Can China’s Aging Population Sustain Its Entrepreneurship? Evidence of Nonlinear Effects

Hongying Yang,Jin Yu,Dahui Zhou,Ming-Hsiang Chen,Ching-Hui (Joan) Su

doi:10.3390/su12083434

Abstract

This article examines the effects of China’s aging population (in terms of the old-age dependency rate (OADR)) on entrepreneurship (in terms of dimensions of innovation (IE) and self-employment (BE)) using data from 30 provinces from 2003 to 2017. Contrary to a widespread pessimistic interpretation that describes an aging population as merely a burden on entrepreneurship, this paper illustrates some positive effects of China’s aging population on entrepreneurship in terms of IE and BE. Moreover, we introduce and test the nonlinear relationship between OADR and IE/BE. Our simple panel regression model can be utilized not only to understand the inverted U-shaped effects of an aging population on entrepreneurship, by using the ordinary least squares (OLS) method and fixed-effects (FE) in our empirical studies and the system generalized method of moments (SYSGMM) in the robustness check, but also to provide managerial implications by pointing out the “optimal OADR” and the comparative regional aging situation.

Highlights

Entrepreneurship has been recognized as playing an important role in creating new jobs and new markets, promoting innovations and maintaining sustainable competitive advantages in all economies [1]
The linear effects determined from the scatterplot and the linear effects model show that OADR has positive impacts on in Entrepreneurship (IE)/Business for Entrepreneurs (BE), so the positive relationship between an aging population and entrepreneurship is proved
The test results run counter to the stereotype of an aging population having only negative impacts on entrepreneurship [6,7,12,13] and, more importantly, give solid support for guiding the public to recognize the value of an aging population

Summary

Introduction

Entrepreneurship has been recognized as playing an important role in creating new jobs and new markets, promoting innovations and maintaining sustainable competitive advantages in all economies [1]. It has mostly been discussed at the micro level for individuals or firms, as entrepreneurship entails the activities of individuals working within firms or for themselves [2]. Aging populations are increasing in virtually every country [5], a demographic phenomenon that has raised anxiety levels in governments as well as in academic discourse. Few studies discuss the relationship between aging and entrepreneurship in the context of developing countries. Seldom are researchers aware of the positive impacts an aging population can bring about, let alone regarding these impacts as double-sided

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Results

Conclusion