Entrepreneurship and Income Inequality in China

Abstract

This paper explores the association between entrepreneurship and income inequality in China in recent years. Since the 1990s, according to the Global Entrepreneurship Monitor (GEM), China has become one of the most entrepreneurial countries in the world. Over the same period, China has also experienced growing income inequality as measured by the Gini coefficient. There is a large body of literature that examines the effects of entrepreneurship on economic growth and the relationship between economic growth and income inequality. It is generally acknowledged that entrepreneurial activity contributes to economic growth, but very little work has been done on the direct relationship between entrepreneurship and income disparities, especially in emerging economies. In this study we contribute to the literature by compiling the most recent data on Chinese entrepreneurship and income inequality and then investigating the impact of entrepreneurship on income inequality in China.