Farming experience, personal characteristics, and entrepreneurial decisions of urban residents: Empirical evidence from China

Abstract

Entrepreneurship is an important way to provide solutions for social employment problems. Using data from the 2016 China Labor Force Dynamic Survey (CLDS), we explore the influence of farming experience on urban residents’ entrepreneurial decisions at the theoretical and empirical levels. A Probit model with instrumental variables method was used to analyze the influence of farming experience on urban residents’ entrepreneurial decisions, while a mediating effect model was used to test its channels of action. The results show that: (1) farming experience can contribute to the entrepreneurial decision of urban residents relative to those without experience in farming. To overcome possible endogeneity issues, an Eprobit model based on the estimation of instrumental variables was used for testing. (2) Heterogeneity tests based on age, city type, and physical capital found that this effect was more significant in urban residents with non-capital cities, middle-aged groups, and high-material capital. (3) Farming experience indirectly drives entrepreneurial decisions through the mediating role of promoting positive personality traits, such as “optimism” and “mutual aid consciousness.” Therefore, the farming experience has a positive effect on urban residents’ entrepreneurial decisions and helps to understand the deeper influence of micro-individual characteristics on entrepreneurial decisions in the urbanization process.