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From fields to firms: How rice-farming culture influences entrepreneurial entry decisions

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  • Ma, Xinru
  • He, Jingbin

Abstract

This study examines whether rice-farming culture affects household business start-up decisions. We document a positive relationship between historical rice cultivation and households' business start-ups. Using historical rainfall as an instrumental variable, we address endogeneity concerns and find similar results. We also show that the effect operates through two social channels: stronger informal financial support and greater reciprocity, reflected in lending to others and employing relatives. The effect is stronger for households with greater financial capacity and in provinces with better business environments. Additional analysis shows that these households also face lower failure risk and less financial pressure after business entry. The results remain robust across a series of additional tests and alternative specifications. Overall, this study demonstrates how historical agricultural practices continue to shape modern entrepreneurial behavior through culturally embedded social mechanisms.

Suggested Citation

  • Ma, Xinru & He, Jingbin, 2026. "From fields to firms: How rice-farming culture influences entrepreneurial entry decisions," Economic Modelling, Elsevier, vol. 162(C).
    • Handle: RePEc:eee:ecmode:v:162:y:2026:i:c:s0264999326002087
    DOI: 10.1016/j.econmod.2026.107679
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    JEL classification:

    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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