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Migrant Entrepreneurs and Credit Constraints under Labour Market Discrimination

Author

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  • Frijters, Paul

    () (London School of Economics)

  • Kong, Tao Sherry

    () (Peking University)

  • Meng, Xin

    () (Australian National University)

Abstract

We use a unique data of representative migrants and urban local workers in 15 Chinese cities to investigate entrepreneurship and credit constraints under labour market discrimination. We divide self employed into prefer to be self-employed and prefer to have a salaried job but cannot find one; and divide salaried workers into want-to-be entrepreneurs and happy-to-be salaried workers. Over 40 percent of migrant workers are either currently or want-to-be entrepreneurs. Both groups are very similar in terms of risk taking preferences and network size. Want-to-be entrepreneurs however suffer from credit constraints identified by negative financial shocks in the year before. Our back-of-envelope calculation reveals that overcoming the current level of credit constraints may be worth 2% of GDP per year direct earnings increases.

Suggested Citation

  • Frijters, Paul & Kong, Tao Sherry & Meng, Xin, 2011. "Migrant Entrepreneurs and Credit Constraints under Labour Market Discrimination," IZA Discussion Papers 5967, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp5967
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Akgüç, Mehtap & Liu, Xingfei & Tani, Massimiliano & Zimmermann, Klaus F., 2016. "Risk attitudes and migration," China Economic Review, Elsevier, vol. 37(C), pages 166-176.
    2. repec:eee:chieco:v:49:y:2018:i:c:p:197-209 is not listed on IDEAS
    3. repec:spr:izamig:v:6:y:2017:i:1:d:10.1186_s40176-016-0077-8 is not listed on IDEAS
    4. repec:eee:chieco:v:46:y:2017:i:s:p:s77-s101 is not listed on IDEAS
    5. Christian Dustmann & Francesco Fasani & Xin Meng & Luigi Minale, "undated". "Risk Attitudes and Household Migration Decisions," CReAM Discussion Paper Series 1514, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    6. L Rachel Ngai & Christopher A Pissarides & Jin Wang, 2018. "China’s Mobility Barriers and Employment Allocations," Discussion Papers 1811, Centre for Macroeconomics (CFM).
    7. Naudé, Wim & Siegel, Melissa & Marchand, Katrin, 2015. "Migration, Entrepreneurship and Development: A Critical Review," IZA Discussion Papers 9284, Institute for the Study of Labor (IZA).
    8. Mehtap Akgüç & Corrado Giulietti & Klaus Zimmermann, 2014. "The RUMiC longitudinal survey: fostering research on labor markets in China," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-14, December.
    9. Marcus H. Böhme & Sarah Kups, 2017. "The economic effects of labour immigration in developing countries: A literature review," OECD Development Centre Working Papers 335, OECD Publishing.
    10. Ngai, L. Rachel & Pissarides, Christopher & Wang, Jin, 2018. "China's mobility barriers and employment allocations," LSE Research Online Documents on Economics 87619, London School of Economics and Political Science, LSE Library.

    More about this item

    Keywords

    entrepreneurs; credit constraints; migration; China;

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General

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