What Drives Entrepreneurship in Digital Economy? Evidence from China

• Published in: Economic modelling Vol. 82; pp. 66 - 73
• Main Authors: Yin, Zhichao, Gong, Xue, Guo, Peiyao, Wu, Tao
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01-11-2019
• Subjects: Entrepreneurship; Lending; Mobile payment; Risk attitude; Social network; D10; Lending; L19; Entrepreneurship; Mobile payment; Social network; D90; Risk attitude
• ISSN: 0264-9993; 1873-6122
• DOI: 10.1016/j.econmod.2019.09.026

Using data collected in the 2017 China Household Finance Survey (CHFS), we study the impact of mobile payment on the likelihood of household entrepreneurship. In the empirical analysis, we use two-stage least squares (2SLS) regression to address the endogeneity of mobile payment. The study finds that mobile payment significantly increases the likelihood of household entrepreneurship. The mechanism could be that the mobile payment: 1) makes users more risk seeking; 2) enriches social networks; 3) provides an additional lending channel.
•Mobile payment significantly increases the likelihood of household entrepreneurship by three main channels.•Firstly, mobile payment has changed people’s risk attitude, increased the probability of taking risks.•Secondly, using Internet technology, mobile payment provides channels for dissemination of information and enriches social networks.•Thirdly, mobile payment is associated with additional lending channels and eases the credit constraints.