Does farmer entrepreneurship alleviate rural poverty in China? Evidence from Guangxi Province
Does farmer entrepreneurship alleviate rural poverty in China? Evidence from Guangxi Province
Eric Yaw Naminse 0 1 2
Jincai Zhuang 0 1 2
0 Natural Science Foundation of China (NSFC) with Grant Number: 71473106 to JZ and the 2017 Guangxi Science and Technology Base and Talents Project of Beibu Gulf Marine Resource and Industrialization Development and Utilization Innovation Talents Training Demonstration Base Construction Grant Number: Gui Ke AD17195082. The funders had no role in study design , data
1 School of Management, Jiangsu University , Zhenjiang , PR China , 2 School of Economics and Management, Qinzhou University , Qinzhou , PR China
2 Editor: Hafiz T.A. Khan, University of West London , UNITED KINGDOM
In recent years, entrepreneurship has been gaining more prominence as a potential tool for solving poverty in developing countries. This paper mainly examines the relationship between farmer entrepreneurship and rural poverty alleviation in China by assessing the contribution of farm entrepreneurs towards overcoming poverty. Data were collected from 309 employees of farmer entrepreneurships in Guangxi Province through survey questionnaires. Structural equation modeling was used to conduct an analysis of the effects of three identified capabilities of farm entrepreneursÐeconomic, educational and knowledge, and socio-cultural capabilitiesÐon attitude towards farmer entrepreneurship growth and the qualitative growth of farmer entrepreneurship and how these in turn affect rural poverty, using AMOS 21. The findings show that socio-cultural capability has the greatest influence on farmer entrepreneurship growth (β = 0.50, p<0.001). The qualitative growth of farmer entrepreneurship also more significantly impacts rural poverty (β = 0.69, p<0.001) than attitude towards farmer entrepreneurship growth. This study suggests that policy makers in China should involve more rural farmers in the targeted poverty alleviation strategies of the government by equipping rural farmers with entrepreneurial skills. This can serve as a sustainable, bottom-up approach to alleviating rural poverty in remote areas of the country. The study also extends the literature on the farmer entrepreneurship-rural poverty alleviation nexus in China, and this can serve as a lesson for other developing countries in the fight against rural poverty.
Data Availability Statement: All relevant data are
within the paper and its Supporting Information
Since the turn of the 21st century, one of the major challenges facing most emerging and
transitional economies, including China, is poverty. Evidence shows that many of the world's
poorest people reside in rural areas and subsist on an income of less than US$1.25/day with
agriculture and forest activities serving as their dominant economic choices. Rural poverty
currently remains the predominant form of human deprivation in the world and affects many
lives in both the developed and developing worlds.
collection and analysis, decision to publish, or
preparation of the manuscript.
In China, the unprecedented economic growth, averaging 10% per annum in the last 35
], led to over 700 million people being lifted out of poverty. However, more than 70
million people still live below the national poverty line of US$ 354/year or its equivalent of
2,300 RMB per year (by 2010 price standards) . This is evidence that the incidence of rural
poverty in China is rising in spite of the country's economic success in recent years. Some
programs instituted in the past to fight against rural poverty yielded low results. For instance, the
ªGo Westº program led by China's central government in support of rural development.
Although it yielded some positive results through increases in the supply of rural public goods
and high technology transfers in many western parts of the country, it failed to improve
people's overall living standards, especially rural residents [
]. It has been estimated that about
half of China's rural poor live in the western provinces compared with 36% and 14% in the
central and eastern parts respectively [
]. It is also estimated that the rural poverty rate in the
western parts of China is approximately 5.7%, which is higher than the 2.8% in central and 1%
in eastern parts of the country. This has attracted serious national concern from the
government and other policy makers regarding how to curb the problem in order to prevent conflicts,
social unrest and political instability. The lack of quality human capital in rural areas is often
blamed for the low incomes associated with rural people, most of whom are farmers. They
often lack the skills to take advantage of economic opportunities [
] to improve their living
conditions. Meanwhile, since Schumpeter placed entrepreneurship at the center of economic
growth, many studies have shown that entrepreneurship plays an important role in stimulating
economic growth [
]. Moreover, there has been a recent increase in studies which show that
entrepreneurship has the potential to reduce poverty and conflicts in developing countries
However, few empirical studies exist on the role of farmer entrepreneurship in rural
poverty alleviation. Thus, this paper explores the relationship between farmer entrepreneurship
and rural poverty alleviation in Guangxi Province of China using the capability approach [
In this study, we define farmer entrepreneurship as both farm and non-farm activities
undertaken by individuals for profitable gains [
]. In other words, a farm entrepreneur is an
individual employed either on a full time or part-time basis in farming activities, such as soil
cultivation, crop growing, and livestock rearing, as the principal source of their income. This is
critical because, in China, agriculture still employs approximately 64% of the population, and
efforts to alleviate rural poverty would require attention to farmers. The study will therefore
help policy makers in China to address rural poverty from farmers' own perspective. The
study is also consistent with the main goal of the 13th Five-Year Plan (2016±2020) of the
Chinese government to prioritize rural poverty alleviation as part of the long-term social,
economic and cultural development of the country.
