Liquidity Constraint on Entrepreneurial Choice Behavior of Peasant Households:Based on Survey of 894 Families in Shanxi,Gansu and Zhejiang Provinces

Liquidity constraints have a real impediment to entrepreneurship behavior of Chinese peasant households. Through the use family income of land rent and gift respectively as a tool variable to overcome problems that liquidity constraints is endogenous variables. Based on the empirical research of peasant households of Shanxi, Gansu and Zhejiang provinces, this paper shows that:Liquidity constraints play significantly a deter role to Chinese peasants when they choose entrepreneurship. Only liquidity constraints from formal financial departments play a deter role, but the informal financial departments can not. Therefore, entrepreneurship support policies which aim to increase farmers' income should pay more attention to the role of formal financial channel which relieves peasant′s liquidity constraints, and should not emphasize the role of non-formal finance.