Abstract
The influence of a household’s political background on entrepreneurship has attracted considerable attention and is particularly popular in developing countries. However, few empirical papers have investigated the interaction between the political background of households and institutional environments and entrepreneurship. We address the gap by firstly analysing two sets of nationwide survey data, the China Family Panel Studies (CFPS) from 2010 to 2012 and the China Household Finance Survey (CHFS) from 2011 to 2013. After controlling for a number of demographic characteristics, we find that in regions with large local governments and more political intervention, households who have a family member with a political background are more likely to engage in entrepreneurship. Furthermore, because of the effects of the anti-corruption campaign after 2012, the advantages of having a political background for becoming an entrepreneur have, on average, declined, especially in regions with large local governments.
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We would like to thank seminar participants at the 11th International Conference on Asian Financial Markets and Economic Development, the 2015 Joint China Accounting and Finance Review (CAFR) and Journal of Accounting, Auditing and Finance (JAAF) Conference, the School of Finance in SWUFE, and the Central University of Finance and Economics, as well as Jing Xie, Yue Li, and Han Li, for their valuable comments and suggestions.
1Xiang Zhang, School of Finance, Southwestern University of Finance and Economics, 611130, Chengdu, China. Email: xiangzhang@swufe.edu.cn.
2Ph.D. Student, School of Finance, Southwestern University of Finance and Economics, 611130, Chengdu, China China. Email: lunyi.li94@gmail.com.
3Ph.D. Student, Center for Doctoral Studies in Business of Universitat Mannheim, 68131, Mannheim, Germany. Email: ziheng.li@gess.uni-mannheim.de.
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Zhang, X., Li, L. & Li, Z. Political Background and Household Entrepreneurship in China. China Account Financ Rev 18, 3 (2016). https://doi.org/10.7603/s40570-016-0003-8
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DOI: https://doi.org/10.7603/s40570-016-0003-8