Liquidity Constrains and Farmer’s Entrepreneurship: An Empirical Analysis From Dynamic Perspective
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| Title | Liquidity Constrains and Farmer’s Entrepreneurship: An Empirical Analysis From Dynamic Perspective
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| Author | Ge Qing’en Zhu Xi Shi Qinghua |
| Organization | Antai College of Economics & Management, Shanghai Jiao Tong University |
| Email | agai_hitsz@sjtu.edu.cn,zhuxi97@sjtu.edu.cn,shq@sjtu.edu.cn |
| Key Words | Entrepreneurship; Dynamic Model; Liquidity Constrains; Sample Selection |
| Abstract | Entrepreneurship is an important way to improve households’ income and liquidity constraints always hamper their entrepreneur. A large literature studies the relationship between wealth and entry to entrepreneurship to inform this question. It can be agreed by traditional theory that the more assets, the higher probability of decision to entrepreneur. However, the data in empirical study is “sample selection” and individual’s occupation choice is the result of their choice. If one person who owns a lot of wealth and choose to worker, we can expect he has low ability. This paper shows that in a dynamic model, the existence of financial constraints to the creation of businesses implies a non-monotonic relationship between wealth and entry into entrepreneurship: the probability of becoming an entrepreneur as a function of wealth is increasing when asset falls in 0~98.70 percent(0268.4 thousands yuan) because of the existing of sample selection. The conclusion is robust even considering the endogenous of wealth. |
| Serial Number | WP224 |
| Time | 2012-02-17 |
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