Can China’s Aging Population Sustain Its Entrepreneurship? Evidence of Nonlinear Effects

Hongying Yang, Jin Yu, Ching-Hui (Joan) Su, Ming-Hsiang Chen and Dahui Zhou
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Hongying Yang: School of Business and Tourism Management, Yunnan University, Kunming 650091, China
Jin Yu: School of Business and Tourism Management, Yunnan University, Kunming 650091, China
Ching-Hui (Joan) Su: Department of Apparel, Events, and Hospitality Management, College of Human Sciences, Iowa State University, Ames, IA 50011-1078, USA
Ming-Hsiang Chen: Tourism and Social Administration College, Nanjing Xiaozhuang University, Nanjing 211171, China
Dahui Zhou: College of Economy and Management, Tianjin University of Technology and Education, Tianjin 300222, China

Sustainability, 2020, vol. 12, issue 8, 1-14

Abstract: This article examines the effects of China’s aging population (in terms of the old-age dependency rate (OADR)) on entrepreneurship (in terms of dimensions of innovation (IE) and self-employment (BE)) using data from 30 provinces from 2003 to 2017. Contrary to a widespread pessimistic interpretation that describes an aging population as merely a burden on entrepreneurship, this paper illustrates some positive effects of China’s aging population on entrepreneurship in terms of IE and BE. Moreover, we introduce and test the nonlinear relationship between OADR and IE/BE. Our simple panel regression model can be utilized not only to understand the inverted U-shaped effects of an aging population on entrepreneurship, by using the ordinary least squares (OLS) method and fixed-effects (FE) in our empirical studies and the system generalized method of moments (SYSGMM) in the robustness check, but also to provide managerial implications by pointing out the “optimal OADR” and the comparative regional aging situation.

Keywords: aging population; entrepreneurship; nonlinear effects; optimal old-age dependency rate (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
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