence in the long run, and it is also involved in decision-making for entrepreneurship.

The present study provides the following contributions. This study presents an insight into the literature on stimulating students’ entrepreneurial intention by elaborating economic literacy, family economic education, and peer groups that are missing in the preliminary works. However, existing studies have focused on the connectivity between entrepreneurial intention (Jena, 2020; Li and Wu, 2019), self-efficacy (Hsu et al., 2019), and entrepreneurial mindset (Karyaningsih et al., 2020). Second, the focus study in Indonesia is unique as it contributed to the unemployment rate of university graduates. Lastly, this study offers a potential solution for the government and educational institutions in enhancing the intention of being entrepreneurs besides entrepreneurship education in the formal context.

The paper is provided as follows. Section 1 presents an overview of the background of entrepreneurial intention in higher education. Section 2 reviews the preliminary studies of determinant factors affecting students' entrepreneurial intention and focuses on the relation between variables. This is followed by an illustration of sample collection and examination methods used in this study. Section 4 and section 5 provide the study's findings and discussion and followed by the conclusion in section 6.

Literature review

This section reviews the literature related to entrepreneurial intention in universities from various sources and relevant research. In addition, the literature discusses how family economic education, peer groups are linked with economic literacy and the students’ intention of being entrepreneurs.

Family economic education

Family economic education is increasing importance to ensure economic activity and behavior (Kim and Lee, 2020). In particular, family economic education is performed in habituation, exemplary, and explanation by parents or family members (Rahmatullah et al., 2020). Additionally, Chae et al. (2010) argues that the process of forming habits that are instilled in children as the child grows and develops. For instance, model family economic education can promote self-confidence, commitment, optimism, initiative, and creativity. According to Nabavi (2012), the social cognitive learning process occurs in the model behavior and the internalization learning process. This implicates the social cognitive learning process by means of observation through imitation of the model's behavior in relation to an individual interest in entrepreneurship (Wang et al., 2019). Some preliminary studies also confirm that the transfer of knowledge through family economic education offers valuable insights into how economic education can make a difference in the regeneration process of business successors in small businesses, particularly about entrepreneurial attitudes and entrepreneurial intentions (Hutagalung et al., 2017; Hutasuhut, 2018; Wardana et al., 2020).

In addition to family economic education, Schell et al. (2018) notes that a family is a social group, this is characterized by communal living, economic and reproductive cooperation. From several aspects of family education for children, the economic understanding has a robust influence in the process of maturing children towards an independent and prosperous life (Theodora, 2016). The aspect of economic education is considered important due to it drives satisfactory economic attitudes and economic literacy (Narmaditya, 2013). Some empirical studies have documented that the role of the family is closely related to the moral development and competence of children (Cullen et al., 2010) and economic literacy (Dilek et al., 2018). Children's development tends to learn by seeing and imitating the surrounding environment, which these processes trigger to raise their awareness (Wulandari and Narmaditya, 2018). A prior study by Rahmatullah et al. (2020) also confirms that individuals who learned a lot about managing finances and economic issues from their parents had higher economic knowledge, which proxied by economic literacy. Therefore, this study provides the following hypothesis:

H: Family economic education positively impacts entrepreneurial intention.

H: Family economic education positively impacts economic literacy.

Peer groups

Peer groups as a social environment are often perceived as being value-relevant for individual behavior. It has long been a belief that the social environment also influences the experiences, behavior, and activities carried out by an individual in their daily lives (Reimers et al., 2018). Preliminary studies and empirical evidence have a positive relationship between peer groups and individual intentions (Henley et al., 2017; Mishra et al., 2018). A peer group is the second environment after the family which consists of people with a majority who have the same interests and goals (Nesi et al., 2018). Kenney and Dennis (2019) remarks that peer groups through interpersonal interactions, provides assistance and material from close social relationships so that individuals feel cared for, valued, and respected in mutual communication and obligations. In this context, peer groups involved in entrepreneurial activities are more likely to affect its member to do the same. A preliminary study by Moog et al. (2015) reveals that groups provide support in a positive and a negative direction, including in entrepreneurship.

