The Impact of Urban Public Services on the Residence Intentions of Migrant Entrepreneurs in the Western Region of China

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The Impact of Urban Public Services on the Residence Intentions of Migrant Entrepreneurs in the Western Region of China


1. Introduction

Regional development is conducive to promoting economic development, and the relevant literature on regional development shows that regional talent allocation has a positive impact on high-quality economic development [1]. The contemporary literature on regional economic development in the USA predominantly focuses on the conduct and efficacy of economic development policy [2]. Additionally, scholars analyze the relationship between sustained regional development and technology business incubators [3] and industrial ecology [4] and between cooperative, network-oriented, and rural sustainable development [5]. In addition, scholars analyze the impact of logistics activities on regional social development [6], the mechanism of OFDI in regional capabilities of sustainable innovation [7], the relationship between cross-regional cooperation and balanced investment in higher education and balanced and sustained regional development [8], and regional development from the perspective of coordinated development of industrialization, information technology, urbanization, and agricultural modernization [9]. However, the problem of unbalanced regional development exists because regional social capital differences may lead to differences in regional economic development [8]. Therefore, paying more attention to whether the region can develop in a balanced manner is an issue worthy of discussion in promoting sustainable economic development.
With a vast territory and rich mineral resources, the western region of China is an important area along the “Belt and Road” strategy, as well as a key and difficult area to promote common prosperity [10]. The Chinese government implements the Western Development Strategy, which promotes rapid economic development in the western region. However, compared with the eastern region of China, the western region of China has the problem of underemployment and low entrepreneurship activity, and the economy has room for development [11]. Local economic growth mainly relies on the primary and secondary industries, such as agriculture and processing industries, while the development of the tertiary industry can be improved and the transformation of the industrial structure needs to be accelerated. The Blue Book of Western Region of China: Report on Economy Development in Western Region of China 2021 points out that the driving force of innovation and development in the western region has weakened, and the level of industrial structure is relatively low [12]. Therefore, addressing the factors that constrain the modernization development of the western region and promoting harmonious economic and social development in the western region are important tasks for achieving common prosperity and achieving basic socialist modernization in China by 2035.
However, several scholars have analyzed the relationship between regional development and cross-regional cooperation [8] and coordinated development [9] but have not focused on the relationship between the level of regional public services and migrant entrepreneurs, so there is relatively little research related to the western region. This paper selects migrant entrepreneurs from western cities as the research object, exploring the factors that affect their willingness to stay where they live now and, to some extent, supplementing academic research on the western region.
With the advancement of urbanization, China’s migrant population has experienced a process of concentration in the eastern region and then diffusion to the central and western regions in terms of regional distribution. Before 2005, China’s migrant population was significantly concentrated in the eastern region. From 2005 to 2015, the proportion of migrants flowing to the eastern region decreased by nearly 10 percentage points, while the number of migrants flowing to the western region increased by 5.2 percentage points (see Figure 1). The migrant population flowing to the western region of China mainly engaged in business and labor activities, with some becoming “employers” and “self-employed workers” [13]. Most migrant workers who establish businesses in the western region possess entrepreneurial spirit and are good at identifying and utilizing opportunities, effectively avoiding risks, and integrating and utilizing local resources. Their entrepreneurial behavior not only increases personal income but also creates more job positions and job opportunities for the western region, which is conducive to promoting rapid economic development in the local area. In Figure 2, Sichuan, Yunnan, Guizhou, Xizang Autonomous Region, Chongqing, Shaanxi, Gansu, Qinghai, Xinjiang Uyghur Autonomous Region, Ningxia Hui Autonomous Region, Inner Mongolia Autonomous Region, and Guangxi Zhuang Autonomous Region belong to the western region of China.
