TY  - CHAP
AB  - Abstract Individuals who spend a large percentage of their incomes on consumption are perceived to prefer risks. Since entrepreneurs are well recognized as risk-takers, this chapter investigates whether consumption propensity is associated with entrepreneurship. Using micro-level data from Chinese Household Income Project, we find that households with a higher income–consumption ratio on average have a higher preference for risk-seeking, while they have a lower probability to be entrepreneurs. However, households who have higher consumption–income ratio and are in the top 10% of the wealth distribution are more likely to embark on entrepreneurship. In addition, we find that in-system connection (relationship with government-related units) decreases the likelihood of starting new business, while out-system connection (relationship with market units) increases it. These findings suggest that in an imperfect financial market, start-up finance and connections play important roles for entrepreneurship.
VL  - 26
SN  - 978-1-78973-273-3, 978-1-78973-274-0/1571-0386
DO  - 10.1108/S1571-038620190000026013
UR  - https://doi.org/10.1108/S1571-038620190000026013
AU  - Hu Mingzhi
AU  - Liu Jiaqi
AU  - Wang Xue
PY  - 2019
Y1  - 2019/01/01
TI  - Consumption Propensity and Entrepreneurship: Evidence from China
T2  - Asia-Pacific Contemporary Finance and Development
T3  - International Symposia in Economic Theory and Econometrics
PB  - Emerald Publishing Limited
SP  - 265
EP  - 286
Y2  - 2024/04/20
ER  -