Research

Prior research documents the intergenerational transmission of entrepreneurship: children of entrepreneurs are more likely than children of non-entrepreneurs to become entrepreneurs themselves. Yet this relationship varies considerably across entrepreneurial types and institutional environments. This study argues that intergenerational entrepreneurship depends on both the transferability of entrepreneurial resources across generations and the institutional conditions under which those resources create value. Specifically, growth entrepreneurs possess opportunity-generating social capital whose value is greatest when market institutions are weak, whereas necessity entrepreneurs primarily possess practical capabilities and localized social capital whose value changes comparatively little with market institutional development. Using a nationally representative longitudinal sample from China, I find that children of necessity entrepreneurs are more likely to become necessity entrepreneurs, whereas children of growth entrepreneurs do not exhibit a positive average tendency to follow their parents’ entrepreneurial paths. However, weaker market institutions strengthen the intergenerational transmission of growth entrepreneurship by increasing the value of inherited social capital, while market institutional development does not systematically moderate the transmission of necessity entrepreneurship. These findings demonstrate that the persistence of entrepreneurship across generations depends not only on the entrepreneurial resources parents possess but also on the institutional environments that determine the value of those resources.