Social Capital and Entrepreneurial Intentions Among Rural University Students: The Mediating Role of Psychological Capital

Entrepreneurial intention (EI) in rural settings is shaped not only by physical and human capital but also by the social and psychological resources that enable agency. Focusing on university students from Gilgit-Baltistan, Pakistan, this study examines the relationship between social capital (SC) and EI, and whether psychological capital (PsyCap) serves as a conversion mechanism between the two. We surveyed 250 GB-origin students enrolled across Pakistani universities using a stratified convenience sampling approach. We analysed the data with structural equation modelling in AMOS, complemented by SPSS descriptive statistics, confirmatory factor analysis, and common-method variance (CMV) diagnostics. The validated measurement model demonstrated a good fit (CFI = 0.957, TLI = 0.951, RMSEA = 0.046), strong reliability and convergent validity, and satisfactory discriminant validity. In the structural model, SC had a sizable positive association with PsyCap (β = 0.62, P < 0.001), and PsyCap, in turn, was positively related to EI (β = 0.20, P < 0.001). The direct path from SC to EI remained significant (β = 0.13, P = 0.015). Bias-corrected bootstrapping (5,000 resamples) indicated a significant indirect effect (β_ind = 0.20, 95% CI [0.12, 0.29]), consistent with partial mediation; approximately 60% of the total association flowed through PsyCap. Common-method checks (Harman’s single factor = 36.8%; ULMC ΔCFI = 0.004) suggest minimal inflation from same-source reporting. Substantively, the results clarify how networks and ties bolster self-efficacy, hope, resilience, and optimism, which in turn elevate start-up intentions. Notably, women comprised 43.6% of the sample, underscoring the need for gender-responsive interventions. The study provides rural-university evidence from a rarely examined region. It offers actionable guidance for universities and policymakers to pair network building with targeted PsyCap development to activate entrepreneurial capacity.