Regional migration, entrepreneurship and university alumni

ABSTRACT

How does the migration of university graduates from rural to urban areas impact entrepreneurial performance? We propose that rural-to-urban migrants found larger firms than urban entrepreneurs because migrants are less risk averse, and the migration process further reduces risk aversion. Also, we propose that rural-to-urban migrants found larger firms than rural entrepreneurs because urban areas provide better entrepreneurial opportunities and resources to create larger firms. To test our hypotheses empirically, we conducted an alumni survey and analysed 283 entrepreneurs who were admitted from various locations in China to Tsinghua University in Beijing, and then went to rural areas or urban areas upon graduation. We find that alumni entrepreneurs who migrated from rural to urban areas are more likely to found firms in the top quantile of firm size. This study provides implications for designing regional policies that facilitate labour mobility from rural to urban areas.

KEYWORDS:

• regional migration
• entrepreneurship
• university alumni
• rural
• urban

JEL:

• L26
• P25

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

Notes

1. Examples include Harvard University, MIT, the University of Virginia and Stanford University in the United States; the Universities of Alberta and Toronto in Canada; and Tsinghua University in China.

Additional information

Funding

This work was supported by the Ewing Marion Kauffman Foundation; the National Natural Science Foundation of China [grant number 71150110491]; the National Social Science Fund of China [grant number 17ZDA051]; the King Center for Global Development at Stanford; the Stanford Technology Ventures Program; and the Richard M. Schulze Family Foundation.