Trade liberalization and entrepreneurship: Evidence from China’s WTO accession

Ni Qin, Dongmin Kong and Qin Wang

Journal of International Money and Finance, 2024, vol. 147, issue C

Abstract: We investigate the effect of trade liberalization on entrepreneurship. By using China’s World Trade Organization accession as an exogenous shock to conduct a difference-in-differences estimation, we find that trade liberalization has a sizeable positive effect on entrepreneurship. Our findings are robust to different specifications and endogeneity problems. We further discuss the plausible mechanisms driving our results: the trade induced competition, and input market channel. China’s WTO accession may lead to more entrepreneurship in areas with low levels of economic development, a high level of trust, and industries with a low level of external finance dependence.

Keywords: Trade liberalization; Entrepreneurship; China; Natural experiment (search for similar items in EconPapers)
JEL-codes: E2 F1 F2 G1 O1 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:147:y:2024:i:c:s0261560624001426

DOI: 10.1016/j.jimonfin.2024.103155

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