EconomicsSeminar( 2019-11)

Topic: Student Quality, College Selectivity and the Birth of Firms

Speaker: Ruixue Jia，UC San Diego

Time: Tuesday, June 18, 13:30-15:00p.m

Place: Room 217, Guanghua Building2

Abstract:

Most of the existing studies on entrepreneurship rely on survey data and face the challenge of connecting the ex ante entry decision with ex post firm performance. In this paper, we study how student quality and college selectivity affect the probability of becoming firm owners and the long-run success of the firms by linking three major Chinese administrative datasets – individual records in the National College Entrance Exam, college admission records, and the information on owners of the universe of Chinese firms. These datasets provide us rich information for 12 million individuals in their mid-30s, who have established around 1.1 million firms. We find that (1) given college selectivity, better students (those with a higher exam score) are less likely to become firm owners, even though their firms would be more successful in the long run, and (2) given student quality, better colleges are more likely to produce firm owners while their influence on long-run success is nuanced. In light of several theories, we show that these patterns are most consistent with the importance of outside option and entry barrier in shaping occupational choices. We also provide further evidence for our interpretation by exploring the interplay between student quality and college selectivity and investigating the role of business cycles.

Introduction：

Ruixue Jia is an assistant professor at School of Global Policy and Strategy, UC San Diego.

//gps.ucsd.edu/faculty-directory/ruixue-jia.html

Your particpation is warmly welcomed!