The western region of China is the main source of outflows of migrant workers, and the massive loss of labor resources will undoubtedly lead to slow economic development. Therefore, the western region urgently needs to attract a large inflow of labor force and revitalize the local economic development. From the perspective of talent inflow in the western region, the inflow of migrant populations and entrepreneurs can bring higher human and intellectual capital, especially for entrepreneurs from the eastern region. Because the economy of the eastern region of China is prosperous and talents are gathered, most entrepreneurs from the eastern region of China have a higher level of education and a stronger ability to integrate and utilize resources, so they can keenly smell business opportunities and quickly seize them [14]. They can not only bring their rich work experience and good corporate culture to the western region but also utilize the rich local labor resources to promote entrepreneurial enterprises, achieve good business benefits, and promote local economic development. In addition, entrepreneurs who flow from the northeast region to the western region are mostly affected by the industrial structure and planned economy in the northeast region. They can choose to enter the western region and engage in entrepreneurial industries, engage in industries related to the northeast region to leverage their professional and technological advantages, or engage in industries completely different from the northeast region to unleash the creativity of entrepreneurs. Previous studies have shown that government power plays an important role in guiding population migration in the western region [15,16]. For example, the government mainly provides public services such as education, healthcare, and infrastructure in cities. Therefore, improving urban public services is an important way to attract migrant entrepreneurs. The “foot voting” mechanism also proves the conclusion that people make migration decisions based on urban public services [17,18]. Recent studies have found that human capital externalities favor individuals who gain more learning opportunities to improve their skill levels; places with high population density make it easier to match skills; and labor tends to flow to cities with high average education levels and high population density [19,20]. However, there is still controversy in theory about whether entrepreneurs flow for public services, and there is a considerable lack of relevant empirical research. Therefore, this paper will supplement the research in this area.
This paper uses microdata from the 2017 China Migrants Dynamic Survey to match urban characteristic data from 289 prefecture-level cities to study the impact of urban public services in the western region on the residence intention of migrant entrepreneurs [13] and further examines the heterogeneous effect of urban public services on the residence intention of migrant entrepreneurs. The analysis based on the Logit model shows that, controlling for both urban variables and individual variables, public services in western cities significantly affect the willingness of entrepreneurs to stay. The research findings of this article not only provide empirical evidence for the existence of Tiebout’s “foot voting” mechanism in China but also contribute to a scientific understanding of the impact of public services on the residence intention of entrepreneurs and provide inspiration for alleviating the spatial agglomeration effect of labor in China.
The main contributions of this research are as follows: First, it theoretically expands the research findings on the impact of urban public services on entrepreneurs’ residence intentions, enriches the “foot voting” mechanism, and broadens the research perspective of urban economics. Unlike previous studies, this paper is not a general exploration of whether public services affect entrepreneurship [14,21], but rather a targeted focus on the residence intentions of migrant entrepreneurs. It constructs models and deduces hypotheses from multiple dimensions of urban public services, which helps to identify more accurate factors improving migrant entrepreneurs’ residence intentions in the western region in the future. For the relevant literature on migrant entrepreneurs, this research focuses on the perspective of residence intention where entrepreneurs flow, which will help us understand the driving forces behind migrant entrepreneurs choosing where they live now. Secondly, from the perspective of household registration differences, generational differences, family structure differences, employment identity differences, industry differences, and migration range differences, this paper explains how different public services in western cities influence migrant entrepreneurs’ residence intentions and provides empirical guidance for different areas to take measures to improve the level and quality of public services. Thirdly, compared with existing literature that only uses regional or micro data, this article uses matching data at the urban and micro levels for research, overcoming the reverse causal relationship and endogeneity problems that exist when only using regional aggregate data and controlling for the influence of urban, personal, and family characteristics.

