Effects of Students’ Demographics on Entrepreneurial Intentions: A Comparison of Two Diverse Business Schools

Abstract

The study measures demographics effects of students on their Entrepreneurial Intention (EI) in two universities, each in the United States of America and Pakistan. An empirical investigation to understand demographics effect on entrepreneurial intention to become potential entrepreneurs is of interest to theorists of planned behavior. Survey method was used to collect the data from business students of Gatton College of Business and Economics, University of Kentucky-USA and Kohat University of Science and Technology (KUST), Kohat, Pakistan. The instrument used in study was questionnaire consisted of demographics and entrepreneurial intention measurement. T-test and ANOVA were applied to analyze mean difference between the groups. The results elicit mean difference between the groups on basis of demographics about their entrepreneurial intention.

Keyword: Demographics; Business Students; Entrepreneurial Intention

Introduction

Awareness and research in entrepreneurship and entrepreneurial education have been growing over the last many years (Hatten and Ruhland, 1995; Klapper, 2004; Mumtaz, Munirah, and Halimahton, 2012) due to its significance to uplift economic development. It is proving to be a way forward to dealing with unemployment issues, a potential catalyst and incubator for technological advancement, product market innovation and social modification. Since, the issue of graduate unemployment has become a major global problem. Students graduating in every part of the world are mostly dependent on the public and private sectors for employment.

In academic world, so far, many studies have examined the entrepreneurial intent, some of which consider business education as a foundation for potential entrepreneurs, their state of mind combined with education are probably going to shape their intent to initiate their own business (Wang andWong, 2004). Based upon this justification, the major concern of this study is to examine the demographics, which decide entrepreneurial intention of the business students. This portrays clear picture with specific goal to develop entrepreneurship at the national level so that our future generation, in general, and new graduates become ready to move to a new level by getting business vision or to become successful entrepreneurs.

This study was primarily designed to examine whether existing business students of selected business school in Pakistan show certain level of Entrepreneurial Intentions (EI). In other words, are they inclined towards entrepreneurship as their possible future design? And importantly how these intentions vary through various demographic differences? Before execution of the study, the researchers visited University of Kentucky, USA for research-based training in business curriculum development funded by State Department and U.S Embassy in Pakistan. The visit made it possible to test the proposed scheme of analysis on business students of Gatton College as well. Such valuable exposure enabled the researchers to see various emerging entrepreneurial intent patterns with broader vision and enriched observations.

Literature Review

Contemporary rigor of research in entrepreneurship, generated globally can be attributed to many factors. To start with, for advanced countries, entrepreneurial movement (new business creation) is a way for stimulating economy and help to diminish unemployment rate. Further, it is considered as a potential catalyst and incubator for technological progress, product and market innovation. Likewise, its role for developing economies is considered as an engine of economic progress, job creation, and social adjustment. Therefore, business growth or new business creation is widely encouraged and stimulated by the economies in order to speed up economic growth and wealth creation.

Entrepreneurial Intention

Entrepreneurial Intention (EI) embeds a personal propensity of an individual to go for self-employment as a career choice and is depicted in some career decisions models as an enterprising behavior. Number of studies indicated entrepreneurial intention as a future design of owning a business entity (Wu, Wu, 2012). EI, as an indication of an individual to start a new and innovative venture has largely been shown by Ajzen’s (1991) theory of planned behavior, Shapero and Sokol’s (1982) model of the entrepreneurial event and Bandura’s (1977) model of social learning. The key emphasis in these arguments remains on clarity of mind, expression of behavioral tendency and tertiary level education backgrounds.

Several authors who worked on EI made a prudent use of theory of planned behavior as a rudimentary standpoint (Kolvereid and Isaksen 2006; Krueger, 2007). Ajzen’s (1991) model, focused on observable behavior of individual, draws on three interactive factors: the attitude leading to a possible behavior, the subjective norms and perceived behavioral control. The attitude component revolves around individual assessment of a person while the subjective norms assesses the social environment and clues. Perceived behavioral control is the extent to which the desired behavior is likely to be played out. For entrepreneurial intent, numbers of researchers have augmented the theory with one or more additions of dimensions (Tkachev and Kolvereid 1999; Linán 2004; Veciana, Aponte and Urbano, 2005).