Several prior studies, for instance, Nabi et al. (2018), notes the importance of peer support and tutor involvement in entrepreneurial intention for students. Additionally, Handayati et al. (2020) points out that peer groups will affect someone's intention to become entrepreneurial. The influence of the peer group entrepreneurial intentions was also reinforced by Ozaralli and Rivenburgh (2016); Iskandar and Rahmayanti (2018). In acquaintance with economic literacy, peer groups also impact the tendency to learn and understand economic issues as well as in decision-making. In detail, economic literacy covers how to obtain the expected economic resources as a source of income, how to use economic resources efficiently and effectively, and choose the preferred way of life (Ahmed et al., 2020). Therefore, this research proposes the following hypothesis:

H: Peer group positively impacts entrepreneurial intention.

H: Peer group positively impacts economic literacy.

Economic literacy

Economic literacy is a highly crucial issue for individuals. This is due to the fact that economic literacy drives economic behavior. An antecedent study by Tovazzi et al. (2020) argues that literacy in terms of subjective beliefs that a person has a possible response to multiple questions, and the distribution of subjective beliefs, is not just an answer to a true-false or multiple-choice question. Remund (2010) adds that literacy can be used as a benchmark to measure the belief that someone knows facts. Economic literacy is an essential characteristic of economic behavior (Potrich and Vieira, 2018). Economic literacy is required for all citizens in making choices as sources of income and alternative choices for consumers (Lusardi and Mitchell, 2014). This means that economic learning cannot be limited to a particular group of students, such as the workforce or for those who will become future government leaders alone, but universities must also equip students about economics and business (Hashim et al., 2013). Economic literacy is critical in all countries to prepare students for the changing world financial system (Jappelli, 2010). Students will need more understanding of economics to participate actively in a changing global economy (Walstad and Allgood, 1999). Based on the description of economic literacy shows that economic literacy consists of two aspects. First, economic knowledge and economic attitudes aspect are a derivative of economics subject understanding from various literature (Happ et al., 2016). Economic literacy itself is not a goal but a tool to achieve goals (Sina, 2012; Nurjanah et al., 2018). Thus, the study presents the following hypothesis:

H: Economic literacy positively impacts entrepreneurial intention.

H: Economic literacy mediates the influence of family economic education and entrepreneurial intention.

H: Economic literacy mediates the influence of peer groups and entrepreneurial intention.

Method and materials

This study adopted a cross-sectional survey with a quantitative approach to answer the hypotheses proposed. In detail, it aims to confirm the relationship between family economic education, peer groups, and entrepreneurial intention as well as understand the mediating role of economic literacy (See Figure 1). This research was conducted at Universitas Jambi of Indonesia considering various demographic respondents, including Malay, Chinese, Javanese, and Jambi Tribes. The study employed a convenience sampling that was largely applied in entrepreneurship studies (Nowinski et al., 2019; Batool et al., 2015). The Google form platform was involved in performing the online survey used for data collection. A total of 1050 participants were acknowledged in this survey, and approximately 1001 respondents completed information used for further analysis (See Table 1 for detailed respondents). The questionnaires were first distributed via students’ email and WhatsApps on 12 September 2020 and followed up in the next two weeks. Respondents in this study were students who came from all faculties of Universitas Jambi and volunteered without coercion. The Institutional Review Board approved all ethical issues of Universitas Jambi, and the respondents were asked their anonymity.

Figure 1

The research framework. Source: own elaboration based on Linan and Chen (2009); Walstad and Robson (1997); Koch et al. (2015); Bruckner et al. (2015); Zapkau et al. (2015); Saptono (2018); Handayati et al. (2020).

Table 1

The demographic participants.

S/No.	Categorical	Frequency	Percentage
1.	Gender
	Female	356	35.56
	Male	645	64.44
2.	Year class
	2016	145	14.49
	2017	161	16.08
	2018	305	30.47
	2019	390	38.96
3.	Parents' occupation
	Entrepreneur	600	59.94
	Teacher/Lecturer	120	11.99
	Farmers	141	14.09
	Civil Servants	110	10.99
	Soldier	30	3.00
4.	Subject
	Management	195	19.48
	Economic Education	193	19.28
	Accounting	90	8.99
	Islamic Economic	60	5.99
	Engineering	30	3.00
	Guidance Counseling	37	3.70
	Educational Management	80	7.99
	Agribusiness	30	3.00
	Agrotechnology	70	6.99
	Agriculture	52	5.19
	Physics	76	7.59
	Law Studies	88	8.79