5. Heterogeneity Analysis

In recent years, both large and small cities have successively introduced a series of talent-introduction policies. In order to more carefully examine the heterogeneous impact of urban public services on the residence intention of migrant entrepreneurs [27,28], this paper conducts group regression analysis based on household registration differences, generational differences, family structure differences, employment identity differences, industry, and flow range differences.
Migrant entrepreneurs can be divided into urban migrant entrepreneurs and non-urban migrant entrepreneurs according to the type of registered residence, and their household registration is respectively non-agricultural and agricultural. This paper uses grouped regression to examine the heterogeneity of the impact of urban public services on the residence intentions of urban migrant entrepreneurs and non-urban migrant entrepreneurs in the western region of China. Columns (1) and (2) of Table 7 indicate that urban public services have a significant and positive promoting effect on the residence intention of non-urban migrant entrepreneurs entering the western areas but have no significant impact on the residence intention of urban migrant entrepreneurs. Urban average salary, economic development level, family size, education level, personal income, marital status, and inflow time have a significant and positive impact on the residence intention of non-urban migrant entrepreneurs, while urban economic development level, family size, and education level have a significant and positive impact on the residence intention of urban migrant entrepreneurs. This indicates that the main factor affecting the residence intention of urban migrant entrepreneurs is not urban public services but the level of economic development, family size, and human capital in the western region. The important consideration factors for non-urban migrant entrepreneurs residing in the western region include not only the local level of urban public services but also the average urban wage, human capital, economic income, and family migration patterns. This is related to the transition of population migration in China, which means individual labor migration transfers to family migration [22]. The proportion of non-urban migrant entrepreneurs is relatively high. Their family mobility model not only needs to meet the needs of children’s education, healthcare, cultural life, and urban environment but also needs to consider the impact of human capital and social resources of entrepreneurs on their entrepreneurial stability, as well as factors related to economic income such as urban average wages and personal income. It undoubtedly has a significant impact on the residence intentions of non-urban migrant entrepreneurs.
This paper further explores the intergenerational differences in the impact of urban public services on the residence intentions of the older and newer generations of migrant entrepreneurs. According to the related research [44], this article regards migrant entrepreneurs under the age of 35 as the new generation of migrant entrepreneurs and entrepreneurs aged 35 and above as the older generation of migrant entrepreneurs and conducts grouped regression analysis on them. As shown in columns (3) and (4) of Table 7, urban public services are only significantly and positively correlated with the residence intention of the older generation of migrant entrepreneurs. In addition, urban characteristics such as average wage and economic development level, as well as personal characteristics such as family size, education level, personal income, inflow time, and social integration, are significantly and positively correlated with the residence intention of the older generation of migrant entrepreneurs. The residence intention of the new generation of migrant entrepreneurs is more influenced by personal characteristics such as income, marital status, inflow time, and social integration. It indicates that the intergenerational differences of migrant entrepreneurs reflect whether urban public services play a significant role, which is related to the different needs of the older generation and the new generation of migrant entrepreneurs for urban entrepreneurial resources. Because the older generation of migrant entrepreneurs has elderly parents and young children, they demand education, health care, an environment, and entrepreneurial resources. The longer they flow in and the higher their degree of integration with the local society, the easier it is for them to obtain rich entrepreneurial resources, thereby increasing their economic income. This conclusion is consistent with existing studies [44].
Entrepreneurs were grouped by family structure for regression analysis to explore the impact of urban public services on the residence intentions of migrant entrepreneurs of different family sizes. Columns (5) and (6) of Table 7 show that there is a significant and positive correlation between the residence intention of entrepreneurs with small-scale family structures and urban public services, while there is no significant correlation between the residence intention of entrepreneurs with large-scale family structures and urban public services. This conclusion is consistent with the characteristic facts of the family structure of the migrant population in China [45]. Migrant entrepreneurs with small-scale family structures need public services such as urban education, culture, and medical care to help them solve children’s education and health problems. The influencing factors of the residence intention of migrant entrepreneurs with large-scale family structures are more complex. They generally need to solve the problem of children’s education and parental care and seize entrepreneurial opportunities and resources. Therefore, economic income may be the main factor influencing the residence intention of migrant entrepreneurs with large-scale family structures, rather than the level of urban public services.
This paper divides the employment status of migrant entrepreneurs into individual businesses and entrepreneurs and conducts group regression analysis. The results in columns (7) and (8) of Table 7 indicate that there is a significant and positive correlation between the residence intention of migrant entrepreneurs with individual businesses and urban public services, but there is no significant correlation between the residence intention of entrepreneurs and urban public services. This may be due to the weak risk resistance of self-employed individuals and their willingness to rely more on the public resources and services provided by the city, as well as the higher wage levels in the city.
This article also divides entrepreneurs into migrant entrepreneurs in high-tech industries and business entrepreneurs in low-tech industries based on their respective industries and conducts grouped regression analysis. Columns (9) and (10) of Table 7 show that there is a significant and positive correlation between the residence intention of migrant entrepreneurs who start businesses in low-tech industries and urban public services, but there is no significant correlation between the residence intention of migrant entrepreneurs who start businesses in high-tech industries and urban public services. This may be because most migrant entrepreneurs are engaged in basic work with low technological content, which is closely related to daily life and can promote the healthy development of the western region. They are closely related to social and economic development and various public services in cities. Therefore, there is a significant and positive correlation between the residence intention of migrant entrepreneurs in low-tech industries and urban public services, urban average wages, and urban economic development level.
This article divides entrepreneurs into intra-provincial mobility and inter-provincial mobility based on their flow range and conducts group regression analysis to explore the relationship between the residence intention of entrepreneurs with different flow ranges and urban public services. Columns (11) and (12) of Table 7 show that there is a significant and positive correlation between the residence intention of migrant entrepreneurs who move across provinces and within provinces and urban public services, and the residence intention of migrant entrepreneurs who move across provinces is stronger. This may be because the migration cost of interprovincial mobility is high, human capital is high, and the demand for public services in the destination area increases. Therefore, the level of public services flowing into the city reflects the quality of the local business environment, which can influence migrant entrepreneurs’ residence intentions.

However, entrepreneurs who move within the province have relatively low migration costs due to their short distance, small differences in social, cultural, and institutional factors, and weak sensitivity to the local business environment. Whether they reside in the local area not only considers the level of urban public services but also pays attention to the average wage level and the influence of personal factors.

