Promoting or inhibiting: The role of socio-economic integration on migrant entrepreneurship

Abstract

Entrepreneurship plays a key role in promoting the global economic growth. However, the association between socio-economic integration and migrant entrepreneurship goes unnoticed. Based on 2017 China Migrants Dynamic Survey (CMDS), using a baseline regression model, Heckman two-stage model and IV Probit model, our research evidences a positive correlation between migrants’ integration into the society and their entrepreneurship. Specifically, for every standard deviation increase in the socio-economic integration level of migrants, the probability of having entrepreneurial engagement increases by 1.4%. Further findings indicates that migrant’s socio-economic integration is negatively correlated with migrant necessity-based entrepreneurship, while indicating a positive relationship between migrants’ socio-economic integration and opportunity-based entrepreneurship. The underlying mechanism of how socio-economic integration impacts migrant necessity-based entrepreneurship is through changes in the perception of difficulty and migrants’ settlement intention. The internal mechanism of how socio-economic integration influences migrant opportunity-based entrepreneurship is by changing localised social capital and migrants’ risk preference. More extensive investigations evidence that the degree of marketisation and the level of information have significant regulatory effect on the relationship between socio-economic integration and migrant entrepreneurship. Heterogeneity analysis shows that the relationship between socio-economic integration and migrant entrepreneurship varies across different levels of human capital, material capital and experience capital.