Revealing the power of informal social support: Impact on rural migrants' entrepreneurial income

Abstract

Entrepreneurship is a typical socially embedded activity and informal social support reflects the functional manifestation of unique social relationships among rural migrants. Given the limited attention in existing research, we employed data from the nationally representative China Labor-force Dynamics Survey to investigate the impact and mechanism of informal social support on rural migrants' entrepreneurial income. We found that informal social support and its sub-dimensions (instrumental and emotional support) significantly positively affect rural migrants' entrepreneurial income. A series of endogeneity and robustness tests substantiate this conclusion. Mechanism analysis suggests that these effects occur through the enhancement of entrepreneurial passion and mental health. Furthermore, using a cutting-edge machine learning method (generalised random forests) to determine the basis for variable selection in heterogeneity testing, the results reveal that industry and age have the highest importance. Subsequent analysis shows that the above effects were more significant among rural migrant entrepreneurs in labour-intensive industries and the younger generation. Finally, the theoretical and practical significance of this study has been discussed.