Do social interactions foster household entrepreneurship? Evidence from online and offline data from China Family Panel Studies

Using China Family Panel Studies data, we analyze online and offline social interactions' influence on household entrepreneurial choice. We conclude that social interactions can positively influence household entrepreneurial choice, intensity and performance, and our findings are robust considering the possible endogeneity problem. The mechanisms of information acquisition, financing constraints relaxing and relative wealth concern are valid. In terms of heterogeneity analysis, for entrepreneurs of rural migrant backgrounds (those with agricultural hukou and urban permanent residence), the impact of online social interaction is more significant than it is for others. For households in the eastern regions, social interactions show significant positive impacts on entrepreneurship choices. We also find that the promotion effect of social interactions is more pronounced for households with a higher debt level than for those with a lower debt level.

Automated summary

Using China Family Panel Studies data, we find that online and offline social interactions have a positive impact on household entrepreneurial choice, intensity, and performance. Our findings are robust considering the potential endogeneity problem. The mechanisms of information acquisition, relaxing financing constraints, and relative wealth concern are valid. Heterogeneity analysis shows that online social interaction has a more significant impact on entrepreneurs of rural migrant backgrounds and households in the eastern regions. Additionally, the promotion effect of social interactions is more pronounced for households with higher debt levels.