Institutional Environment,Financial Development And Entrepreneurship

Entrepreneurship is gradually becoming a new engine to promote China's economic growth.How to promote the occurrence and steady growth of entrepreneurial activities has important practical significance.Among the many external factors affecting entrepreneurship,financial development plays an important role.The improvement of financial development level can increase the supply of financial resources and alleviate the constraints of entrepreneurial financing.However,in the absence of China's financial system,the financial support of entrepreneurs has not matched its important role in economic growth.“Financing difficulties” have become an important factor restricting entrepreneurship.Whether financial development can promote entrepreneurship is worth exploring.In addition,under different regional institutional environments in China,the impact of financial development on entrepreneurship may be different.Therefore,the institutional environment is included in the research framework to discuss its regulating effect.This paper summarizes the existing literature from three aspects of entrepreneurship,financial development and system,and summarizes the theoretical basis for the impact of financial development and institutional environment on entrepreneurship.Based on the existing research,this paper studies the impact of financial development on entrepreneurship from the perspective of institutional environment.First,the paper defines the concepts of entrepreneurship,financial development,and institutions,and discusses common indicators.Secondly,based on the static career choice model of Evans and Jovanovic(1989),this paper introduces financial development and institutional environmental factors,and finds that financial development promotes entrepreneurship by alleviating the financing constraints of entrepreneurial enterprises and lowering the threshold of entrepreneurial activities.In this process,the improvement of the institutional environment can further strengthen the effect of financial development to alleviate financing constraints,thus playing a positive adjustment role.Finally,this paper uses the provincial panel data of 2008,2010,2012 and 2014 to construct a fixed-effects model,using the number of new private enterprises to reflect entrepreneurship,using financial-related ratios and financial structure ratios to reflect financial development,using the proportion of non-state-owned fixed assets investment,the rule of law environment and the level of intellectual property protection to reflect the institutional environment,first examining the relationship between financial-related ratios and financial structure ratios and entrepreneurship,and then based on the benchmark model,the interaction between financial development and institutional environment is introduced to test the regulatory role of the system.The research results show that financial development has a significant role in promoting entrepreneurship.The improvement of financial structure is more conducive to the occurrence of entrepreneurial activities than the expansion of financial scale.The improvement of the property rights system and the contracting system have played a positive role in regulating,that is,as institutional environment improving,the promotion of financial development to entrepreneurship is more significant.According to this,the policy recommendations proposed in this paper are: expanding the scale of finance,improving diversified financing channels;improving the financial structure,building a capital market system that promotes entrepreneurship;optimizing the property rights system and contracting system to form an institutional environment conducive to entrepreneurship.