The effect of urban cultural diversity on the entrepreneurship of rural-to-urban migrant workers

Abstract

This paper studies the effect of urban cultural diversity on the entrepreneurship activities of rural-to-urban migrants in China. Merging nationwide data from two different sources, we construct the city index of cultural diversity and explain the entrepreneurial behavior of migrant workers from the perspective of culture. We find robust evidence that urban cultural diversity significantly increases the probability of rural-to-urban migrant workers undertaking entrepreneurial activities, and the effect is larger for necessity entrepreneurship. Compared with intraprovincial migrant workers, urban cultural diversity has a greater effect on interprovincial migrant workers. We also find that the effect of urban cultural diversity on migrant workers who work in the eastern region and highly developed cities is significantly larger. The mechanism analysis suggests that innovation resource accessibility and social inclusion explain the increase in the entrepreneurship engagement of migrant workers produced by urban cultural diversity.