The remaining structure of the paper is as follows: A brief explanation on rural poverty and
farmer entrepreneurship and the relationship between them, theory and hypotheses
development, materials and methods, results and discussion, and conclusions.
Understanding rural poverty
The concept of poverty is said to be multidimensional in nature and, thus, has various
meanings. Poverty is defined as the lack of necessary resources to permit people's participation in
activities, customs and diets commonly approved by society [
]. In an attempt to emphasize
this definition, the European Commission [
] also defines people in poverty as those whose
incomes and/or resources are so inadequate as to preclude them from having what society
considers an acceptable living standard. One of the most widely used definitions is by the World
Bank , which defines poverty as the pronounced deprivation of human well-being based
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on four dimensions, namely, (a) a lack of basic human necessities (food, water, shelter, and
clothing), (b) a lack of access to basic education; (c) a lack of primary healthcare; and (d) a lack
of security and protection against discrimination. Poverty is also defined in absolute and
relative terms [
], while other scholars have defined poverty based on income and
multidimensionality [16±18] as well as whether it is transient or chronic [
] or rural or urban in
From the above, it is clear that income alone cannot be used to measure poverty because
poverty is a complex and dynamic phenomenon [
]. Rural poverty is defined in this work to
include the lack of economic, social, and cultural capabilities of individuals from commanding
the minimum standard of living based on Sen's [
] capability approach. While rural poverty in
developing countries is linked with food insecurity, rural poverty in China has to do with
limitations in human skills and competencies, which prevent people from taking advantage of
available economic opportunities to create wealth for themselves and their societies. Rural
poverty is also defined as human deprivation, which occurs in non-metropolitan areas with
populations below 50,000 and where there are more single-guardian households, less access to
public services and support for disabilities, and limited education and healthcare
opportunities. Thus, in this paper, rural poverty is regarded as the lack of economic, socio-cultural and
educational capabilities of farmers to be able to convert opportunities into profitable business
ventures to improve their living conditions.
Understanding farmer entrepreneurship
Entrepreneurship is widely seen as a driver of economic growth in developed and developing
]. Entrepreneurship is viewed not only as a multidimensional concept but as a
dynamic academic field [
] with varied meanings. For instance, entrepreneurship is often
defined as the process of `creative destruction' by innovative individuals in an economy [
also refers to the conversion of existing opportunities to create future goods and services [
However, the 2014 Global Entrepreneurship Monitoring (GEM) report [
entrepreneurship as any attempt at a new business or new venture creation, such as
self-employment, new business organization, or the expansion of an existing business by an individual, a
team of individuals or an established business. Farmer entrepreneurship, on the other hand, is
defined as a farm and/or non-farm activity undertaken by persons either on a full time or
parttime basis to command an earning [
], where the farming activity involves soil cultivation,
crop growing, and livestock rearing as the main source of income.
Farmer entrepreneurship is also related to farm diversification, self-employment or
agribusiness related activity in which a greater degree of autonomy is exhibited in controlling,
organizing, and management risks and resources to achieve higher gains. It is argued that the
desire to increase household income has been the key motivating factor that drives farmers to
become entrepreneurs in recent times.