Demographics

In literature, family orientation, gender, age, education and previous entrepreneurial experiences have been observed to be identified with entrepreneurial intention (Crant, 1996; Kolvereid and Isaksen 2006; Bae, Qian, Miao and Fiet, 2014). Therefore, this study is related to the university students about their readiness in the entrepreneurial practices.

There are various demographic variables such as age, gender, educational and family backgrounds, motivation, and prior business experiences affecting student’s intentions towards entrepreneurial activities as documented by various researchers (Kristiansen and NurulIndarti, 2004; Shay and Terjensen, 2005; Ozaralli and Rivenburgh, 2016).

Kristiansen and NurulIndarti (2004) in an investigation of entrepreneurial intention among Indonesian and Norwegian students determined that age, sex and educational foundation had no noteworthy effects on entrepreneurial intent. Scholars demonstrated that there was no major contrast amongst male and female students with respect to enthusiasm for entrepreneurship (Shinnar, Pruett and Toney, 2009. Shay and Terjensen (2005) found out that males had higher desires than females to initiate own business.

Studies on the entrepreneurial intention of Malaysian student are from gender point of view discovered mixed outcomes. Ooi (2008) on an investigation of university students in Northern Peninsular Malaysia found that gender along with different variables, for example, programs of study, past working experience, and mother’s occupation had significant effect on students’ inclination towards entrepreneurial activities. Likewise, investigation led by Barcelona and Valida (1992) on 800 business students in Malaysia revealed relationship between demographics and entrepreneurial state of mind.

Another review by MohdNizam, et al., (2009) initiated that female and Chinese indicated higher intention to become entrepreneurs as compared to male and non-Chinese. According to YarHamidi, et al., (2008), entrepreneurship education and earlier entrepreneurial experience have high positive effect on entrepreneurial intentions. Similarly, it has also been reported that entrepreneurs ‘tend to be the first-born’ (Helfat and Lieberman, 2002).

A review coordinated by Mazzarol, Doss and Thein (1999) on 93 respondents between business people living in Western Australia, established that respondents’ background and the individual character proved to form intent of owning the enterprises. Past review had uncovered that consideration of various factors, for example, ethnicity, identity, human capital, marital status, family influence, involvement, work status and education level, age, sex, religion and socio-economic position contribute in establishing business (Mazzarol et al., 1999).

In another investigation of entrepreneurial spirit between students with and without enterprise experience found that there is higher mean difference. Male students of university demonstrated higher entrepreneurial intentions as compare to female partners (Zaidatol and Afsaneh, 2009). In other words, men are more inclined towards entrepreneurial business than women. Research done on first year students and degree holders build up that entrepreneurial state of mind between the students had considerably created relationship with academics, business-oriented family and gender roles (Crant, 1996).

Mathews and Moser (1996) conducted study on (89) ex-business graduates established that families and gender inclined them towards entrepreneurial attitudes. Various studies like Hatten and Ruhland (1995) on 220 college students in USA sponsored by Small Business Institute, and Louis et al. 1989 at various universities in USA found that age as well as gender could be linked to propensity to become entrepreneur. Another study, directed by Crant (1996) in an institution of higher education in the USA established that educational level, gender and parents having business profession contribute towards entrepreneurial behavior. Since, there are mix results about demographics around the globe, hence this becomes debatable and it needs further research in order to achieve some substantial results with a comparative reflection on two distinct nations.

Hypotheses

Considering above discussion, following hypotheses have been developed for testing.

H1: Students with difference of education level (BBA/MBA) changes their entrepreneurial intentions.

H2: Non-local students show higher entrepreneurial intentions than local ones.

H3: Male students have higher level of entrepreneurial intentions than female students.

H4: Students with different age groups have significantly varying entrepreneurial intentions.

H5: Students with first birth-order have more entrepreneurial intentions than others.

H6: Students whose parents are self-employed possess higher entrepreneurial intentions than job-oriented parents.

H7: Students attended business seminars have greater entrepreneurial intentions than those who have not attended those seminars.

RESEARCH METHODOLOGY Approach and Data Collection

This study provides a unique opportunity to see the phenomena being investigated through multiple lenses. It has essence of a case study approach. As mentioned by Seawright and Gerring (2008 p. 296), case studies are intensive qualitative or quantitative enquiries of a single case or a class consisting of multiple cases to gain a deeper understanding of a phenomena or attributes of larger set of same units i.e. population of cases. In short, the goal is inference from the sample (of one or several) to a larger population. Our physical presence at University of Kentucky discarded need of case selection and posed the available students of Gatton College as priori for investigation. Literature supports the option of having two sets of homogeneous sample units in a case study.