We adapted the six-item instruments developed by Linan and Chen (2009) to estimate the entrepreneurial intention (EI) variable, while nine items developed by Walstad and Robson (1997); Koch et al. (2015) were performed to measure Family Economic Education (FEE). Furthermore, we measured the Economic Literacy (EL) using the 12 items developed by Bruckner et al. (2015); Koch et al. (2015), and 13 instruments from Koch et al. (2015) for estimating the peer groups (PG). The study engaged a Likert scale of 1 (strongly disagree) to 5 (strongly agree) to represent the respondent's answer. Lastly, to analyze each variable's data, we approved the Structural Equation Modeling Partial Least Squares (SEM-PLS) with SmartPLS software tools (version 3.0).

Data analysis and results

Demographic respondents

The sample population for this study elaborated on 1001 Universitas Jambi students in Indonesia. Table 1 informs the details of respondents' demographics involved in this study. In general, the majority of respondents were dominated by female students, with a percentage of approximately 65 percent. This survey research incorporated all grades years studies with 2019 class as the highest portion. What stands out in Table 1 was the variability of parents’ job of students, which was dominated by entrepreneurs (59.94%), followed by farmers and teachers/lecturers, respectively. Furthermore, the study covered various field studies of respondents, including Economic education, Management, Accounting, Islamic studies, Engineering, Guidance Counseling, Educational Management, Agriculture, Physics, and Law studies.

Outer model evaluation

The data estimation in this study followed the SEM-PLS analysis procedure by Chin (1998); Hair et al. (2020), consisting of the outer model test, inner model estimation, the goodness of fit test, and hypothesis test. In more detail, in the outer model estimation, the criteria to determine the convergent validity when the loading factor is higher than 0.70 (Hair et al., 2020). What is striking in Table 2 informed that the loading factor (λ) of family economic education, peer groups, economic literacy, and entrepreneurial intentions range from 0.713 to 0.870, indicating that all variables satisfied the convergent validity.

Table 2

Outer model estimation.

VA	Code	Item	λ
FEE	fee1	The knowledge provided by parents related to entrepreneurship	0.777
	fee2	Encourage parents to siblings to become successful people through entrepreneurial activities.	0.764
	fee3	According to your assessment, knowledge related to business ventures	0.784
	fee4	The attitude of parents when you talk about things related to entrepreneurship	0.840
	fee5	How is the support of parents and other close relatives if you want to become entrepreneurs	0.816
	fee6	According to your judgment, what is the attitude of parents about the entrepreneurial profession	0.838
	fee7	In your opinion, parent support in funding if you want to start entrepreneurial activities	0.806
	fee8	Moral support for parents and family if you want to be an entrepreneur	0.826
PG	pg10	If a friend asks me to practice entrepreneurship, I am very enthusiastic	0.818
	pg11	The intensity of hanging out with friends or friends who have business activities	0.802
	pg12	The intensity with friends discussing the future after college	0.728
	pg13	The intensity with friends discussing successful life through entrepreneurial activities	0.818
	pg4	I will be very happy if my friend invites me to visit people who already have business ventures	0.725
	pg6	With friends often discuss entrepreneurship	0.800
	pg7	Discuss the joys of being a successful entrepreneur	0.832
	pg8	Discuss business ideas after graduation	0.785
EL	el10	I will choose the best item with the lowest price as much as I can	0.826
	el11	I will buy the best goods and services that can possibly be paid for.	0.791
	el12	In buying goods, I will bid or compare prices before deciding to pay	0.781
	el2	Because the assets and money that are owned by people are limited, they must prioritize needs over desires.	0.770
	el4	Because resources are limited, needs must take precedence over wants.	0.766
	el9	Because the amount of money that is owned is limited while the need is large, it must be done with a priority scale of needs.	0.805
EI	ei1	I am ready to do anything to become an entrepreneur	0.713
	ei2	My goal is to be an entrepreneur	0.805
	ei3	I will make every effort to start and run my own company	0.851
	ei4	I was determined to make the company of the future	0.852
	ei5	I have seriously thought about starting a business	0.870
	ei6	I have robust intentions to start a business in the near future	0.853

Note: Loading (λ), VA = Variable, FEE = family economic education, EI = entrepreneurial intention, PG = peer groups, EL = economic literacy.

