The regional entrepreneurship of Small & Medium Business in China

Although comprehensive data from official statistics on new firm formation and entrepreneurs starting a new Small & Medium Business business are lacking in China, we know from empirical studies that entry rates differ between regions, and that the propensity to become an entrepreneur is influenced by socio-demographic variables like sex and age. The focus of our paper is on the link of these two stylized facts. Our econometric study is based on data for 600 persons from a recent representative survey of the population in three China regions. We use a version of the probit model that takes care of the regional stratification of the data, and the results of the nonlinear models are careftilly interpreted and illustrated. We show that the region matters for the decision to start a new Small & Medium business ceteris paribus, i.e. The consequences of these findings for regional policies to encourage new firm entry are discussed briefly in the concluding section.