Through trials and hardships: Internal migration and locus of control among Chinese entrepreneurs

Socio-emotional skills are essential for entrepreneurial behavior and firm performance, yet little is known about how entrepreneurial traits are associated with major life events such as migration. This study investigates the relationship between internal migration experience (IME) and the locus of control (LOC) among entrepreneurs, a psychological trait with significant implications for various life and organizational outcomes. We first develop a theoretical framework to explore how migration may relate to entrepreneurs' LOC. Using nationally representative datasets from China, we compare entrepreneurs with IME who returned to their hometowns with those who have never migrated. The results show robust evidence that returnees exhibit stronger internal LOC than non-migrants, partially explaining the positive link between migration and entrepreneurial behaviors. This observed relationship is more pronounced among those who migrated earlier in life and appears weaker among individuals with prolonged migration durations. The positive association is also more evident among male entrepreneurs, those born after 1980, members of the ethnic majority, and entrepreneurs from smaller cities. Mechanism analysis further suggests that while IME is linked to health deterioration and weakened origin-based social networks, it is also associated with gains in work experience, managerial skills, cultural assimilation, and socioeconomic improvement, which contribute to strengthening internal control beliefs. Our findings underscore the relevance of internal migration for entrepreneurial behavior, particularly through the lens of socio-emotional skills, and suggest the importance of migration policies for inclusive urban development.