7. Conclusions and Policy Implications

7.1. Research Conclusions

This paper uses the 2017 China Migrants Dynamic Survey (CMDS) and matching data from 289 prefecture-level cities to examine the relationship between the residence intention of migrant entrepreneurs in western regions with employment status as “employers” and “self-employed workers” and urban public services. At the same time, this paper conducts group regression analysis according to household registration differences, generational differences, family structure differences, employment identity differences, industry and flow range differences, and other factors, revealing the heterogeneous impact of urban public services on migrant entrepreneurs’ residence intentions in the western region. The main conclusions include:

Firstly, urban public services in the western region of China significantly affect the residence intentions of migrant entrepreneurs. That is to say, the higher the level of urban public services, the stronger the residence intention of migrant entrepreneurs. Meanwhile, further analysis of the permanent residence intention of migrant entrepreneurs who are willing to continue staying in the local area in the future shows that the level of urban public services such as education services, cultural services, medical services, and transportation services significantly enhances the permanent residence intention of migrant entrepreneurs.

Previous studies have explored the significant impact of urban public services on the permanent migration willingness of migrant populations at the overall level [39] or analyzed the driving effect of investment on entrepreneurship from the perspective of a single public service investment in urban community infrastructure [27,28,29,30,31]. This paper uses urban public services and sub-dimensions such as education, culture, medical care, transportation, environment, and communication services to analyze the residence intentions of migrant entrepreneurs, providing a reference for how to attract the flow of the migrant population in the western region.

Second, under the different circumstances of household registration differences, generational differences, family structure differences, employment identity differences, industry and flow range differences, and other factors, the residence intention of migrant entrepreneurs in the western region of China and urban public services have a heterogeneous impact. This indicates that adjusting the local urban public service level according to local conditions in the western region is beneficial for enhancing the residence and permanent residence intentions of migrant entrepreneurs.

7.2. Management Inspiration

Regionally coordinated development has been an important approach to achieving sustainable regional development, which can also promote economic development. This paper can be regarded as a part of the study of regional coordinated development and sustainable development, which can provide a reference for future discussions on regional development.

Firstly, this paper analyzes the issue of the residence intention of migrant entrepreneurs from the perspective of urban public services, which can provide a feasible macro-research perspective for existing entrepreneurial challenges and supplement current entrepreneurial research. Entrepreneurs among the migrant population are a special group in cities who play an important role in driving local economic development and increasing economic income for the migrant population. This article not only considers the impact of comprehensive indicators of urban public services on the residence intention of migrant entrepreneurs but also explores the impact of the six subdimensions of urban public services on the residence intention of migrant entrepreneurs. It deeply analyzes the impact of multidimensional factors related to people’s livelihoods on the residence intentions of migrant entrepreneurs, providing a global and local perspective for studying the entrepreneurial issues of the migrant population.

Secondly, the equalization of basic public services is the focus of achieving common prosperity. Improving the level of urban public services and benefiting more migrant populations with the fruits of economic development can not only increase the residence intentions of migrant entrepreneurs but also promote balanced development in the western region, thereby promoting the strategy of common prosperity.

7.3. Policy Recommendations

The stable residence of migrant entrepreneurs not only has a significant impact on promoting the sustainable development of entrepreneurial enterprises but also helps alleviate the urban problems caused by population agglomeration in large cities. Based on the results of baseline regression and heterogeneity analysis, this paper proposes the following policy recommendations aimed at increasing the residence intention of migrant entrepreneurs flowing to the western region and providing reference for solving the problem of urban scale polarization caused by population agglomeration and achieving common prosperity through entrepreneurial poverty reduction practices.

Firstly, focus on the residence intentions of middle-aged migrant entrepreneurs with family mobility. They mostly engage in individual businesses and generally have a higher willingness to stay in the local area. Encourage local governments to provide corresponding public services based on their needs for education services, medical services, technology, and communication services. Secondly, encourage the government to rely on the power of communities and society to provide diversified and segmented public services for migrant entrepreneurs in order to retain local migrant entrepreneurs and attract more migrant entrepreneurs. Thirdly, due to the influence of geographical location, the population in various cities in the western region is mostly scattered. Local governments are encouraged to adjust the location of public service facilities in a timely manner according to the distribution of entrepreneurial enterprises and populations and provide entrepreneurs with the necessary public services such as education, medical care, environment, technology, and communication services.

7.4. Research Shortcomings and Future Research

The study has several shortcomings that do not diminish its quality and do not call into question the obtained findings. The first shortcoming is that the research data is cross-sectional, which cannot well observe the temporal trend of the impact of urban public services on migrant entrepreneurs’ residence intentions. Another drawback is that this paper only uses empirical analysis to explore the relationship between public services and residence intention in western cities in China, and the internal mechanism of how the two affect each other is still unclear.

Therefore, the most important guidelines and suggestions for further research are as follows: (1) Panel data can be used to analyze the relationship between public services and residence intention in western cities. (2) One or more sample cities can be selected, and the case study method is used to explore the mechanisms of public services and the residence intentions of migrant entrepreneurs.


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