Political Background and Household Entrepreneurship in China
The influence of a household's political background on entrepreneurship has attracted considerable attention and is particularly popular in developing countries. However, few empirical papers have investigated the interaction between the political background of households and institutional environments and entrepreneurship. We address the gap by firstly analysing two sets of nationwide survey data, the China Family Panel Studies (CFPS) from 2010 to 2012 and the China Household Finance Survey (CHFS) from 2011 to 2013. After controlling for a number of demographic characteristics, we find that in regions with large local governments and more political intervention, households who have a family member with a political background are more likely to engage in entrepreneurship. Furthermore, because of the effects of the anti corruption campaign after 2012, the advantages of having a political background for becoming an entrepreneur have, on average, declined, especially in regions with large local governments.