The Impact of Credit System Construction on Entrepreneurial Spirit: Evidence from Government, Business, Social and Judicial Sectors

Improving the credit system is an essential step in building a stable and sustainable macroeconomic policy framework, and it is also crucial for fostering entrepreneurial spirit and stabilizing employment. Based on the four key areas of social credit system construction, this paper constructs indicators for government integrity, business integrity, social integrity, and judicial credibility using data from the Credit Monitoring Platform of National Information Center. These indicators are combined with data collected through China Household Finance Survey(CHFS) to examine the impact of credit environments in the government, business, social, and judicial sectors on entrepreneurial spirit and the mechanisms. The result shows that after addressing endogeneity issues using a surname dispersion degree instrumental variable, improvements in the credit environment across the government, business, social, and judicial sectors promote entrepreneurial spirit and increase the probability of household-run business operations. These conclusions remain valid after replacing the dependent and independent variables, and conducting subsample tests. Mechanism analysis indicates that enhancing credit accessibility and social network richness are the channels through which the credit system construction fosters entrepreneurial spirit. An analysis by type of entrepreneurship reveals that a favorable credit environment not only helps boost opportunity-driven entrepreneurial spirit but also enhances necessity-driven entrepreneurial spirit. The conclusions suggest that improving the credit system by enhancing government integrity, business integrity, social integrity, and judicial credibility is conducive to fostering entrepreneurial spirit and supporting the employment foundation.