The Impact Of Informal Finance On Entrepreneurship

Entrepreneurial activities have become an important manifestation of the development of regional economic development,and at the same time become a buffer zone for China's current employment pressure.Among them,financial development's support for entrepreneurial activities plays an irreplaceable role.In the face of the actual problem of insufficient corporate credit and insufficient collateral in the initial stage of entrepreneurship,entrepreneurs cannot obtain formal financial services provided by banks,and thus become a typical vulnerable group.The idea of informal finance is to enable disadvantaged people,disadvantaged industries and disadvantaged regions to enjoy corresponding financial services in order to develop a broad and inclusive financial system.In view of this,this paper combines theoretical analysis and empirical analysis to explore the impact of informal financial development on residents' entrepreneurship.This paper begins with a theoretical perspective,combining financial development theory and entrepreneurial theory to explore the theoretical connection between informal financial development and entrepreneurship.Then it expounds the concept of informal financial development and entrepreneurship.Focusing on the reality that informal finance can promote entrepreneurial behavior,this paper selects 3115 valid resident entrepreneurial samples from CLDS2016 data,using least squares method and(OLS)respectively.And the Probit model for demonstration.It was found that informal finance represented by household borrowing significantly promoted the entrepreneurial probability of individuals,and the results of endogenous discussions still support this conclusion.At the same time,the research also found that the impact of informal finance on entrepreneurship is heterogeneous: informal finance has significantly higher entrepreneurial growth in the eastern region than in the central and western regions;it is more significant for “employer” entrepreneurship than “self-employed” entrepreneurship.The probability of starting a business is longer.Entrepreneurship will also be largely influenced by other external factors.For example,formal financial organizations are more prominent in entrepreneurship than informal finance.To scientifically and reasonably guide entrepreneurial behavior,it is necessary to pay attention to the support of informal financial institutions,as well as the assistance of informal financial institutions,and to comprehensively improve the overall quality of individual entrepreneurship.At the same time,the paper also examines the impact of informal finance on potential entrepreneurial will,and the results show that it is still significant and makes the conclusion more stable.