Social Capital And Venture Finance Selection Of Migrant Worker

The Third Plenary Session of the18th CPC Central Committee proposed the strategy of " Develop Inclusive Finance, Encourage Financial Innovation, Enrich Financial Market Level and Product". An inclusive financial system is one that services all clients—not just the relatively well-off. This includes reaching out to the high risk of entrepreneurial activity with affordable financial services tailored to its needs,then promote economic growth.Migrant workers’entrepreneurship is one of the means they solve employment and poverty. Entrepreneurship need enough money to start a career and circulation. We find that,how to finance venture capital is much more a problem of how to derive resources from rural society than a simple economic problem.China’s rural social network has obvious characteristics of" Differential mode of association".The migrant workers’social capital were developed by genetic connection, affinity connection and region connection.The impact of social capital on the venture capital finance is a very important problem. The impact of social capital on the rural credit behavior benefited construction of Inclusive Finance System.Based on the data from a national survey, this paper analyze the migrant workers’ venture capital finance problem from the perspective of social capital,and applied the ordered response to,from three dimensions including the personal characters,family endowment and social capital,probe the determinant factors that affect the venture capital finance of the migrant workers.In particular,we have divided the social capital into "integrating social capital","bridging social capital" and "political capital". The mechanism of social capital is that social capital affect venture capital finance by reduction of transaction cost.Survey results show that migrant entrepreneurs rely mostly on its own funds, and less credit channel, Informal lending is still is the main stream of rural financial market.Only a few entrepreneurs have access to formal lending, which seriously restrict the development of migrant workers’own businesses. Interestingly,Empirical analyse results show that the personal characters, social capital are important factors affect migrant entrepreneurs credit behavior,while family endowment has no obvious significant effect on venture finance selection.Endogenous finance can substitute exogenous finance in most case.Compared with female migrant workers or first generation migrant workers, male migrant workers or new generation migrant workers are more likely to get effective lending,"integrating social capital","bridging social capital" and "political capital" has a significant positive effect on the effective lending, that means social capital plays an important role in the rural credit market.