| Summary/Abstract |
Based on data obtained from the Survey of Industrial Firms in China, the Chinese General Social Survey and prefecture‐level city data, this paper explores whether entrepreneurship will promote productivity growth in China. The research also examines whether entrepreneurship acts as a transmission mechanism affecting productivity through market competition, knowledge spillover and factor structure. Our empirical results reveal a relatively significant U‐shaped relationship between entrepreneurship and productivity and confirm the existence of a transmission mechanism of entrepreneurship. Among the three effects, the market competition effect is the most significant, followed by knowledge spillover and factor structure effects. An entrepreneurial heterogeneity test reveals that there is no significant difference between the effect of necessity entrepreneurship and overall entrepreneurship on productivity. However, a positive correlation is found between opportunistic entrepreneurship and productivity. Therefore, entrepreneurship plays a unique role in promoting economic growth in China.
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