Stockholm Institute of Transition Economics cordially invites you to join the online brown bag seminar `Entrepreneurial Reluctance: Talent and Firm Creation in China´ with Ruixue Jia (co-authors Chong-en Bai, Hongbin Li and Xin Wang). Read the abstract below!

Ruixue Jia is a visiting senior fellow at the Department of Management, London School of Economics, LSE. She is also associate professor at Global Policy and Strategy, UC San Diego, UCSD​​.

Jia is interested in the interplay of economics, history and politics. One stream of her research focuses on understanding elite formation and elite influence, in both historical and modern contexts. A second focus of her work is the deep historical roots of economic development. More recently, she started following the ongoing transformation of the manufacturing sector in China and expanded her interest to labor and technology issues.

Abstract

An influential theoretical literature has long noted that talent can be used in both the entrepreneur and non-entrepreneur sectors and its allocation depends on the reward restructure. We test this insight by linking administrative college admissions data for 1.8 million individuals with information on firm registration records in China. The data reveals that most of the variation in firm creation is from within college. Given the same college, we find that individuals with higher college entrance exam scores – the most important measure of talent in this context – are less likely to create firms. In contrast, we find that higher-score individuals’ firms are more successful. Additional survey data suggest that higher-score individuals enjoy higher wages and are more likely to join the state sector. Moreover, the score to firm creation relationship varies greatly across industry according to the size of the state sector. These findings together support the interpretation that the score is positively associated with entrepreneurial ability, but higher-score individuals are attracted away by other sectors, especially the state sector.