As Barzelay (2007) identifies the first set as instrumental and other as intrinsic. Former provides more enriched premises of propositions while later could be enlightened by insights hence ensued. US in the instant case provide instrumental setting since it had an established incubation centre, start-up counselling, liaison with local chamber and representation of business community at school boards. Testing hypotheses at such illuminating premises returned more informed coordinates of further testing. It helped to better tailor proposed testing at intrinsic case of business school in Pakistan.

At the same time, it makes a sense of comparative research. In normative perspective, comparisons in social research may be cross national (see https://en.wikipedia.org/wiki/comparative_research). It helps to understand if shared phenomena are being explained by same causes. It is believed that comparisons provide analytical frameworks to confirm differences under cultural influences and specificities. Hantrais (2008) reported ‘contextualization’ of survey instruments as means of understanding structures and institutions of societies under the study. Same author attributed this trend to two underlying objectives. First, to enhance collaborations both interdisciplinary and international, in creating augmented meanings of social constructs. Secondly to facilitate transferability of assessment tools of shared problems and policy inputs among segments being compared.

Survey approach explains the attitudes and behaviors of people and entering their responses to set of inquires (Babbie, 1993:256). Hence, to measure the entrepreneurial intention survey is used to collect data through questionnaire from business students registered with Gatton Business School, UK-USA and KUST, Pakistan.

Development of Research Instrument

Questionnaire consists of two parts: demographics about gender, age groups, domicile, birth order, and education level (graduate and under graduate), family occupation (self-employed vs. job oriented), and entrepreneurship related seminars and workshops’ participation. The instrument is developed keeping in view research hypotheses. Almost all of questions are measured on nominal scale except question regarding age group, measured on ordinal scale.

Second part comprises of entrepreneurial intentions measurement adopted from Linán and Chen (2009) on interval scale. Students were asked to demonstrate their degree from assenting or conflict with every proclamation on a 5-point Likert scale from strongly disagree (1) to strongly agree (5). It also helped to make the comparison more meaningful and convenient though widely used intervals.

Population of the Study

The following Table 3.3.1 shows the number of total final semester graduate and undergraduate level business students of both the universities. Due to the small number of respondents the entire population is taken as sample (Gay, 1992).

Table 3.3.1 Population BBA MBA TOTAL Gatton Business School, UK-USA 70 72 142 KUST, KP-Pakistan 120 46 166

Statistical Methods

As indicated by the nature of this work, different tools are utilized by the researchers for investigation purpose. To measure the means difference T-test, and ANOVA are applied. “Cronbach’s Alpha” is computed for reliability through SPSS.

ANALYSIS and RESULTS Reliability

A Cronbach’s Alpha is calculated to check the reliability. According to Sekaran (1999:311) ‘Cronbach’s alpha is a reliability coefficient that shows how well the items in a construct are related to each other. Closer the Cronbach’s alpha to 1, higher the internal consistency reliability.’ Randomly selected questionnaires in each case were used to calculate reliability of EI construct. Alpha scores were 0.902 and 0.836 for university of Kentucky and Kohat University respectively.

Hypotheses Testing

Seven hypotheses were developed and tested by employing t-test and ANOVA. Results are significant if P-value is equivalent to or under 0.05 levels of significance.

Table 4.1(A) Entrepreneurial Intention Results of t-test Gatton Business School, Kentucky Target Degree of t-value p- Population Freedom value BBA/MBA 133 131 0.529 0.598 Domicile 133 131 0.068 0.946 Local (KP)/Non-Local Others Gender 133 131 2.615 0.010 Male/Female Birth order 133 131 2.067 0.041 First Born/others Family own Business 133 131 1.088 0.279 Yes/No Workshops or seminar Attended 133 131 3.458 0.001 Yes/No

Table 4.1(B) Entrepreneurial Intention Results of t-test Kohat University (KUST), Pakistan Target Degree of t-value p- Population Freedom value Program 152 150 3.367 0.001 BBA/MBA Domicile 152 150 0.834 0.406 Local (KP)/Non-Local Others Gender 152 150 0.658 0.512 Male/Female Birth order 152 150 0.091 0.928 First Born/others Family own Business 152 150 0.905 0.367 Yes/No Workshops / Seminar Attended 152 150 3.805 0.000 Yes/No

H1: Students with difference of education level (BBA/MBA) changes their entrepreneurial intentions.

