Research On The Influence Of Social Capital And Financing Capability On Farmers’ Entrepreneurship

In the transformation process of China’s rural economic development at present, farmers’ entrepreneurship is an important source of power for rural economic development, an effective way to increase the farmers’ income, and an important force to boost innovation and entrepreneurship.In 2012, the 18 th CPC National Congress incorporated entrepreneurship-encouraging into the employment policy for the first time, in order to encourage farmers’ entrepreneurship.2014 central rural work conference stressed,the activity of farmers’ entrepreneurship and innovation should be stimulated, in order to promote agricultural modernization and new urbanization. In 2015, central No.1 Document clearly put forward to guide migrant workers, with skills, capitals and management experience, to return home and investment. In June 2015, the document,“the office of the State Council on support migrant workers and other people to return home business advice”,adviced to stimulate the enthusiasm of migrant workers and other people to return home and investment,by the human capital’ promoting, diffusing and sharing. In August 2015, the document, “the Ministry of agriculture on the implementation and promotion of farmers’ Entrepreneurship and innovation action plan(2015-2017) ”, further developed policies to support farmers’ entrepreneurship and innovation, to stimulate the vitality of farmers’ entrepreneurship.Compared to the traditional agricultural production and farmers’ out-working, farmers’ entrepreneurial behavior and process is much more complicated. Resource-Based-Theory emphasizes the impact of venture enterprises’ resource and hunting ability on the enterprises’ entrepreneurial process, puts forward the idea that resource heterogeneity determines entrepreneurial performance. As for farmers with relatively scarce human capital and physical capital, social capital is a kind of important resource allocation substitution mechanism to acquire favorable resource conditions. And In the current study, the mechanism of social capital to peasants’ entrepreneurship is still a "black box".Based on the mathematical model analysis, this paper applies two element regression, multinomial logistic regression, ordinal response regression, quantile regression analysis and other statistical techniques,analyzes the impact of farmers’ social capital on the entrepreneurial choice, entrepreneurial mode and entrepreneurial performance as well as the function of financing ability therein. It involves the following three aspects specifically: Firstly, review the entrepreneurship course of farmers in our country and analyze new characteristics of farmers’ entrepreneurship capital demand and new trends of farmers’ social capital evolution; Secondly, clarify the function pathways of social capital and financing ability on farmers’ entrepreneurial choice, entrepreneurship mode and entrepreneurial performance; Thirdly, put forward policy suggestions to optimize peasants’ entrepreneurial choice and improve farmers’ entrepreneurship level and performance in a scientific way. This paper tries to take the social capital as the starting point, conducts in-depth study of the action process of all dimensions of farmers’ social capital on entrepreneurial selection, entrepreneurial model and entrepreneurial performance, trying to interpret the "process black box" that the social capital affects entrepreneurial behaviors of farmers so as to equip the study with more theoretical application value. I. Main content of the paper1. Theoretical analysis of the impact social capital and financing ability to farmers’ entrepreneurship. Based on the analysis of entrepreneurial behavior theory and social capital theory, the paper explores farmers’ entrepreneurial behavior characteristics and driving factors, constructs peasants’ entrepreneurship behavior analysis framework driven together by social capital and financing ability.2.Review on farmers’ entrepreneurial progress and analysis their behavior characteristics. The paper presents the entrepreneurship progress of China’s farmers, changes of social capital and evolution of financing preference, summarizes the driving factors of farmers’ entrepreneurial behaviors’ evolution, analyzes the new requirements and new challenges of current farmers’ entrepreneurship development,in order to provide a realistic basis for the optimization of farmers’ entrepreneurship behavior from the perspectives of social capital and financing capacity.3.The influencing mechanism of social capital and financing capability on the entrepreneurial choices. Take social capital stock as a proxy variable of the liquidity constraints for entrepreneurial farmers and construct a theoretical analysis model. Discuss the impact of social capital stock and financing capability on the entrepreneurial choices from both static and dynamic perspectives, analyze the possible function mechanism and put forward the research hypothesis. Finally, construct binary logistic model to conduct empirical test on the function mechanism of social capital and financing ability on entrepreneurial choice.4.The influencing mechanism of social capital and financing capacity on the entrepreneurial model.According to farmers’ wealth levels and financing capacities, entrepreneurial models can be simplified into three types(simple production T1, expanded reproduction T2 and professional or scale production investment T3). Clarify the fundamental reason of farmers’ “development dilemma " on the basis of “fractured marginal revenue curve", analyze the feasibility that social capital helping farmers to break the "development dilemma" and put forward the research assumption. Finally, construct multinomial logistic regression model and analyze the impact of social capital on the