Relationship between farmer entrepreneurship and rural poverty
A plethora of literature has examined the issue of entrepreneurship and poverty in developing
countries [29±33] but not specifically the relationship between farmer entrepreneurship and
rural poverty. For instance, using time series data from China, it is found that agriculture
contributed immensely to poverty reduction in the 1980s through increased farm productivity
]. Another investigation, on how the rural `dibao' (minimum living standard guarantee)
program in China impacted poverty, found that the pro-poor program enabled beneficiary
households to overcome rural poverty [
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The effects of location and sectoral components of economic growth on poverty in
Indonesia was also examined, and the results show that rural agricultural growth greatly impacted
poverty reduction [
]. In sub-Saharan Africa, for instance, the effects of agribusiness on
poverty revealed that agriculture entrepreneurial growth impacted significantly on poverty [
In using the capability approach to determine how the rural poor can escape from poverty, a
study found that age, gender, marital status, economic activity, and healthcare were key
determinants of community and individual economic empowerment through which people's
capabilities helped to overcome poverty [
]. From the above, it appears there is a relationship
between entrepreneurship and poverty. However, no or few studies have explored the link
between farmer entrepreneurship and rural poverty in China, which has a relatively high rural
population of approximately 46.27% with most of the poor located in rural areas in Guangxi
The potential innovations of this paper are as follows. First, few studies have explored the
link between farmer entrepreneurship and rural poverty alleviation in China using structural
equation modeling. Hence, this paper will help lay a foundation for building theory and
practice in the entrepreneurship and poverty literatures in developing countries. Second, the paper
will deepen the understanding of how farm entrepreneurs' capabilities can help to improve the
growth of farmer entrepreneurship and alleviate rural poverty. Finally, by combining
structural equation modeling (SEM) with the capability approach, the paper presents a unique
opportunity to extend the empirics of farmer entrepreneurship and rural poverty alleviation
Theory and hypotheses development
The development of entrepreneurial skills is necessary for farmers if they are to succeed in
their farm businesses. It is even more important when opportunities are located in rural
communities, which lack institutional support [
]. A search for an effective match between
farm entrepreneurial skills and market opportunities to build up the competitive urge of
entrepreneurs in farming, therefore, requires critical examination. This is important because
entrepreneur competence is needed for the development of new enterprises [
]. Thus, this
paper employs the capability approach [
] to examine how three identified capabilities
of farm entrepreneurs, namely, economic, educational and knowledge, and socio-cultural
capabilities, influence farmer entrepreneurship growth and rural poverty alleviation in
The capability approach (CA)
The capability approach is an approach developed by Amartya Sen that is used in human
wellbeing assessment [
]. Human capital development in the form of education is usually
considered an effective tool for successful entrepreneurship and poverty alleviation. Therefore,
capabilities required to alleviate rural poverty are associated with farm entrepreneurial
activities that are undertaken. The capability approach is based on the notion that poverty is a
multidimensional concept, and the development of human skills is needed for its sustainable
]. Hence, the capability approach is used to measure human wellbeing from
the perspective of giving people freedom through the expansion of their capabilities. The
approach focuses on the functioning or living conditions of individuals, which are defined as
what people can or cannot do or what they can or cannot be [
]. It is more concerned with
the ability or capacity of persons to achieve freedom of development [
]. Although some
scholars have criticized the approach for lacking specific indicators to measure poverty, others
4 / 18
have lauded it and provided indicators for measuring human wellbeing [
]. According to
the literature on the capability approach, there are four components: commodities (goods or
services that an individual or household declares are legally obtained in using an endowment),
functioning (the achievements, that is, the doings or beings of a person), utility (the desired
fulfillment of an individual) and endowment. The capability approach is perhaps one of the
most appropriate ways to address such potentially multidimensional issues as poverty.
Nussbaum  argues that the capability approach begins with normative assumptions that all
people have equal dignity and that they should all enjoy the capacity for a life of equal dignity. For
Nussbaum, such a goal has to be sensitive to the complexity of the interdependent relations
that support people's living conditions.
In many developing countries, human skills are widely lacking, and in many cases, people with
higher skills remove out of agriculture to other sectors of the economy [
]. This makes it
difficult for the governments of such countries to retain skillful farmers for entrepreneurial
activities. However, the acquisition of entrepreneurial skills by rural farmers can help increase
productivity and enhance incomes and quality of life through greater confidence [
Entrepreneurial opportunities can also easily be identified when people's capabilities are
improved, and this can lead to reductions in poverty . In this study, three capabilities of
farm entrepreneurs, namely, economic (measure of children's education, village schools'
conditions, income levels), educational and knowledge (access to information and knowledge),
and socio-cultural capabilities (an openness to decision-making processes and social
networking), are used for the investigation.
