An Exploration of Undergraduates’ Propensity for Online Businesses

Abstract

An online business primarily operates online, using digital platforms to provide products, services, or information to a global audience at a lower cost than traditional businesses. In Sri Lanka, technological developments have made it easier for young people to start online businesses, with a growing trend among university students. While the drivers of traditional entrepreneurs have been well-documented, the factors influencing undergraduates to start an online business in Sri Lanka remain unexplored. The main objective is to identify the factors that affect undergraduates’ propensity to engage in online business. A stratified sampling was used to select a sample of 261 participants. Data were collected using a well-structured questionnaire, distributed both online and in person. Binary Logistic Regression and Exploratory Factor Analysis were employed to examine undergraduates’ propensity toward online businesses. Among 261 respondents, 92 were engaged in online businesses, and Gender, Faculty, Monthly income, and Awareness were identified as factors affecting undergraduates’ engagement in online businesses. Gender showed that female students were more likely to engage in online business compared to males, and they were 50% less likely to participate. Students from the Faculty of Management Studies and Commerce were 2.15 times more likely to engage in online business than students from the Faculty of Humanities and Social Sciences. Faculty of Applied Sciences was 3.76 times more likely to engage in online business than students from the Faculty of Humanities and Social Sciences. Households with incomes above 100,000 have a 0.37 times higher probability of participating than those with incomes below 50,000. This means that students with higher monthly household incomes are more likely to participate in online business than those with lower household incomes. Financial aid is not significant, and it shows that students can manage the finances of their online businesses without university financial aid. There is no significant impact of GPA on online business engagement, indicating that students have managed their academic work alongside their online business activities. Lack of time is the reason why some undergraduates do not engage in online business. They have a moderate attitude towards online business, and most are willing to start one.