Migrant entrepreneurship in China: entrepreneurial transition and firm performance

Abstract

China is experiencing rapid urbanization during which millions of migrants move from rural to urban areas. Recently, China initiated the national strategy of "mass entrepreneurship and innovation" to tap into the innovative potential and promote entrepreneurial development among the general public, with rural migrants being one of the targeted groups of this policy. This context calls for a better understanding of rural migrants' entrepreneurial formation and transition. Using the 2012 and 2014 Chinese Labor-force Dynamics Survey (CLDS) data, we test the importance of human capital, social capital, and community trust on migrants' entrepreneurial entry with cross-sectional and panel data analyses. We find that rural migrants' entrepreneurship rates and entrepreneurial entry rates surpass both their urban resident and rural resident counterparts, indicating the active role they play in urban business landscape. While individual characteristics and social networks play similar roles in these three groups' entrepreneurial transition, rural migrants' business activities are particularly shaped by their perception of communities. Further analysis of migrant-owned businesses reveals their over-representation in main-street industries but their firm performances are on par with other businesses, suggesting their positive economic contribution in cities.

Review and Prospect of Research on Floating Population Entrepreneurship in Strange Land in China

“…Existing studies have explored the entrepreneurial success of floating population through the indicator of whether there is a fixed business place , and found that local social network embeddedness is an effective way to overcome entrepreneurial difficulties and achieve entrepreneurial success. The exit rate of enterprises of floating population is even significantly lower than that of local enterprises (Liu et al, 2019).…”

“…There are three main ways to measure the rural floating population: First, people with agricultural household registration who live in cities or work in cities (Liu et al, 2019;Zhang & Liu, 2014). Second, that is floating population with agricultural household registration and engaged in non-agricultural work (Jing et al, 2018).…”

“…Research on demographic characteristics generally considers that male, married, and floating populations with agricultural household registration are more likely to choose a strange land to start a business, and there is an inverted U-shaped relationship between age and entrepreneurship (Liu et al, 2019;Zhu, 2017). But some scholars find some different conclusions.…”

“…Non-cognitive competence refers to a relatively stable way of thinking, feeling and behavior, which reflects the specific response of an individual under certain circumstances. Zhu (2019) and senior high school education level is more inclined to choose entrepreneurship, and the education level of undergraduate and above reduces the entrepreneurial tendency (Jing et al, 2018;Liu et al, 2019). When the floating population has a low level of education or lack of work experience, it does not have the basic skills and learning capabilities for entrepreneurship, and it is difficult to carry out entrepreneurial activities.…”

“…Early studies on floating population mainly focused on the social security, social integration and social crime, and paid less attention to the positive social behavior of floating population. In recent years, some studies have found that urban entrepreneurship is the effective way for floating population to make their living and improve economic and social status, and the entrepreneurial intention and entrepreneurial rate of floating population is even higher than that of local residents (Liu & Huang, 2016;Liu et al, 2019;Zhang & Zhang, 2017). The entrepreneurial behavior of floating population in strange land has attracted continuous attention.…”