Cognitive Abilities and Entrepreneurship: Evidence from China
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| Title | Cognitive Abilities and Entrepreneurship: Evidence from China
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| Author | Li Tao, Zhu Junbing and Fu Lin |
| Organization | Central University of Finance and Economics; Free University of Berlin |
| Email | econlitao@gmail.com、fulinthu@126.com；zhujunbing1990@sina.com |
| Key Words | Entrepreneur; Cognitive Abilities; Institutional Environment |
| Abstract | This paper uses Chinese Family Panel Studies (CFPS) in 2010 and 2012 to explore the effect of cognitive abilities on entrepreneurship. Overall, the results show no significant influence of the cognitive abilities on entrepreneurship regardless of different types of entrepreneurship. But we argue that government regulation is an important determinant of individual decisions to expand business and also impacts the effect of the cognitive abilities on entrepreneurship. We find a negative correlation between the cognitive abilities and entrepreneurship in tightly-regulated industries, and a positive correlation in that of loosely-regulated industries. Furthermore, we study the effect of three dimensions of cognitive abilities on entrepreneurship. The effects of character recognition and memory ability on entrepreneurship are different between tightly-regulated industries and loosely-regulated industries, but the results are not robust. While the counting ability shows no significant effect on entrepreneurship regardless of different levels of government regulation. Our results suggest that it is vital for government to reduce unnecessary government regulation for expanding entrepreneurship. |
| Serial Number | WP1059 |
| Time | 2017-02-24 |
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