Exploring the Influence of Village Social Capital and Rural Development on Farmers’ Entrepreneurial Decision-Making: Unveiling the Path to Local Entrepreneurship

Abstract

This paper aims to comprehensively define village social capital, assess its multifaceted dimensions in relation to farmers’ entrepreneurial decision-making, and investigate the mediating role of rural development. The research sample consists of 14,133 farmers selected through a multi-stage proportional-to-size unequal probability sampling method. Data collection was carried out using questionnaires as part of the “Chinese Thousand Village Survey” project. Empirical analysis was conducted using binary logit and basic linear regression models, supplemented by probit models and other robustness testing methods. The findings indicate that village social capital exerts a significant and favorable influence on farmers’ entrepreneurial decision-making. Controlling for other variables, a unit increment in farmers’ village social network, village social participation, and village social trust is associated with a respective increase in farmers’ odds of entrepreneurial decision-making by 3.96, 5.42, and 16.28%. Village social trust emerges as the most influential factor. Additionally, rural harmony and rural economy partially mediate the relationship between village social capital and farmers’ entrepreneurial decision-making. This study contributes to a deeper understanding of the complex interplay between village social capital and farmers’ entrepreneurial decision-making, offering valuable guidance for farmers looking to leverage village social capital in their entrepreneurial endeavors. It lays a theoretical foundation for relevant entities to strengthen village social capital and cultivate a supportive environment for rural entrepreneurship. To our knowledge, this paper is among the earlier studies that investigate farmers’ entrepreneurial decision-making. Besides, the relationship between village social capital and rural development is rarely studied in the literature as two determinants of farmers’ entrepreneurial decision-making.