Linguistic Capital, Social Capital, and Self-Employment of Rural-Urban Migrants in China

The entrepreneurship literature has focused on the communicative function of language, but has rarely examined linguistic capital’s effects on entrepreneurship, particularly that of dialect similarity. This research explores the role of dialect similarity in the self-employment of rural-urban migrants and how social capital, including networks and trust, mediates the role of dialect similarity in a developing economy setting. Integrating the linguistic capital theory of French sociologist Bourdieu with the social capital theory, the study examines the decision of rural-urban migrants’ self-employment in China. Analyzing the dataset from the China Migrants Dynamic Survey, we argue that rural-urban migrants who speak a dialect similar to the place of residence have a higher likelihood of engaging in self-employment, and that social capital plays a positive mediating role in self-employment decisions. We employ the Instrumental Variable and Propensity Score Matching method with a quasi-experimental approach for our empirical test. Results from both approaches strongly support our hypotheses. Lastly, research contributions and implications are discussed.