An Empirical Study On Entrepreneurship And Economic Growth Of China

Since 1980s, entrepreneurship has played a more and more important role in the economic growth and researching of entrepreneurship also become the hot topic accordingly. The current entrepreneurship research has shifted its focus from"individual level"to"industrial level"and"social level", which means research the relation of entrepreneurship to economic growth is significant. Although lots of research findings we get, there are several questions still not solved. Therefore, this paper selects China to conduct the research of the relation of entrepreneurship to economic growth.Firstly, we explore the kernel of entrepreneurship by reviewing the existence literatures. And we believe that the kernel of entrepreneurship is venture and innovation. We investigate entrepreneurship based on this. After that, we build a framework for entrepreneurship including two cores ( venture and innovation), three levels ( individual, industrial and social) and several paths to improve economic growth by reviewing the theory of entrepreneurship and endogenous growth.And then, We separate entrepreneurship into venture entrepreneurship and innovation entrepreneurship and measure them for each. Venture entrepreneurship is measured by ratio the Number of Engaged Persons in Private Enterprises and Self-employed Individuals to Total Number of Employed Persons. Innovation entrepreneurship is measured by ration Three Kinds of Applications for Patents Accepted to Total Number of Employed Persons. We introduce panel data model to testify the relation between entrepreneurship and economic growth by considering endogeneity on major explained variables. The results shown that the development of entrepreneurship has significant difference in China , which entrepreneurship in eastern China is more higher than in middle and western China; Entrepreneurship has a significant positive effect on economic growth in eastern China, whereas no evidence shown this relation in middle or western China; Venture entrepreneurship shown a significant endogeneity in the model that means venture entrepreneurship and economic growth has strong interaction, while innovation entrepreneurship is not; evidence strongly supports that China regional economic growth has club convergence within the eastern, middle and western regions.Finally, after concluding the empirical results some policy suggestions are given: the government should pay more attention to improve entrepreneurship especially in the regions of middle and western China; Speedup the transforming from entrepreneurship to the final output; using effective measures to improve to interaction between entrepreneurship and economic growth; economically less-developed provinces should speed up the step of chasing by paying more attention to the entrepreneurship and other factors.