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Trustworthiness of local government, institutions, and self-employment in transitional China

Author

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  • Dou, Jiangli
  • Ye, Bing
  • Ye, Jianliang
  • Pan, Zhidong

Abstract

In this paper, we investigate the relationship between the trustworthiness of the local government and individuals' self-employment decision by using data from the China Family Panel Studies. We find that the trustworthiness of the local government has a statistically significant role in individuals' decision about self-employment and that the marginal effect on self-employment is context dependent and increases with the quality of the institutions. The trustworthiness of the local government prompts self-employment in provinces where the market institutions are well developed and suppresses it in other regions. Heterogeneity concerns on rural-urban and generations are also explored. We also find that the quality of market institutions increases self-employment, and the scale increases with the trustworthiness of the local government.

Suggested Citation

  • Dou, Jiangli & Ye, Bing & Ye, Jianliang & Pan, Zhidong, 2019. "Trustworthiness of local government, institutions, and self-employment in transitional China," China Economic Review, Elsevier, vol. 57(C).
    • Handle: RePEc:eee:chieco:v:57:y:2019:i:c:s1043951x19300902
    DOI: 10.1016/j.chieco.2019.101329
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    Cited by:

    1. Mingzhi Zhang & Xiangyu Zhou & Chao Chen & Jianxu Liu & Jiaxi Li & Fuying Huan & Bowen Wang, 2023. "Enterprise Spatial Agglomeration and Economic Growth in Northeast China: Policy Implications for Uneven to Sustainable Development," Sustainability, MDPI, vol. 15(15), pages 1-17, July.
    2. Xiao, Yangao & Han, Nianchen & Li, Rui & Ran, Huaqing & Zhou, Shihao & Tong, Tony W., 2024. "Trademarks and firm market value: Evidence from new trademark-firm linked data in China," Research Policy, Elsevier, vol. 53(2).
    3. Hafiz Syed Mohsin Abbas & Samreen Gillani & Saif Ullah & Muhammad Ahsan Ali Raza & Atta Ullah, 2020. "Nexus Between Governance and Socioeconomic Factors on Public Service Fragility in Asian Economies," Social Science Quarterly, Southwestern Social Science Association, vol. 101(5), pages 1850-1868, September.
    4. Liu, Ning & Bao, Guoxian & Wu, Shaolong, 2023. "Social implications of Covid-19: Its impact on general trust, political trust, and trust in physicians in China," Social Science & Medicine, Elsevier, vol. 317(C).

    More about this item

    Keywords

    Trustworthiness of the local government; Self-employment; Institution; Transition;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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