Original scientific paper
https://doi.org/10.1080/1331677X.2022.2091631
Can financial capability improve entrepreneurial performance? Evidence from rural China
Hong Yi
Xue Meng
Yuting Linghu
Ziyu Zhang
Abstract
The capability of individuals to manage their finances is essential
to the outcomes of their entrepreneurial activities. Using panel
data from the China Household Finance Survey (C.H.F.S.) in 2013,
2015 and 2017, this article examines how financial capability
affects entrepreneurial performance in rural China. The results
demonstrate that financial capability is positively correlated with
the scale, profitability and sustainability of entrepreneurship,
which is robust in consideration of endogeneity. The effects of
financial capability are heterogeneous for different entrepreneurs.
Furthermore, technology, labour and land act as the mediating
variables through which financial capability improves entrepreneurial
performance. Therefore, to facilitate entrepreneurial success,
it is important to provide entrepreneurs with financial
education. Meanwhile, improvements to the financial environment
should also be considered. Additionally, financial institutions
should combine financial services with factors, such as technology,
land and labour, to improve entrepreneurial performance.
Keywords
financial capability; entrepreneurial farmers (E.F.s); mediating effect; entrepreneurial performance
Hrčak ID:
304182
URI
Publication date:
31.3.2023.
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