Who Are China’s Entrepreneurs?
By Simeon Djankov, Yingyi Qian, Gérard Roland, and Ekaterina Zhuravskaya*
It has been increasingly recognized that entrepreneurship plays a crucial role in
successful economies. The Schumpeterian approach to growth (Aghion and Howitt, 1997)
advances the view that entrepreneurial dynamism is the key to innovation and growth. A
growing body of policy work emphasizes the important role of entrepreneurs in economic
development (World Bank, 2003). Yet, research on entrepreneurship in economics is
There are three distinct perspectives on entrepreneurship in social sciences. The
first perspective focuses on the role of economic, political, and legal institutions in
fostering or restricting entrepreneurship. Institutional problems are seen in credit
constraints that make it impossible to borrow and set up businesses; insecurity of property
rights that provides insufficient incentives for entrepreneurs; and regulatory burdens that
make setting up new enterprises difficult.
The second perspective focuses on
the sociological variables shaping
entrepreneurship. For example, sociologists study the role of values and social networks in
promoting or discouraging entrepreneurial activities. Social networks may work through a
variety of channels, such as family, friends, or ethnic groups.
The third perspective emphasizes individual characteristics of entrepreneurs.
Psychologists have studied the traits associated with entrepreneurship – such as a personal
need for achievement, belief in the effect of personal effort on outcomes, attitudes towards
risk, and individual self-confidence.
Although there are studies on each perspective, little work looks at each of these
factors taking the other into account. This is precisely what we do in this paper, using a
new data set of Chinese entrepreneurs and a matching sample of non-entrepreneurs with
similar age, gender and educational characteristics.
The survey covers both entrepreneurs and non-entrepreneur