Hypothesis H1 used independent sample T-test because there are two groups and entrepreneurial intention is measured on 5-point Likert scale. The results of T-tests are shown in Table 4.1(A) and 4.1(B) and its interpretation is given below:

From result in Table 4.1(A), means difference is 3.285 and 3.365 with standard deviation of 0.886 and 0.839 for the undergraduate and MBA students of Gatton, Kentucky-USA about their entrepreneurial intention is not meaningful as p>0.05 at 131 df. Hence H1 is rejected. While H1 is accepted for students of KUST, KP-Pakistan as given in Table 4.1(B) i.e. P<0.05 at 150 degree of freedom (df) means that there is a significant difference about entrepreneurial intentions with respect to BBA and MBA graduates. Although number of students in each program of comparing cases are different but it doesn’t make difference as only means are taken for statistical measurements and inferences.

H2: Non-local students have higher entrepreneurial intentions than local one.

As reported in previous discussion, various studies have considered residential status, country of origin effect, emigrant status and citizenship as varying versions to know if the respondent hail from the place of study. In our case local means students hailing from province of Khyber Pakhtunkhwa (in KUST) and Kentucky State (in UoK). Consequently, non-locals are those who are from outside KP and Kentucky respectively. Hypothesis (H2) applied by utilizing T-test and its result is displayed in Table 4.1(A) and 4.1(B). In both cases as in Table 4.1(A) and Table 4.1(B), H2 is rejected as P>0.05 which explains that there is no meaningful distinction between local and non-local students about their entrepreneurial intentions.

H3: Male students have more level of entrepreneurial intention than female students.

From results in Table 4.1(A), H3 is accepted as P<0.05 which determined that there is meaningful differentiation among male and female students regarding their perception about entrepreneurial intentions. While in Table 4.1(B) H3 is rejected as P>0.05 which determines that there is no statistical difference among students with respect to their gender about entrepreneurial intentions. Hence, H3 has mixed results.

H4: Students with different age groups have significantly varying entrepreneurial intentions.

ANOVA

Table 4.2(A) Entrepreneurial Intention-Gatton Business School, Kentucky Sum of Squares Df Mean Square F Sig. Between Groups .018 2 .009 .012 .988 Within Groups 98.136 130 .755 Total 98.153 132

ANOVA

Table 4.2(B) Entrepreneurial Intention-Kohat University, Pakistan Sum of Squares Df Mean Square F Sig. Between 9.068 2 4.534 11.306 .000 Groups Within Groups 59.755 149 .401 Total 68.823 151

Likewise, Hypothesis (H4) is tested by using ANOVA. Its results are shown in Table 4.2 (A) and (B) and interpretation is given below:

Degrees of freedom (df) between groups variance, df= (K-1) i.e. 3-1 is 2 while within groups df= (N-K) i.e.133-3 is 130 in Table4.2 (A) While in Table 4.2(B) df with in groups is 149. F value is calculated as:

F = MS explained/MS residual

In first case of Gatton (USA) as in Table 4.2(A), F=0.012(0.009/0.755) value is not Significant at P>0.05 and rejected H4 while in second case of Kohat (Pakistan) in Table 4.2(B), F=11.306 (4.534/0.401) is significant at p<0.05. Therefore, accepted H4 means that difference is major among various age clusters about their intention. Hence, H4 have mixed results.

H5: Students with first birth order have more entrepreneurial intentions than others.

Hypothesis (H5) again call for utilization of t-test and reported in Tables 4.1(A) and 4.1(B). H5 is accepted in case of Gatton (USA) as P<0.05 while rejected in case of Kohat (Pakistan) as P>0.05. Therefore, H5 have mixed results.

H6: Students whose parents are self-employed possessed higher entrepreneurial intentions than job-oriented parents.

Hypothesis (H6) outcomes are reported in Table 4.1(A) and 4.1(B). In both cases, H6 is rejected because P>0.05, hence that there is no meaningful variation between group about their perception regarding entrepreneurial intentions.

