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Analysis of Capital Constraints and Influence on the Choice of Rural Households’ Entrepreneurial Fields: Evidence from Jiangsu Province in China

Received: Aug. 09, 2018    Accepted:     Published: Aug. 13, 2018
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Abstract

The “financing difficulty” and “high expense of financing” in rural areas are the main reasons that restrict the development of rural households’ entrepreneurship, and the supply-side reform provides an opportunity to improve the rural financial environment. In this paper single variable Probit model is used, Heckman probit model and 1376 Jiangsu micro survey data to analyze the reason of farmers’ entrepreneurship. The result shows that the capital constraints exist widely in the entrepreneurship. Different kinds of capital constraints also have different effect on the field choice of farmers’ entrepreneurship. Farmers with higher property income and the more formal credit invest more probably in the non-agricultural industry, while farmers with higher formal credit frequency and the identity of creditable household will with high probability engage in the agricultural sector. In addition, the factors such as household’s age, political capital, area of cultivated land, and target recognition ability also have a significant impact on the field choice of entrepreneurship. The conclusions can provide implications for the supply-side structural reform of rural financial institutions and the policy-making of supporting entrepreneurship.

DOI 10.11648/j.sjbm.20180602.13
Published in Science Journal of Business and Management ( Volume 6, Issue 2, April 2018 )
Page(s) 45-54
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Capital Constraints, Entrepreneurial Choice of Rural Households, Entrepreneurial Fields, Heckman Probit Model

References
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    Yuan Mo, Shaoda Xu, Junhong Meng. (2018). Analysis of Capital Constraints and Influence on the Choice of Rural Households’ Entrepreneurial Fields: Evidence from Jiangsu Province in China. Science Journal of Business and Management, 6(2), 45-54. https://doi.org/10.11648/j.sjbm.20180602.13

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    ACS Style

    Yuan Mo; Shaoda Xu; Junhong Meng. Analysis of Capital Constraints and Influence on the Choice of Rural Households’ Entrepreneurial Fields: Evidence from Jiangsu Province in China. Sci. J. Bus. Manag. 2018, 6(2), 45-54. doi: 10.11648/j.sjbm.20180602.13

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    AMA Style

    Yuan Mo, Shaoda Xu, Junhong Meng. Analysis of Capital Constraints and Influence on the Choice of Rural Households’ Entrepreneurial Fields: Evidence from Jiangsu Province in China. Sci J Bus Manag. 2018;6(2):45-54. doi: 10.11648/j.sjbm.20180602.13

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  • @article{10.11648/j.sjbm.20180602.13,
      author = {Yuan Mo and Shaoda Xu and Junhong Meng},
      title = {Analysis of Capital Constraints and Influence on the Choice of Rural Households’ Entrepreneurial Fields: Evidence from Jiangsu Province in China},
      journal = {Science Journal of Business and Management},
      volume = {6},
      number = {2},
      pages = {45-54},
      doi = {10.11648/j.sjbm.20180602.13},
      url = {https://doi.org/10.11648/j.sjbm.20180602.13},
      eprint = {https://download.sciencepg.com/pdf/10.11648.j.sjbm.20180602.13},
      abstract = {The “financing difficulty” and “high expense of financing” in rural areas are the main reasons that restrict the development of rural households’ entrepreneurship, and the supply-side reform provides an opportunity to improve the rural financial environment. In this paper single variable Probit model is used, Heckman probit model and 1376 Jiangsu micro survey data to analyze the reason of farmers’ entrepreneurship. The result shows that the capital constraints exist widely in the entrepreneurship. Different kinds of capital constraints also have different effect on the field choice of farmers’ entrepreneurship. Farmers with higher property income and the more formal credit invest more probably in the non-agricultural industry, while farmers with higher formal credit frequency and the identity of creditable household will with high probability engage in the agricultural sector. In addition, the factors such as household’s age, political capital, area of cultivated land, and target recognition ability also have a significant impact on the field choice of entrepreneurship. The conclusions can provide implications for the supply-side structural reform of rural financial institutions and the policy-making of supporting entrepreneurship.},
     year = {2018}
    }
    

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    AU  - Yuan Mo
    AU  - Shaoda Xu
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    DO  - 10.11648/j.sjbm.20180602.13
    T2  - Science Journal of Business and Management
    JF  - Science Journal of Business and Management
    JO  - Science Journal of Business and Management
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    PB  - Science Publishing Group
    SN  - 2331-0634
    UR  - https://doi.org/10.11648/j.sjbm.20180602.13
    AB  - The “financing difficulty” and “high expense of financing” in rural areas are the main reasons that restrict the development of rural households’ entrepreneurship, and the supply-side reform provides an opportunity to improve the rural financial environment. In this paper single variable Probit model is used, Heckman probit model and 1376 Jiangsu micro survey data to analyze the reason of farmers’ entrepreneurship. The result shows that the capital constraints exist widely in the entrepreneurship. Different kinds of capital constraints also have different effect on the field choice of farmers’ entrepreneurship. Farmers with higher property income and the more formal credit invest more probably in the non-agricultural industry, while farmers with higher formal credit frequency and the identity of creditable household will with high probability engage in the agricultural sector. In addition, the factors such as household’s age, political capital, area of cultivated land, and target recognition ability also have a significant impact on the field choice of entrepreneurship. The conclusions can provide implications for the supply-side structural reform of rural financial institutions and the policy-making of supporting entrepreneurship.
    VL  - 6
    IS  - 2
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Author Information
  • School of Finance, Nanjing University of Finance and Economics, Nanjing, China

  • School of Finance, Nanjing University of Finance and Economics, Nanjing, China

  • School of Finance, Nanjing University of Finance and Economics, Nanjing, China

  • Section