Does housing purchase affect entrepreneurship? -Evidence from urban households in China

The study applies an endogenous switching probit model, using the data from the China Household Finance Survey (CHFS) to explore the joint decision mechanism between housing purchase and entrepreneurship and estimate the (treatment) effect of housing-purchase on entrepreneurship. The findings are th...

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Bibliographic Details
Published in:International review of economics & finance 2024-11, Vol.96, p.103621, Article 103621
Main Authors: Dong, Zhaoyingzi, Chi-man Hui, Eddie, Yu, Chenwei
Format: Article
Language:English
Subjects:
Endogenous switching probit model
Entrepreneurship
House-purchase
Urban households
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Summary:The study applies an endogenous switching probit model, using the data from the China Household Finance Survey (CHFS) to explore the joint decision mechanism between housing purchase and entrepreneurship and estimate the (treatment) effect of housing-purchase on entrepreneurship. The findings are threefold. First, a higher housing price reduces the probability of house-purchase intention, and also that of actual house-purchase-action. Second, both house-purchase-intention and -action discourage actual entrepreneurship investment. Third, house-purchase-intention has a negative effect on potential entrepreneurship plans, while house-purchase-action encourages households to plan for a business in the future.
ISSN:1059-0560
DOI:10.1016/j.iref.2024.103621