Does targeted poverty alleviation foster rural entrepreneurship? evidence from china’s township-level panel data

Rapid urbanization often exacerbates rural poverty by fostering a singular and low-quality industrial structure, limiting farmers’ capabilities and economic opportunities. China’s targeted poverty alleviation (TPA), the world’s largest poverty alleviation program, addresses this challenge by enhancing rural entrepreneurship through precise resource allocation. Unlike prior studies focusing on macroeconomic effects or household income, this study examines TPA’s impact on microeconomic vitality by using a difference-in-difference model and panel data covering 32,513 townships (2010–2019). The findings reveal that TPA increases rural entrepreneurship by 12.26 % (contributes to approximately 21 % of the annually practical growth rate 58 %). Enhancing human capital and expanding credit access are main mechanisms. This effect is particularly stronger in central and western rural regions and in townships with larger markets, higher human capital or better road infrastructure. These findings highlight the efficacy of targeted interventions in fostering sustainable rural development, offering insights into designing microeconomic strategies for global poverty alleviation.