H7: Students attended business seminars have greater entrepreneurial intentions than those who have not attended these seminars.

Hypothesis (H7) is tested by applying t-test and results displayed in the Tables 4.1(A) and 4.1(B). In both cases H7 is accepted as P<0.05 which means that there is a meaningful variation about entrepreneurial intention between groups with regards to attending workshops/seminar. In other words, students who attended training workshops/seminars possessed higher entrepreneurial intention than others. It can be safely concluded that training workshops/seminars plays an important role to promote entrepreneurial intention among business students.

Findings and Conclusions

Since the data is collected from two universities of USA and Pakistan, it establishes new levels of understanding about various components that affect self-employment intentions among business students. Following text articulates findings as juxtaposed with each hypothesized relationship. Each para embeds both finding and conclusion pertaining to respective proposition.

Apart from other factors, there are demographics that influence individual entrepreneurial intentions. Among these demographics, gender, age, domicile, education level, birth order, family occupation, business related training workshops etc. are mostly documented in literature as stated above. Students with different education level i.e. BBA and MBA change their entrepreneurial intention, addressed in hypothesis is H1 that has mixed results. This means that H1 is accepted for Kohat University Students (KUST), Pakistan which states that MBA’s students are more mature, more knowledge and more inclined towards entrepreneurial activities. But H1 is rejected in Gatton Business Students in USA means that there is no significant difference between BBA and MBA graduates regarding entrepreneurial intentions. Hence, study has mixed results.

Similarly, students living-in other than home towns have greater entrepreneurial intentions, hypothesized as H2 and rejected in both cases. In Kohat University, Pakistan proportion of non-local students was much low as compared to Gatton Business School, USA because in the city of Kohat mostly students hail from Khyber Pakhtunkhwa Province and very limited number of students come from other places, while in Gatton it is high as students come from other states and countries as well. This study rejected the previous studies as mentioned in literature that non-local are prominent in business activities rather the results of this study depicts that locals are also entering in entrepreneurial activities.

Likewise, gender is proposed to have different level of entrepreneurial intentions (hypothesis H3). This also has mixed results as H3 is accepted for Gatton students and supported previous studies. Results did not match in KUST, which can be attributed to the changing trend in Kohat. Here, female students are given equal educational opportunity about establishment of business thus enhancing their motivation towards entrepreneurial interventions. Although in general, Pakistani society is male dominated as they are perceived to be responsible for bread and butter; never-the-less with the support of awareness programs, role models and successful stories, workshops, and seminars this trend can be changed. Further, the result of this study cannot be generalized because the portion of female students is very low in business education.

In the same way students with different age groups have different entrepreneurial intentions as referred in hypothesis H4. It is accepted for business students of Gatton, USA but rejected for business students of KUST, Pakistan. In Gatton School, USA, all students regardless of their age are involved in entrepreneurial activities but in Kohat University mostly young students have more entrepreneurial intentions as compared to older ones.

Hypothesis 5 proposes that students with different birth-order have more entrepreneurial intention than others. H5 is again accepted for business students of Gatton, USA and supported the previous studies, which described that elder son/daughter takes the responsibility of his/her parents and have more entrepreneurial intentions. Moreover, elder child personality is impressed by his/her parents more than others. But H5 is rejected for business students of Kohat University, Pakistan. Generally, in Pakistani society all children are involved in business activities as compared to elder one because of poverty and unemployment.

In addition, students having self-employed parents have greater entrepreneurial intention than rest. It pertains to what H6 suggests and is rejected in both cases. It means that there is no significant difference in family own business and job-oriented family with respect to students’ entrepreneurial intentions. This further elaborates that job-oriented families are also motivating their children to become successful entrepreneurs i.e. to have more entrepreneurial intentions. Hence, society has more tendencies towards business activities. In some cases, recorded in KUST, Pakistan students’ parents are taking early retirement benefits e.g. golden hand-shake, and motivating children to become self-employed.

Similarly, students attended business seminars have higher entrepreneurial intention than others who have not attended business seminar. The corresponding hypothesis H7 is accepted in both cases. It means that there is significant difference among students who attend seminars and others with respect to their entrepreneurial intentions perception. Further, this supported that training workshops/seminars play significant role to flourish entrepreneurial intentions among business students of Gatton, USA as well as Kohat University, Pakistan.

