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The Impact of Heterogeneous Credit Constraints on Entrepreneurial Performance of the Farmers

【Authors】
LI Changsheng & HUANG Jikun
【WorkUnit】
LI Changsheng (Jiangxi Agricultural University, 330045)HUANG Jikun (Peking University, 100871)
【Abstract】

It is a core issue for the entrepreneurs to improve entrepreneurial performance. Based on the credit equilibrium theory and the survey data in Jiangxi province, this paper identifies the credit constraints and examines their impact on financial performance of the entrepreneurial farmers. The results of the endogenous treatment effect model show that the financial performance of the entrepreneurial farmers who suffer from credit constraints is 94% lower than those free from credit constraints. If the credit constraints can be totally alleviated, their financial performance will be improved by about 45%. The combination of the control function approach and the results of the OLS model shows that all kinds of credit constraints negatively affect the financial performance. The financial performance of the farmers who suffer from credit constraints caused by total quantity, risk and partial quantity are 34%, 26% and 16% less than that of those free from such constraints. The robustness check made by the impact of credit constraints on farmers. growth performance testifies the negative relationship between credit constraints and farmers. entrepreneurial performance. Therefore, differential credit policies should be implemented to ease credit constraints and improve farmers' entrepreneurial performance.


JEL:G21, Q14, M21

【KeyWords】
Entrepreneurial Performance, Credit Constraints, Credit Equilibrium Model, Control Function Approach, Endogenous Treatment Effects Model