Working Paper: CEPR ID: DP5706
Authors: Simeon Djankov; Yingyi Qian; Grard Roland; Ekaterina Zhuravskaya
Abstract: Social scientists studying the determinants of entrepreneurship have emphasized three distinct perspectives: the role of institutions, the role of social networks and the role of personal characteristics. We conduct a survey from five large developing and transition economies to better understand entrepreneurship in view of these three perspectives. Using data from a pilot study with over 2,000 interviews in 7 cities across China, we find that controlling for institutional environment entrepreneurs in China are much more likely to have family members who are entrepreneurs as well as childhood friends who became entrepreneurs, suggesting that social environment plays an important role in entrepreneurship. Entrepreneurs also differ strongly from non-entrepreneurs in their attitudes toward risks and their work-leisure preferences, echoing Schumpeter. Finally, failed entrepreneurs score the worst on aptitude tests, but have the best self-reported performance in school and perceive the business environment as least favourable.
Keywords: China; Entrepreneurs; Entrepreneurship
JEL Codes: M13; P50; L22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| social networks (family and friends who are entrepreneurs) (O35) | likelihood of becoming an entrepreneur (L26) |
| entrepreneurs in China have family members and childhood friends who are entrepreneurs (M13) | strong influence of social networks on entrepreneurship (D85) |
| risk tolerance (G11) | entrepreneurial behavior (L26) |
| failed entrepreneurs' aptitude test scores (M13) | perceived success and actual ability (D29) |