This paper examines the impact of Dibao, the largest guaranteed minimum income program in the developing world, on micro-enterprise formation among Han and ethnic minority households in poor rural villages of China. The study relies on novel survey data that provides the first and only...

Using a survey dataset of Chinese rural households, we find that access to external finance is positively associated with the decision to become entrepreneur, the initial investment for microenterprises and the use of external finance. Also, we find that the use of informal finance is positively...