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Entrepreneurship and Growth: Evidence from China

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  • Hongbin Li
  • Zheyu Yang
  • Xianguo Yao
  • Junsen Zhang

Abstract

This paper examines the impact of entrepreneurship on economic growth by using a panel data set of 29 provinces in China over 20 years. Two indicators of entrepreneurship are defined and introduced into the traditional growth regression framework that is estimated using the system generalized method of moments. We also use the ratio of staff and workers of state-owned enterprises and per capita sown land area as the instrumental variables to identify the causal effect of entrepreneurship on economic growth. Our results suggest that entrepreneurship has a significant positive effect on economic growth and this finding is robust even after we control for other demographic and institutional variables. Our study provides some evidence that may be used as a basis for evaluating the effect of China’s policy on private business which has been increasingly relaxed since the late 1970s.

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Bibliographic Info

Paper provided by Chinese University of Hong Kong, Department of Economics in its series Discussion Papers with number 00022.

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Date of creation: Oct 2009
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Handle: RePEc:chk:cuhkdc:00022

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Cited by:
  1. Corrado Giulietti & Guangjie Ning & Klaus F. Zimmermann, 2012. "Self-employment of rural-to-urban migrants in China," International Journal of Manpower, Emerald Group Publishing, vol. 33(1), pages 96-117, June.
  2. Shang-Jin Wei & Xiaobo Zhang & Yin Liu, 2012. "Status Competition and Housing Prices," NBER Working Papers 18000, National Bureau of Economic Research, Inc.
  3. Shang-Jin Wei & Xiaobo Zhang, 2011. "Sex Ratios, Entrepreneurship, and Economic Growth in the People’s Republic of China," NBER Working Papers 16800, National Bureau of Economic Research, Inc.

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