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The value of higher education to entrepreneurial performance: Evidence from higher education expansion in China

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  • Feng, Yanxiang
  • Tan, Xinyang
  • Wang, Ruixin

Abstract

Using the Enterprise Survey for Innovation and Entrepreneurship in China (ESIEC) 2018 database, we estimate the effect of the higher education of entrepreneur on firm performance. The expansion of higher education in China that began in 1999 is considered as an exogenous shock to identify causal effects. We find (1) that college education of entrepreneur significantly increases the total factor productivity of firms; (2) that college education of entrepreneur significantly increases the probability of innovation; and (3) that college education of entrepreneur significantly increases the likelihood that firms will gain policy supports from governments. The estimation results suggest that the increasing human capital of entrepreneurs is an important driving force for productivity growth in China. The study has policy implications for both higher education expansion and entrepreneurship.

Suggested Citation

  • Feng, Yanxiang & Tan, Xinyang & Wang, Ruixin, 2022. "The value of higher education to entrepreneurial performance: Evidence from higher education expansion in China," China Economic Review, Elsevier, vol. 73(C).
    • Handle: RePEc:eee:chieco:v:73:y:2022:i:c:s1043951x22000475
    DOI: 10.1016/j.chieco.2022.101789
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    More about this item

    Keywords

    Higher education; Entrepreneurship; Productivity;
    All these keywords.

    JEL classification:

    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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