With regard to convergent validity, we also examined the discriminant validity for each variable. This study adopted Hair et al. (2013; 2020) to perform this test with cross-loading value criteria should higher than 0.70. What can be clearly seen in Table 3, the variable of EI, EL, FEE, dan PG have a cross-loading value of upper 0.70, implicating these variables have met the convergent validity.

Table 3

Discriminant validity.

	EI	EL	FEE	PG
EI	0.826
EL	0.576	0.790
FEE	0.675	0.561	0.807
PG	0.748	0.596	0.756	0.790

Fornell and Larcker (1981) and Chin (2009) suggested that the cross-loading value between variables is not robust and reliable enough to determine discriminant validity. Therefore, we also used a heterotrait-monotrait (HTMT) ratio by Henseler et al. (2020) with the criteria of value ratio <0.90. From Table 4, it can be seen that the value ratio of all variables has satisfied the criteria.

Table 4

Heterotrait-monotrait ratio.

	EI	EL	FEE	PG
EI
EL	0.641
FEE	0.734	0.621
PG	0.820	0.665	0.824

Inner model evaluation

In addition to the outer model test, we engaged in several tests: collinearity test, R-squared (R2) test, F-squared (f2) test, and Q-squared (Q2) predictive test to estimate the inner model. To criteria of the collinearity test is indicated when the value of VIF is less than 5.00. Table 5 provides information about the completed collinearity estimation from variables of EI, EL, FEE, and PG, which have a VIF value of under 5.00. These results showed that those variables do not indicate any collinearity that can be used for further analysis.

Table 5

Variance inflation factor (VIF).

Variable	EI	EL	FEE	PG
EI
EL	1.623
FEE	2.438	2.331
PG	2.594	2.331

With respect to the collinearity calculation, the R-squared (R2) test was performed to know whether the latent endogen variables have a portion to predict the model (Hair et al., 2013). To estimate the R2 test, we followed Chin (1998) with the indicator: 0.67 (robust), 0.33 (moderate), and 0.19 (weak). From the statistical calculation, it can be seen that EL has a value of 0.384, meaning that 38.4 percent of the EI variants can be explained by FEE and PG with a moderate predictive level. Furthermore, EI has an R2 value of 0.675, indicating that the EI variant can be performed by FEE, PG, and EL with a robust predictive level. Next, we performed the F-squared (f2) test to understand how the degree of the influence of the predictor latent variable (exogenous latent variable) on the structural model. Hair et al. (2013); Chin (1998) documented the f2 test criteria, including 0.02, 0.15, and 0.35 for the influence of small, medium, and large sizes, respectively.

The relevant prediction of Q-squared (Q2) aims to measure how well the model and the parameter estimation generate the observed value. The value of Q2 > 0 shows that the model has a predictive relevance value, while the value of Q2 < 0 indicates that the model lacks predictive relevance. From the estimation, it was known that the Q2 value of the FEE, PG, EL, and EI variables is greater than 0, implicating that the model has a predictive relevance value. The final procedure was a fixed evaluation of the goodness of fit of the measurement model (outer) and the structural model (inner) based on the research findings. Hair et al. (2013; 2020) provided criteria that the model meets the goodness of fit when Cronbach's Alpha (α) is >0.70, composite reliability (CR) > 0.70, and Average Variance Extracted (AVE) > 0.50. What can be clearly seen in Table 6 is the result of the goodness of fit test, which showed that the α, CR, and AVE values of all variables satisfied the criteria for the goodness of fit model developed by Hair et al. (2013, 2020).

Table 6

Evaluation result of goodness of fit for outer model.

Information	α	CR	AVE	Decision
Family Economic Education (FEE)	0.923	0.937	0.651	Good/Fit
Peer Groups (PG)	0.913	0.930	0.624	Good/Fit
Economic Literacy (EL)	0.880	0.909	0.624	Good/Fit
Entrepreneurial Intention (EI)	0.906	0.928	0.682	Good/Fit

The next process is hypothesis testing undergoing the SEM-PLS analysis with the bootstrap resampling method. This section's decision is t-count should be ≥1.96, and the p-value (probability) should less than 0.050 to confirm whether the hypothesis was accepted or not (Hair et al., 2020). As informed in Table 7 and Figure 2, all the hypotheses were accepted, considering the t-value ranges from 2.129 to 9.441 (>1.96), while the p-value ranges between 0.000 and 0.033 (<0.050).

