The Impact Of Financial Knowledge On Family-owned Real Estate Entrepreneurship

Experiences at home and abroad have shown that promoting entrepreneurial behavior is of great significance to sustained economic growth,industrial restructuring,unemployment problems and so on.Since the 17 th National Congress of the Communist Party of China proposed to expand employment development and implement the strategic deployment of promoting entrepreneurship in order to promote the employment,China has successively issued a series of supportive policies to improve the entrepreneurial environment.However,the policies of improving entrepreneurial environment can only increase objective entrepreneurial opportunities,it cannot guarantee that people will have the ability to grasp entrepreneurial opportunities.The whole process of entrepreneurship will inevitably involve corporate financial knowledge.It can be said that financial knowledge,as a special kind of human capital,it is an important part of entrepreneurial ability and runs through the family entrepreneurial decision-making.As the most important financial asset of the family,real estate will definitely affect the family’s entrepreneurial behavior.In the past,the research on the relationship between financial knowledge and family entrepreneurship mostly used real estate as a representative of family wealth to study its indirect relationship with entrepreneurship,while ignoring the basic role of real estate as a production factor of entrepreneurial site and directly involved in entrepreneurship.Based on this,this paper incorporates real estate into the family entrepreneurial decision-making process,it focuses on family entrepreneurial activities that use their own real estate for production and management.The impact of financial knowledge on this particular type of entrepreneurial decision is the emphasis of this paper.Based on the analysis of family asset allocation theory,this paper explains the role of financial knowledge in the decision-making of family-owned real estate entrepreneurship from three perspectives:family wealth,formal loan availability and risk appetite.Then,based on the survey data of the China Family Finance Survey(CHFS)Center in 2015,the Probit regression model is used to empirically analyze the effects of interest rate calculation,inflation understanding andinvestment risk perception on family-owned real estate entrepreneurial decision-making and its mechanism verification.In addition,this paper also selects 19 control variables from the perspective of household head characteristics,family characteristics,social network and location characteristics.The research in this paper found that:First of all,On the whole,financial knowledge will significantly promote households to use their own real estate for entrepreneurship.However,different levels of financial knowledge have heterogeneous effects on them.Among them,inflation knowledge and investment risk perception knowledge will significantly promote the family own real estate entrepreneurial participation,while interest rate knowledge has a negative impact on it,but this effect is not Significant.In addition,financial knowledge has a greater role in promoting rural areas,low-education levels,and low-income families.The second,Other control variables such as family and household characteristics,social networks and regions will also have an impact on family’s own real estate entrepreneurial decision-making.In particular,this paper finds that the probability of using its own real estate to start a business in the eastern region is significantly lower than that in the central region.The probability of using its own real estate to start a business in rural areas is significantly higher than that in urban areas.Most of the previous studies have considered that urban areas and eastern areas have a more active entrepreneurial atmosphere and richer entrepreneurial resources,which will encourage them to have higher entrepreneurial probability.The reason why this paper draws the opposite conclusion may be that urban areas and eastern areas are always faced with high housing prices and housing tensions.On the one hand,housing in these areas often has no extra space for entrepreneurship in order to meet the needs of self-occupation.On the other hand,the suppression of entrepreneurship by high housing prices is greater than the promotion of entrepreneurship by a more active business atmosphere.The last,the mechanism verification based on the mediation effect model found that: the impact of financial knowledge on the households’ own real estate entrepreneurial decision-making is based on the three paths of wealth accumulation,formal credit availability and risk preference.At First,financial knowledge can promote the accumulation of familywealth by optimizing the allocation of household assets,thus alleviating the restraining effect of liquidity constraints on family entrepreneurship.The second,financial knowledge will increase the availability of formal credit for households and alleviate the restraining effect of financial constraints on family entrepreneurship.Finally,financial knowledge will improve the family’s risk appetite,helping decision-makers to break through the risk-conservation awareness and increase their chances of making entrepreneurial choices.This paper links real estate with entrepreneurial decision-making,to a certain extent,it has expanded the new investment methods of real estate.From the perspective of financial knowledge,clarifing its role and specific mechanism in family-owned real estate entrepreneurial decision-making,which has enlightenment for the popularization of financial knowledge,the steady development of the real estate market and the construction of an inclusive financial system.