A Study On The Influence Of Financial Literacy On Family Entrepreneurship Decision-making

Family entrepreneurship plays an important role in increasing the gross national product and creating jobs.The development of entrepreneurial activities plays an important role in promoting China’s economic development,maintaining a stable economy,building a well-off society in an all-round way,and smoothly realize a drive for socialist modernization.Among them,entrepreneurship education and credit constraints are two important factors affecting family entrepreneurship.Financial literacy is an important part of entrepreneurship education and training.A survey and analysis of the Financial Rights Protection Bureau of the Central Bank show that in recent years,although China’s national financial literacy as a whole has shown a gradual upward trend,there are still deficiencies in basic financial knowledge,and there are big differences in financial behavior and financial skills.The threshold of venture capital is the primary problem faced by entrepreneurs.Families with high wealth have a higher probability of starting a business.With the continuous development of China’s economy,family wealth,income and assets continue to improve,but the wealth gap between families in China is also increasing.This paper mainly studies the impact of financial literacy on family entrepreneurship decision-making,and how financial literacy affects entrepreneurship decision-making.At the same time,in the context of the increasing wealth gap between families in China,what impact will financial literacy have on family entrepreneurship decision-making? I hope this paper can provide some references for our entrepreneurial families.The data used in this paper is from the "Family Questionnaire of China Family Finance Survey 2019",collected nationwide by the China Family Finance Survey and Research Center of the Southwestern University of Finance and Economics.The database contains the financial knowledge of family members,which provides a basis for the measurement of financial literacy.In the asset and liability part,the paper provides data for the measurement of household wealth gap.Additionally,this paper defines the measurement index of financial literacy through factor analysis,using the wealth Gini coefficient to refer to the wealth gap,setting up a probit model to analyze the benchmark regression results of financial literacy on family entrepreneurship decision-making.In order to examine the urban-rural differences,this paper uses the cross-product of financial literacy and household registration to analyze the differences between urban and rural areas,and then analyzes the moderating effect of the wealth gap on the impact of financial literacy on family entrepreneurship decision-making.Considering the endogenous problem of financial literacy,this paper uses an instrumental variable method to test the regression results of financial literacy on entrepreneurial decision-making and the regression results of financial literacy and wealth gap multiplier on entrepreneurial decision-making.In order to ensure the validity of the results,this paper applies the replacement financial literacy measurement method and the tail method to test the robustness of the results.Finally,the paper analyzes the mechanism of financial literacy to strengthen entrepreneurial decision-making.The study found that: 1.The overall level of family financial literacy in China is low,and there is a big gap between families regarding financial literacy;2.The improvement of financial literacy can increase the probability of family entrepreneurship decision-making,but there are differences between urban and rural areas;3.Financial literacy affects family entrepreneurship decisions through the mediating effect of credit constraints;4.The increase of the wealth gap is conducive to the positive role of financial literacy and the promotion of family entrepreneurship decision-making.Based on the theoretical analysis and empirical research results,this paper provides suggestions on improving financial literacy,narrowing the wealth gap in China,improving financial services in rural areas,and improving the lending market.I hope this paper can provide references for the government and entrepreneurial families.