Link between farm entrepreneurs' economic capabilities and farmer entrepreneurship growth
The economic capabilities of farm entrepreneurs, in this paper, includes farm income levels,
access to market information, and chances to acquire and use new farm technologies, as well
as children's access to higher education. In studies by Koch [
] and Banerjee et al. [
found that growth in agricultural income can reduce poverty. Therefore, the ability of farm
entrepreneurs to increase farm and non-farm earnings is dependent on their economic
capability levels. The ability of children from farm households to access quality and higher
education can be a measure of the economic capabilities of farm entrepreneurs. Weaver et al. 
investigates the influence of four capabilities on employees at different stages of the innovation
process, using data from 264 surveys in China, and realized that firms typically adopt
management innovations, which are facilitated by socio-economic capabilities, to improve the firm's
performance. The capability approach has also been widely applied in health economics to
measure the wellbeing of individuals [
]. It is therefore expected that farmers' incomes can be
reinvested in non-farm businesses to create jobs, which promotes the growth of
entrepreneurship, which can lead to poverty reduction. Therefore, we propose that
H1a. There is a positive effect of farm entrepreneurs' economic capabilities on the attitude
towards farmer entrepreneurship growth.
H1b. There is a positive effect of farm entrepreneurs' economic capabilities on the qualitative
growth of farmer entrepreneurships.
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Link between farm entrepreneurs' educational and knowledge capabilities and farmer entrepreneurship growth
Knowledge can be gained through the education and training of individuals. In Uganda, it has
been found that education has a positive impact on rural poverty [
]. In China, education
helps to improve both farm and non-farm incomes, but the level of return from education in
the western areas is still low, ranging from 2.7 to 3.9% [
]. Furthermore, it has been found
that rural residents engaged in off-farm employment in China are less likely to migrate to big
]. Education facilitates the accumulation of human capital for development, and it
can also lead to improvements in the entrepreneurial exploits of individuals [
]. It has also
been found that the level of people's education and their welfare are positively correlated
]. Since the quality of education is mostly low in rural China, and children from farming
backgrounds usually drop out of school early, it seems efforts to alleviate rural poverty should
consider improving education in order to enhance the capabilities of farm households to
improve living conditions. Based on the above, we hypothesize that
H2a. There is a positive effect of farm entrepreneurs' educational and knowledge capabilities
on attitudes towards farmer entrepreneurship growth.
H2b. There is a positive effect of farm entrepreneurs' educational and knowledge capabilities
on the qualitative growth of farmer entrepreneurship.
Link between farm entrepreneurs' socio-cultural capabilities and farmer entrepreneurship growth
Social and cultural competences are interrelated, and they form part of individuals' abilities to
attain higher business goals. Social capital and cultural orientations tend to affect poverty
alleviation strategies in society [
]. Culture, on the other hand, is the deposit of knowledge,
experience, beliefs, values, attitudes, meanings, hierarchies, religion, notions of time, roles, spatial
relations, concepts of the universe and material objectives and possessions acquired by a group
of people over the course of generations through individual and group striving [
]. Culture is
dynamic and helps to shape how people in society interact with one another, either collectively
or individually. Culture has an impact on poverty and how it can be alleviated in a society.
Social skills refer to the relations or ties that exist among people [
]. These social relations
and culture are embedded in business decision-making processes and are often referred to as
`guanxi' in China [
]. The term expresses trust in relationships among families, friends,
government, and communities, as well as business partners that seek resources, information and
support for individuals in the growth of businesses [
The socio-cultural capabilities of farm entrepreneurs comprise social interactions,
networking abilities, improved culture, and available opportunities to farmers. Using 293 creative
entrepreneurs in China, Chen et al. [
] found that socio-cultural attributes positively
influence entrepreneurial activities. The socio-emotional competencies of employees in American
and South Korean firms was also assessed using the regression model, and it was found that
employees usually seek a balance between social and cultural competencies, which tends to
increase their performance in organizations [
]. A study on the relationship between
organizational justice and outcomes in India found that trust partially mediated an increase in
]. Thus, the socio-cultural capabilities of farm entrepreneurs can affect the
growth of entrepreneurship. We therefore, hypothesize that
H3a. There is a positive effect of farm entrepreneurs' socio-cultural capabilities on attitudes
towards farmer entrepreneurship growth.
