How Does Government Policy Increase Entrepreneurial Intentions?

The role of government policy (GP) on public sector entrepreneurship as a prominent predictor of increasing the number of entrepreneurs has attracted a number of scholars in developed and developing countries. GP really determines the growth and development of entrepreneurship, with more entrepreneurs taking part in entrepreneurship. The goal of this research is to reveal the effect of GP and Islamic spiritualism (IS) on entrepreneurial intentions, with the role of entrepreneurship education (EE) in Islamic boarding schools as a mediating variable. A total of 227 small and medium enterprises (SMEs) of Islamic boarding schools based in West Java, Central Java, and East Java were involved in this research. The conceptual research model was empirically examined through Structural Equation Modeling using the Partial Least Squares (PLS-SEM) approach. The results of our study indicate that GP and IS have a direct influence on the business intentions of Islamic boarding school-based SMEs entrepreneurs, as well as indirectly through EE in Islamic boarding schools. Our study also offers theoretical and practical insight into how public sector entrepreneurship policies can trigger an increase in the number of SMEs in Islamic boarding school circles.