Inter-Regional Trust and Migrant Entrepreneurship
DOI:
https://doi.org/10.20069/gh4px255Keywords:
inter-regional trust, migrant entrepreneurship, employment stabilization, informal institution, social network, social identity, information disseminationAbstract
Amidst complex domestic and international situations and multiple unexpected factors, demand in China’s labor market has declined, creating a relatively challenging employment landscape. Under the policy directive of “strengthening the employment-first policy orientation and treating stable employment as a key indicator of the economy operating within a reasonable range,” stabilizing employment has become a top government priority. Migrant entrepreneurship not only solves their own employment issues and increases personal income levels but also creates additional job opportunities, promotes urban development, and drives economic growth, making it one of the critical measures for the government to “stabilize employment” and “ensure employment.”
Using data from the China Migrants Dynamic Survey (CMDS) from 2011 to 2017, this study finds that inter-regional trust significantly promotes migrant entrepreneurship, effectively increasing entrepreneurial probability. This conclusion remains robust after a series of tests, including instrumental variable regression, controlling for omitted variables, adjusting sample sizes, and validating with other micro-level datasets. Furthermore, mechanism analysis reveals that inter-regional trust primarily facilitates migrant entrepreneurship by enhancing social identity, expanding social networks, and promoting information dissemination, thereby uncovering the underlying reasons. Additionally, heterogeneity analysis indicates that the impact of inter-regional trust is more pronounced in regions with higher marketization levels, better e-government and digital economic development, and stronger collectivist and inclusive cultures, suggesting that it complements both formal and informal institutions. Moreover, as an informal social capital, inter-regional trust significantly influences survival-oriented entrepreneurship and entrepreneurship among low-income groups.
The marginal contributions of this study are threefold: First, it enriches research on the impact of inter-regional trust on microeconomic behaviors. Existing literature primarily examines the effects of inter-regional trust on macroeconomic outcomes such as trade and investment between countries or provinces and its relationship with corporate behaviors, with less attention to its significant role in individual micro-level behaviors, which this paper extends. Second, unlike studies that focus on the impact of social trust within a single country or region on entrepreneurial decisions, this paper explores the influence of inter-regional trust on migrant entrepreneurship from the perspective of trust between destination and origin provinces, thereby supplementing the literature on trust and entrepreneurial decision-making. Finally, while existing research mainly focuses on factors such as the household registration system, credit constraints, clan culture, and social networks affecting migrant entrepreneurship, studies on inter-regional trust as an informal institution are relatively scarce. This paper provides a new perspective.
This research contributes to understanding the significant role of inter-regional trust in promoting migrant entrepreneurship and its underlying mechanisms. It offers potential decision-making support for the government in formulating policies to support migrant entrepreneurship, with practical implications for stimulating entrepreneurial vitality, alleviating employment pressure, and promoting high-quality economic development.
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