Entrepreneurship and Growth: Evidence from China

Hongbin Li, Zheyu Yang, Xianguo Yao and Junsen Zhang

Discussion Papers from Chinese University of Hong Kong, Department of Economics

Abstract: This paper examines the impact of entrepreneurship on economic growth by using a panel data set of 29 provinces in China over 20 years. Two indicators of entrepreneurship are defined and introduced into the traditional growth regression framework that is estimated using the system generalized method of moments. We also use the ratio of staff and workers of state-owned enterprises and per capita sown land area as the instrumental variables to identify the causal effect of entrepreneurship on economic growth. Our results suggest that entrepreneurship has a significant positive effect on economic growth and this finding is robust even after we control for other demographic and institutional variables. Our study provides some evidence that may be used as a basis for evaluating the effect of China’s policy on private business which has been increasingly relaxed since the late 1970s.

JEL-codes: L26 O53 (search for similar items in EconPapers)
Date: 2009-10
New Economics Papers: this item is included in nep-cna, nep-dev, nep-ent, nep-fdg, nep-sbm and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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