The Making of Entrepreneurship: Does Language Ability Matter?

29 Pages Posted: 13 Mar 2018 Last revised: 21 Mar 2018

See all articles by Xiahai Wei

Xiahai Wei

Independent

Yang Jiao

Fort Hays State University

Glenn Growe

Fort Hays State University

Date Written: January 13, 2018

Abstract

Business ownership and self‐employment constitute a vital part of the economy. Entrepreneurs can provide employment for themselves and others. While many of the determinants of entrepreneurship have been intensively studied, the link between language ability and entrepreneurship has not. Using the Chinese Migrant Population Data from 2013 to 2014, this paper studies the importance of language ability when immigrants choose to become entrepreneurs. As a unique regional verbal form, dialect is an important channel to show one’s identity. Acquiring the local dialect increases entrepreneurial prospects by helping immigrants build their social network, enhancing their social identity, and reducing barriers to starting a business. We find that immigrants who can understand and fluently speak the local dialect are more like to become entrepreneurs. The effect of language on entrepreneurship is more pronounced in the urban fringe, towns and rural areas, and especially where individuals migrate across different dialectal regions. Gaining local dialect skills positively influence the decision to become either a necessity or an opportunity-driven entrepreneur. This paper reveals the impact of the dialect on startup activities, and it has important implications for immigrant’s employment decisions.

Keywords: Language Proficiency, Dialect, Entrepreneurship, Migrants, China

JEL Classification: M13, M21

Suggested Citation

Wei, Xiahai and Jiao, Yang and Growe, Glenn, The Making of Entrepreneurship: Does Language Ability Matter? (January 13, 2018). Available at SSRN: https://ssrn.com/abstract=3139384 or http://dx.doi.org/10.2139/ssrn.3139384

Xiahai Wei

Independent ( email )

No Address Available

Yang Jiao (Contact Author)

Fort Hays State University ( email )

Hays, KS 67601
United States

Glenn Growe

Fort Hays State University ( email )

Hays, KS 67601
United States
785-628-5682 (Phone)

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