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H3a. There is a positive effect of farm entrepreneurs' socio-cultural capabilities on the
qualitative growth of farmer entrepreneurship.
Link between farmer entrepreneurship growth and poverty alleviation
Entrepreneurial activities in China are widespread and the phenomenon is attributed to the
expansion of rural industries in the early years of the 1978 rural reforms. A study on the
contribution of township and village enterprises (TVEs) in China shows that a higher GDP growth
rate resulted from the higher earnings of entrepreneurs [
]. The growth of farm enterprises
can partly be attributed to attitude towards entrepreneurship [
] and the willingness of
individuals to share their resources to benefit others in society (qualitative growth). The qualitative
growth of farmer entrepreneurship is mostly evident in the provision of public goods and
services in rural communities by individuals of the community. Attitude towards farmer
entrepreneurship growth refers to the ability of farmers to found enterprises. People differ in their
ways of starting up businesses. With the accumulation of skills and interpersonal networks, the
attitude of farmers towards founding enterprises can be different. In rural Rwanda, attitude
towards entrepreneurship growth was used to analyze poverty and livelihood profiles in a
post-conflict situation. It was found that rural poverty was reduced through the combined
factors of the natural, physical, human, financial and social resources and skills of farm
]. In Brazil, using a growth modeling approach, it was found that entrepreneurial
skills training significantly increased organizational performance in nascent firms [
the Henan Province of China, community-based land helped to support agricultural villages,
leading to improvements in local living conditions [
]. It is therefore estimated that as more
farmers become entrepreneurs in rural China the supply of public goods and services can be
increased through voluntary contributions to reduce poverty. From the above, we hypothesize
H4a. There is a positive effect of attitude towards farmer entrepreneurship on rural poverty
alleviation in China.
H4b. There is a positive effect of the qualitative growth of farmer entrepreneurship on rural
poverty alleviation in China.
Materials and methods
This study was conducted under the research permit JU15/2346 approved on March 22, 2015,
by the Ethics Committee of Jiangsu University in Zhenjiang City in the People's Republic of
China. Additionally, the consent of parents was obtained orally before interviewing
respondents under 18 years old.
Three rural communities, namely, Baise, Liuzhou and Guilin in Guangxi Province, were
purposely chosen for the study because they are regarded as areas with high rates of poverty in
western China [75±78].
In 2008, for instance, the annual average farm income in the province was about US$
387.21 person/year, which is close to China's national income poverty line of US$ 377.01
person/year. Guangxi Province is officially called Guangxi Zhuang Autonomous region, and the
7 / 18
ethnic minority and language spoken is Zhuang. The selected areas are suitable for the
cultivation of tropical and subtropical fruits crops, such as garden tea, organic mango, star-fruit,
gourd plant (Cucurbitaceae) and banana, as well as the rearing of sheep, goats and birds, such
as ducks and chickens. The annual average temperature and rainfall range between 17ÊC-23ÊC
and 1000 mm-2800 mm respectively [
The data were collected between July and August 2015. A semi-structured questionnaire
measured on a 5-point Likert scale (1, strongly disagree; 2, disagree; 3, neutral; 4, agree; and 5,
strongly agree) was used to assess the quality of rural life of 309 respondents [
]. Details of
the survey questions are in S1 Table.
Sample size and data collection
When using structural equation modeling (SEM), a higher sample size is preferred [
However, it has been found that a minimum sample size of 200 is acceptable in SEM analysis [
Hence, using multistage sampling technique, this paper employs 309 respondents, comprising
eight communities in Baise, six in Liuzhou and two in Guilin, through random sampling (S2
Table). Researchers, after randomly picking these communities, chose twenty households
from the communities and interviewed mainly employees of farmer entrepreneurships. Close
contact with agricultural extension workers and dealing with communities where farmer
entrepreneurship is operational enabled us to choose the respondents. The retrieval rate of the
administered questionnaire is 86% (S2 Table).