Table 7

The summarize of hypothesis testing.

Hypothesis	Relationship	Path-β	T-value	P-values	Decision
H1	FEE → EI	0.214	4.489	0.000	Accepted
H2	PG → EI	0.488	9.441	0.000	Accepted
H3	EL → EI	0.165	2.634	0.009	Accepted
H4	FEE → EL	0.257	3.617	0.000	Accepted
H5	PG → EL	0.402	5.386	0.000	Accepted
Indirect Effects
H6	FEE → EL → EI		2.129	0.033	Accepted
H7	PG → EL → EI		2.366	0.017	Accepted

Note: FEE = family economic education; EI = entrepreneurial intention; EL = economic literacy; PG = peer groups.

Figure 2

The Result SEM Analysis. Source: own elaboration by Authors.

Discussions

The first hypothesis in this research sought to examine the impact of family economic education on students' entrepreneurial intentions. Based on the previous calculation, family economic education has a significant positive effect on entrepreneurial intentions. This result may be explained by the fact that the majority of students came from entrepreneurs' families. Through direct practical and habituation, family economic education has successfully driven students' entrepreneurial intentions. This finding is in line with some prior studies conducted by Looi et al. (2015); Denanyoh et al. (2015), which remarked that family involvement is a factor that can influence a person's entrepreneurial interest. Family circumstances can affect a person's career, including their children's opportunity to be an entrepreneur in the future (Owusu et al., 2018). This study also confirmed that parents who have their businesses tend to have a great intention of being entrepreneurs for their children. The finding reinforced the ideas of Zapkau et al. (2015) that parents or families are foundations for children's preparation for the future career and become effective workers with the entrepreneurial-minded. Indeed, Masten (2018) noted that the family is the first social group in human life that initially has a deep influence on children. This study also strengthens Farrukh et al. (2017), who mentioned that family factors influence students' interest in entrepreneurship, and Herdjiono et al. (2017) prove that there is a significant influence between the family environment and engagement through education on the interest in entrepreneurship.

With respect to the first hypothesis, the study's finding also confirmed a robust correlation between family economic education and economic literacy. The fundamental rationale is that children tend to act and behave regarding what they see, hear, and know from the closest circumstances (Smith et al., 2020). This result agrees with Narmaditya (2013) who remarked that family economic education highly supports the development of economics understanding in the term of making daily economic decisions. Similarly, Hart (2013) documented that the family's role and function are closely related to the children's socialization to their environment. Socialization has given children to their environment that consists of a process by which a child acquires knowledge, skills, and attitudes relevant to his or her function as part of the community and environment. This refraction will form a mindset manifested in their habitual action, including an understanding of economic and its implementation or well-known as economic literacy.

This survey research also highlighted the role of peer groups in determining entrepreneurial intentions. This result is consistent with the peer group's idea, which has a significant influence on individual intention. The basic reason is that students spend time with their friends as being figures in deciding their decision. This is in line with the results of research by Lingappa et al. (2020), mentioning that peer interaction and entrepreneurial knowledge affect entrepreneurial readiness. As stated by Reitz et al. (2014) from psychological perspectives, peer groups are the first social environment in which adolescents learn to live with other people who are not family members. Peer interaction can provide insight into fellow friends so that entrepreneurial readiness can be created. This is due to the fact that becoming an entrepreneur requires a process, starting from changing one's identity, mindset, and how to implement (Saptono et al., 2020). There are various processes to become an entrepreneur, some are formed either through the formal education process or informal channels. As Bada and Olusegun (2015) mentioned, a person who already knows tends to apply what they already know. This knowledge is about entrepreneurship so they want to elaborate their understanding by going into the business world.