entrepreneurial model from different dimensions as well as the role of financing ability in it.5.The influencing mechanism of social capital and financing capacity on the entrepreneurial performance. Take embedded research paradigm of entrepreneurial performance research and entrepreneurial function ?ESLKF)"|,,(Y as the bases, analyze the impact of social capital, financing capacity and their relationship on the entrepreneurial performance, put forward the research assumption. Finally, construct Ordered Response Model, analyze the impact of entrepreneurial farmers’ social capital on the entrepreneurial performance, and the function of financing ability in this affecting process; besides, adopt the method of quantile regression to judge the function differences of social capital and financing ability of farmers with different entrepreneurial performance levels.6. Ways and paths to optimize farmers’ entrepreneurial behaviors from the aspect of social capital. Based on the above theoretical and empirical analysis, inquiry into the cultivation of farmers’ social capital and improvement of financing ability, and then design the paths to optimize farmers’ entrepreneurial behaviors and put forward relevant support policy. II. Main conclusions of the paper1.Social capital’s capital and system’ property, by the function of resource acquisition and behavior restraint, can influence financing ability and farmer’s entrepreneurship. Theoretical research shows that social capital influences the farmers’ financing ability through two ways:one is that social capital’s capital’s property has the function of resource acquisition,eases the limited liability constraints, improves the ability of farmers’ financing capital by the mortgage replacement mechanism.The other is social capital’s system’s property has the function of behavior restraint,avoids the moral hazard, improve financing ability by the mechanism of transmission, supervision and punishment. Social capital influences the farmers’ entrepreneurship through two ways: social capital’s capital’s property has the function of resource acquisition,acquires the scarce resources,improves farmers’ entrepreneurial performance,by the mechanism of the resourcetransferred. The other is social capital’s system’s property has the function of behavior restraint,stimulates the farmers’ enthusiasm, enhances entrepreneurial effort level, and improves farmers’ entrepreneurial performance.2.Farmers’ entrepreneurship shows new trends and features,faceing new problems and challenges. For farmer entrepreneurs, all of capital, human resource, land, technology and projects are indispensable entrepreneurial elements, but capital plays a role of "continuous" impetus in the entrepreneurial process, and other potential elements can only be activated and transformed into realistic entrepreneurial elements by it. With the improvement of farmers’ technical abilities and management levels, the increase of labor cost,the change in the market demand, farmers’ entrepreneurship presents new characteristics, such as gradually changing from "labor intensive" into "technology and capital intensive", and bringing forward higher requirements on capital factors. Along with the improvement of education level of peasants, enhancement of the liquidity and advancement of the marketization of rural area, entrepreneurial farmers’ network resources gradually become more abundant, network density gradually becomes smaller, special reduces, and general trust increases. The maintenance cost of the relation network gradually increases. At the same time, farmers’ entrepreneurship faces new problems and challenges.Firstly,the starting point and level of entrepreneurship of China’s farmers are lower, business scale is lower than the optimal level, business models are more concentrated in agruiculture or basic social services; Secondly, although many farmers took the road of independent entrepreneurs, but the income effect and the employment effect of entrepreneurs are not significant, farmers’ entrepreneurial performance is not high;Thirdly, farmers’ entrepreneurship faces formal financial barrier;Forthly, farmers’ social capital is not attached importance to.3. The social capital ’s mortgage mechanism can improve informal financing ability, then promote the farmers’ entrepreneurial choice. Construct binary logistic model to conduct empirical test on the function mechanism of social capital and financing ability on entrepreneurial choice.Rearch findings are as follows:Firstly,network resources,sepecial trust,ordinary trust, network maintenance not only can directly improve farmers entrepreneurial choice,but indirectly influence by informal financing ability. Secondly, financing ability can improve farmers entrepreneurial choice; At the beginning,entrepreneurial funds mainly come from themselves and informal finance;Social capital improve farmers entrepreneurial choice by informal approach. Thirdly,out-working experience, familial entrepreneurial experience and reginal marking level directly influence farmers entrepreneurial choice.4. Social capital can improve financing ability and help entrepreneurial farmers to get out of "development trap",better farmers’ entrepreneurial model. Construct multinomial logistic regression model and analyze the impact of social capital on the entrepreneurial model from different dimensions as well as the role of financing ability in it. Rearch findings are as follows: Firstly,high social stratum promotes farmers to select high-threshold entrepreneurial model;ordinary trust and weak relationship maintenance diversify farmers’ entrepreneurial models; political and organizational relationship plays a positive role in entrepreneurial model. Secondly, high financing ability(formal financing ability specially) promotes farmers to select high-threshold entrepreneurial model; political and