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How does entrepreneurship influence the efficiency of household portfolios?

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  • Rui Li
  • Yanhong Qian

Abstract

This paper examines the impact of entrepreneurship on the efficiency of household financial portfolios by constructing Sharpe ratios and Sortino ratios of seven kinds of financial assets, based on data from the 2013, 2015 and 2017 China Household Finance Survey (CHFS), in conjunction with the returns of the financial asset index of China from 2010 to 2018. Employing CRE regressions, Heckman two-stage models and PSM methods, we find that undertaking entrepreneurship helps to increase the efficiency of household portfolios significantly. This study also verifies that entrepreneurial households improve their portfolio efficiency through financial information by testing the moderating effects of social network, business experience and financial literacy. In addition, this study shows that entrepreneurial households generally adopt a less diversified strategy in asset allocation than do non-entrepreneurial households.

Suggested Citation

  • Rui Li & Yanhong Qian, 2021. "How does entrepreneurship influence the efficiency of household portfolios?," The European Journal of Finance, Taylor & Francis Journals, vol. 27(13), pages 1282-1302, September.
    • Handle: RePEc:taf:eurjfi:v:27:y:2021:i:13:p:1282-1302
    DOI: 10.1080/1351847X.2021.1883698
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    Cited by:

    1. Chatterjee, Oindrila & Gopalakrishnan, Balagopal & Mohapatra, Sanket, 2024. "Gold in household portfolios during a pandemic: Evidence from India," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 1288-1306.
    2. Yun Ye & Yongjian Pu & Ailun Xiong, 2022. "The impact of digital finance on household participation in risky financial markets: Evidence-based study from China," PLOS ONE, Public Library of Science, vol. 17(4), pages 1-16, April.
    3. Xingqiang Du & Liang Xiao & Yingjie Du, 2023. "Does CEO–Auditor Dialect Connectedness Trigger Audit Opinion Shopping? Evidence from China," Journal of Business Ethics, Springer, vol. 184(2), pages 391-426, May.

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