The effects of Urban Identity on Entrepreneurial Choice

Abstract

This study investigate how the Urban identity(UI) influence the entrepreneurial choice of the migrants. Drawing on the identity economics theory in combination with microscopic perspective on entrepreneurship, we conclude that the UI increases the odds of self-employment of the migrants by 19.91% after solving endogenous problem in our sample of 126385 individuals from the China Migrants Dynamic Survey. We test the moderating effect of medical insurance and find that the interaction coefficient is positive. This study further reveals that the expanding social networks, improving urban integration, and increasing income are the three main mechanisms through which the UI influences the entrepreneurial choice of the migrants. So, we derive results consistent with our hypotheses. The findings have implications for both the entrepreneurship and national policy literature.