Entrepreneurship is increasingly recognised as a catalyst for socio-economic transformation in emerging economies. Yet, in Pakistan—particularly within the Khyber Pakhtunkhwa (KP) region—youth unemployment remains persistently high despite the expansion of higher education institutions and entrepreneurship-focused initiatives. Against this backdrop, the present study investigates how exogenous environmental factors, namely Capital Availability (CA), Government Policies (GP), Economic Environment (Eco), Regulatory Environment (RE), Workforce Availability (WA) and Structural Support (SS) influence the Entrepreneurial Intentions (EIs) of students. Employing a cross-sectional survey of 386 graduate business students, the research integrates the Luthje and Franke Model with Institutional Theory and applies Structural Equation Modelling (SEM) for data analysis. The results demonstrated significant positive relationships between EIs and CA (β=0.362), Eco (β=0.241), WA (β=0.209), SS (β=0.185) and RE (β=0.174), collectively accounting for 67.3% of the variance in entrepreneurial intentions. However, Government Policies (GP) exhibited no statistically significant effect (p >0.05). These findings underscore the critical role of resource accessibility and robust institutional frameworks in fostering entrepreneurship within volatile economies, offering empirical clarity where previous studies have shown inconsistent results. The study contributes to both theory and practice by highlighting the need for policymakers to prioritise financial and infrastructural development, while educators strength institutional mechanisms that nurture entrepreneurial mindset and develop entrepreneurial capacity among the youth.

Entrepreneurial Intentions, University Environment, Capital and Workforce Availability, Economic and Regulatory Environment, Government Policies, Structural Equation Modelling