In addition to entrepreneurial intention, peer groups also impacted students' economic literacy. This is not a surprising finding because peer groups are being the same degree as parents in terms of interaction, including their willingness to study hard in understanding complex economic issues and its application. As mentioned previously, peer groups being a reference for students' activities, covering mastering economic and financial issues (Isomidinova et al., 2017; Hanson and Olson, 2018). The study's finding corroborates Van Hoorn et al. (2016) that association with peers affects a person's behavior change in fulfilling their needs. Rehm (2014) also reinforced that for teenagers, how their peers see them is the most important aspect of their life. Also, Lolokote et al. (2017) suggested that peers have more influence in choosing their way and lifestyle. In addition, Wulandari and Narmaditya (2018) confirmed that students who learn a lot about managing finances from their parents have higher financial knowledge instead passive learners.

The next hypothesis of this study examined the correlation between economic literacy and entrepreneurial intention. This work showed that economic literacy successfully drives students to be entrepreneurs. Economic literacy contributes to students mastering economic issues and their problem solutions (Narmaditya, 2013). Economic literacy covers the individual ability to understand economic terms and decision-making to face trade-offs covering the opportunity to be a worker or entrepreneur (Nizam et al., 2020). This finding corroborates the prior study by Chuzhmarova et al. (2019) that economic literacy and entrepreneurship education partially affect entrepreneurial interest in students majoring in economic education. This result suggested that a high level of students' economic literacy can change students’ mindset to think more critically, especially in decisions to start and develop new business (Saptono, 2018). This result followed Salemi (2005) explanation that economic literacy benefits are the understanding and application of basic economic concepts in real situations instead of economic theory. This study also confirmed the antecedent work by Nurjanah et al. (2018), who remarked that economic literacy is a life skill that can be applied in daily economic activity.

The two last findings of this study confirmed a pivotal role of economic literacy in mediating the relationship between family economic education and entrepreneurial intention, as well as the relationship between peer group and entrepreneurial intention. These findings support the preliminary study by Wulandari and Narmaditya (2018), which remarked that family is the first and primary knowledge for individuals to further mastering various subjects, including economics that is proxied in economic literacy. As the majority of respondents’ parents of being entrepreneurs, it is a fundamental rationale to support this finding. Supporting a prior study by Smith et al. (2020) that individuals tend to imitate what they see, hear, and know from the closest environment as the reference. In addition to family supports, the peer group is also being a reference for students. This is supported by Patuelli et al. (2020) that peer group is a reference that has a significant influence on the individual activity and intention. Similarly, Peng et al. (2017) stated that friends who interact for a long time will influence one another and their decisions in economic matters.

Conclusion

This study investigated the connectivity between family economic education, peer group, and entrepreneurial intention as well as understanding the mediating role of economic literacy. The findings confirmed that family economic education and peer groups have successfully performed students' economic literacy and entrepreneurial intention. The findings of this research have some important implications for college and policymakers to aware of economic literacy to nurture students' intention on entrepreneurship. With the evidence of family economic education promoting students' economic literacy and entrepreneurial intentions, it is necessary for parents to campaign about entrepreneurship for their children as a promising career choice instead of becoming employees with a fixed salary. Additionally, the universities need to work together with families to foster education, both economic and entrepreneurship in the family environment. This study raises the essential role of peer-group factors for developing student intentions. It is therefore immensely important for the campus to provide the students’ activity units that focus on various entrepreneurial activities and business involvements.

However, there were some limitations in this study. First, this research was limited by the absence of the selection of variables such as variables that refer to the individual's personality predicting entrepreneurial intentions. In this study, we have solely selected the variables studied with a high degree of relevance, especially in our study's context. Second, this study did not adopt the whole theory planned behavior. Therefore, future studies are suggested to elaborate more comprehensively on planned behavior to understand more detail about the study. Future scholars are also suggested to attempt the mixed method with stratified random sampling to be generalizable and represent the real facts in the field. Also, it needs to involve more respondents and use personal and contextual variables to be involved in the research when graduating that already becoming entrepreneurs.

Declarations

Author contribution statement

Suratno, Agus Wibowo: Conceived and designed the experiments; Performed the experiments; Analyzed and interpreted the data; Contributed reagents, materials, analysis tools or data; Wrote the paper.

Bagus Shandy Narmaditya: Analyzed and interpreted the data; Contributed reagents, materials, analysis tools or data; Wrote the paper.

Funding statement

This work was supported by Universitas Jambi (Scheme of PNBP).

Data availability statement

Data included in article.

Declaration of interests statement

The authors declare no conflict of interest.

Additional information

No additional information is available for this paper.