Finally, a holistic view of the findings affirms the theory of planned behavior of (Ajzen, 1991). It leads to the conclusion that certain clues in existing behaviors as well as nature/nurture factors do predict future intentions. The work also discussed aspects of social learning theory (1971) by taking into account the tacit aspects of school’s entrepreneurial training. Propensity factor ensuing mainly from those having entrepreneurial experiences in family also plays a role in forming learners’ behavior.

Recommendations

Based on results of study at hand, following can precisely be recommended with regards to both academic and practical perspectives.

1. The courses and curriculum being imparted currently in business schools may focus on harnessing business creation skills. Learning through training perspective rather than reading and cramming is recommended. Ultimately the academicians and policy makers can inculcate entrepreneurship as one of key deliverable and desired cross-sectional skill.

2. The cultural dimension of segregated gender roles poses potential problem for female prospects of entrepreneurship in our society. To address success stories of prominent women entrepreneurs could play a motivational role. Civil societies and non-government sector may be invited and may be inducted at boards of business schools as important stakeholders.

3. Startup exhibitions are another tool to make business students envisage their projects confidently. In developed world, potential entrepreneurs usually start working on their startup designs in mid of degree programs. This is made possible through active involvement of entrepreneurial alumni and local startups and helps capitalize on locational economies of scale for schools.

4. Faculty needs to be trained in idea generation exercises. The target critical thinking, market niche and proposal writing skills may first be instilled in faculty who in turn can form effective workgroups of potential interested students. Collaboration with institutions of other provinces can be useful in bringing-in synergy and for more objective academic assessment of proposed projects. Collaborative workshops can be conducted and permanent workgroups, connected through social media can be formed among various institutions. There are already established consortiums at national level among universities for research and innovation, which can also be helpful for commercialization of ideas and laying foundation of startups.

5. Industrial linkages can bring financial resources closer to prospective students. By awarding most promising projects, judged by industrial experts can help in spotting convenient channels of seed money.

6. Media, both print and electronic can be used for community outreach and industrial linkage. Policy makers and chambers of commerce and industry can offer their valuable input and detailed outlook of national economic priorities.

7. Tertiary level institutions operating with the already established career-counseling centers and placement services can augment their portfolio by incorporating entrepreneurial acumen of business faculty and students. In Khyber Pakhtunkhwa, province of Pakistan, there are mostly family businesses, and start-up capital is supplied by relatives, family and colleagues. In this scenario, the parents can also be considered as stakeholders in students’ educational endeavors. They can thus benefit the institutions with their knowledge and expertise through linkage with career centers.

Policy and Managerial Implications

The study attempts to help those at the helm of affairs of business schools’ management and public regulatory institutions to foster entrepreneurial aspects of business education. As emerged in findings and subsequent interpretation, an environment of ‘total entrepreneurial learning’ needs to be harnessed beyond sheer incubatory arrangements. Current startup support mechanism is largely supported by schools’ own funds. Endowments lack consideration for this phenomenal contribution of modern business learning. Ensuring Government support on one hand, needs long term financial planning and on other, due heed from policy makers.

Limitations and Research Directions

Study at hand is limited by number of factors. Both educational institutions under the study are culturally and structurally different. For some, even comparison of a developed premise with developing one would not be ubiquitous. Contrary to other quantitative enquiries, findings cannot be generalized. Nonetheless, it was a test case and revealed interesting findings. Its further refinement should be left for future endeavors. Another limitation is the contextual factors, which remained largely overlooked. Students’ respondents at university of Kentucky were unmatchable in terms of diversity. Their age groups, professional aspirations and ethnic variations could not be dealt with justice to avoid emergence of outliers. Locally, most of the classes contacted were much homogenous.

Lack of rigor in such cross-sectional studies is boilerplate limitation. Talking in terms of quantitative analysis, tests applied to data were rudimentary. Further statistical treatments and sophistication may yield interesting and even dichotomous outcomes.

Following are some essential points for future research

Upcoming studies can work on diverse samples and ought to include other territories of both nations to make it more generalized. Similarly, longitudinal reviews may be designed to analyze the response consistency and its modification over the period. Moreover, they can include moderating variables such as university role, family and institutional support and its impact on entrepreneurial intentions among students.

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