Relationship between Disaster Shock Experience and Farmers’ Entrepreneurial Inclination: Crisis or Opportunity?

Abstract

In the context of climate change, it is important to examine the correlation between farmers’ disaster shock experience and their entrepreneurial inclination, as well as its adaptive mechanisms for rural development. We define farmers’ entrepreneurship as farmers engaging in self-employment or business operation, then analyze the positive and negative correlations between disaster shock experience and farmers’ entrepreneurship and propose that there is a U-shaped relationship between them. We develop a mechanism based on the mediating role of farmers’ risk appetite and the moderating role of government support. Based on a survey of 39,113 households from the 2019 China Household Finance Survey, we test our hypotheses using a probit model and structural equation modeling. The findings indicate that disaster shock experience strongly correlates with farmers’ entrepreneurship. Over time, a U-shaped trend emerges between them, in which disaster shock experience can deter farmers’ entrepreneurship through risk appetite, while government support can alleviate this inhibitory effect. Moreover, different types of disasters show the same U-shaped trend, but the relationship differs based on farmers’ gender and income levels. These findings suggest that rural areas should enhance their development capacity and disaster resilience, and the government should establish long-term support mechanisms for entrepreneurship. Additionally, farmers need to accurately understand and cope with disaster shock experience, so they can uncover the potential value and opportunities it presents.