ocial Capital and the Financial Constraints in the Entrepreneurial Decisions: Based on the Credit Market Survey Data from
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| Title | ocial Capital and the Financial Constraints in the Entrepreneurial Decisions: Based on the Credit Market Survey Data from
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| Author | Zhang Haiyang，Hao Chaoyan，Ping Xinqiao and Liang Shuang |
| Organization | University of International Business and Economics; Central University of Finance and Economics; Peking University |
| Email | hyang_zhang@163.com；haochy2011@163.com；xqping@pku.edu.cn；liangshuang18@vip.sina.com |
| Key Words | Financial Constraints; Limited Liability; Moral Hazard |
| Abstract | Based on the rural credit market survey data, we try to find out the reason of credit constraint in rural areas of China. The PTK(2006) occupational choice model with Social Capital and Vuong test are used in this paper. We find that the moral hazard and limited liability are both the reasons for credit constraints. For entrepreneurs still working on farm, the main reason is limited liability, but for those entrepreneurs working on business, the main reason is moral hazard. In order to improve the farmer’s welfare, it is important for the government to reduce the collateral needed in the farmer’s loan.
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| Serial Number | WP261 |
| Time | 2012-06-12 |
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