organizational resources can improve formal financial ability; social stratum, political resources,social trust,social capital maintenance can improve informal financial ability,and then better entrepreneurial model.5. Network resource and social relation maintenance can improve entrepreneurial performance,political and organizaitional resources just plays a positive role to performance of scale-agriculture entrepreneur,by the way,different financial ability has different role. Construct Ordered Response Model and Quantile Regression Model, analyze the impact of entrepreneurial farmers’ social capital on the entrepreneurial performance, and the function of financing ability in this affecting process. Rearch findings are as follows: Firstly,network resources,social capital maintenance influence positively farmers’ entrepreneurial performance; political and organizational resources just affect scale-agriculture performance;the relational feature of social capital can’t influence directly entrepreneurial performance. Secondly, formal financial ability plays a positice role in entrepreneurial performance,but informal can’t;formal fianancial ability plays completely intermediary role between political trust, organizational trust and entrepreneurial performance,plays partly intermediary role between network resources,political resources and weak-relation maintenance and entrepreneurial performance;network resources, organizational resources,socail trust and weak-relation maintenance affects indirectly entrepreneurial performance thourgh informal financial ability.Thirdly, the performance of engaging in industrial or commercial operation is better than scale-agriculture;political and organizational resources just play positive role to scale-agriculture.With the increase of quantile, the return rate of social capital has become an important reason of the enlarging gap among the performances of farmers’ start-up enterprises.In words,social capital can ease the limited liability constraint caused by low wealth levels and help entrepreneurial farmers jump out of the development trap- "low wealth level ? small credit scale ? small entrepreneurial scale and single business model ?low rate of return ? low wealth level", and then optimize the entrepreneurial mode and improve the entrepreneurial performance. III. Main innovations of the paperFirstly, this paper takes social capital as the starting point to study the influencing mechanism of social capital to farmers’ entrepreneurship, based on the clue "social capital-financing ability- farmers’ entrepreneurship", explores a new path for farmers to get rid of the entrepreneurship development trap. Targeting at the development trap of entrepreneurial farmers- "low wealth level ? small credit scale ? small entrepreneurial scale and single business model ?low rate of return ? low wealth level", it takes social capital as the breakthrough point, analyzes the mechanism of how social capital, financing capability and their relations affect entrepreneurship behaviors and explores a new path for farmers to get rid of the entrepreneurship development trap.Secondly, this paper expands the effect study of social capital theory to farmers entrepreneurship,compares the different functions of social capital different dimensions,and then uncovers the influencing mechanism of social capital to entrepreneurial choice,model and performance. Based on the analysis of entrepreneurial behavior theory, it explores the characteristics and driving factors of farmers’ entrepreneurial behaviors, constructs analysis framework of farmers’ entrepreneurship behaviors driven together by social capital and financing ability.Social capital incorporates the cultivation of social capital and maintenance cost into the scope of the examination, comprehensively reveals the impact of social capital on the farmers’ entrepreneurship behaviors from three dimensions(structural characteristics, relationship characteristics and economic cost); it compares different effects of different types of social capital from four aspects which are general interpersonal relationship, special interpersonal relationship, political relations and organization relations; it reveals the differences of effects of different financing capacities on the entrepreneurial behavior from two dimensions,that are financing capability through formal channels and financing capability through informal channels; it studies the differences of driving factors of different domains of entrepreneurial behaviors from two perspectives,that are engagement in the expansion of agricultural scale and operation in the industrial and commercial project.Thirdly, this paper studys social capital not only from static perspective,but also from dynamic perspective,analyses the influence of social capital maintenance cost to farmers’ entrepreneurship. There are a lot of papers,study social capital just from static perspective, whereas there are a little from dynamic perspective. In fact, social capital is dynamic progress based interpersonal relationship,the role of potential social capital can be played by enough mobilization.As a result,from dynamic perspective studying social capital can clearly grasp the influencing mechanism of social capital.Fourthly,the paper not only study industrial or commercial operation,but also scaleagriculture operation,in order to provide model-oriented by comparing the difference of two kind of entrepreneurial farmers.In the past, farmers entrepreneurship pay more attention to industrial or commercial operation,ignore scale- agriculture operation.Under the new situation, the development of appropriate scale-agriculture operation, especially the construction of agricultural enterprises, family farms and other new agricultural business entities has become an important guide to enhance the vitality of rural economic development.