| Abstract: |
This paper examines the impact of entrepreneurship on economic growth by using
a panel data set of 29 provinces in China over 20 years. Two indicators of
entrepreneurship are defined and introduced into the traditional growth
regression framework that is estimated using the system generalized method of
moments. We also use the ratio of staff and workers of state-owned enterprises
and per capita sown land area as the instrumental variables to identify the
causal effect of entrepreneurship on economic growth. Our results suggest that
entrepreneurship has a significant positive effect on economic growth and this
finding is robust even after we control for other demographic and
institutional variables. Our study provides some evidence that may be used as
a basis for evaluating the effect of China’s policy on private business which
has been increasingly relaxed since the late 1970s. |