Method of analysis
Confirmatory factor analysis. An exploratory factor analysis was first performed using
SPSS version 20 to determine the suitability of the data for factor analysis [
]. It was found
that almost all the items had significant factor loadings except items 11 (0.381) and 14 (0.375),
which were dropped because of their poor factor loadings. A confirmatory factor analysis
(CFA) was conducted using AMOS version 21. Structural equation modeling (SEM) was
chosen for the study due to its ability to mitigate problems of measurement errors in relationship
studies involving latent variables. The SEM model is a two-part model, consisting of the
measurement and structural models. The measurement model measures the relation between the
observed and unobserved variables by providing a link between the scores on the
measurement instrument. The structural model, on the other hand, measures the relationship among
the unobserved variables by specifying the manner in which a particular latent variable either
directly or indirectly influences or causes a change in the values of the other latent variables in
The following statistical indices are used to assess the goodness of fit of the model based on
their unique criteria [83±85]: chi-square (χ2), probability value (P), goodness-of-fit index
(GFI), adjusted goodness-of-fit index (AGFI), root mean square error of approximation
(RMSEA), normed fit index (NFI), comparative fit index (CFI), composite reliability (CR),
and average variance extracted (AVE).
Results and discussion
Demographic profile of respondents
The demographic profile of respondents is given in detail in Table 1. The results indicate that
60.84% are male and 39.16% female. This implies that farmer entrepreneurship is a
male8 / 18
dominated sector, although women are often observed to be more involved in downstream
agricultural activities in developing countries. This finding is in line with earlier research
which found that women are usually disadvantaged in agriculture due to uneven access to
land, especially in Asian countries [
Furthermore, 25.57% of the farm entrepreneurs are aged from 46±55 years. However, the
combined age groups of 26±35 and 36±45 constitute the largest percentage, 48.54%, which is a
relatively young age level. Having many young Chinese engaged in farmer entrepreneurship
means that rural-urban migration can be reduced. It also means the future of China's
agriculture is bright as in other developing countries where the youth is actively involved [
Married respondents make up 86.73%, while unmarried is 13.26%. This might be due to the fact
that agriculture is labor-intensive and may require more labor from family members.
Respondents' educational level indicates that 21.0% have a primary education or less, 54.69% had
education up to junior high level, 20.39% had up to the senior high and/or technical level, and
only 3.88% reached college level. This indicates that access to education in China has improved
at the basic level, but much needs to be done at college level. With an improved level of
education, farm entrepreneurs' skills and knowledge can enhance their farm activities through the
adoption of new farming techniques [
Descriptive statistics and correlation results
The mean, standard deviation, Cronbach's alpha coefficient and factor loading results are
displayed in Table 2.
The Cronbach's alpha values, which measure the relationship between the variables and
their constructs [
], are relatively higher, and this indicates a good reliability of the
constructs. All the Cronbach's alpha values range from 0.74 to 0.90, which is above the minimum
acceptable value of 0.70 [
]. The results of the correlation matrix analysis are reported in S3
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Note: ATFE = attitude towards farmer entrepreneurship growth; FEQG = farmer entrepreneurship qualitative growth; EC = economic capabilities; EKC = educational
and knowledge capabilities; SCC = socio-cultural capabilities; RP = rural poverty; SD = standard deviation; CA = Cronbach's alpha (α). N = 309.
The measurement model
The overall fitness of the model is evaluated using the results of the measurement model [
in Table 3. The results show how the average variance extracted (AVE) obtained from the
factor analysis is used to measure the convergent validity or the common medium variance of all
the constructs. According to the table, all the constructs have values greater than the threshold
of 0.5 [
]. The composite reliability (CR) index, which measures the internal consistency of
the constructs, also shows values ranged from 0.73 to 0.91, which exceed the recommended
value of 0.7 [
]. In addition, the fit indices of the model (Table 3) are as follows: χ2/df = 3.74,
GFI = 0.92, AGFI = 0.85, RMSEA = 0.05, CFI = 0.93, and NFI = 0.91 for the economic,
educational and knowledge, and the socio-cultural capability constructs, while, in the case of attitude
towards farmer entrepreneurship and the qualitative growth of farmer entrepreneurship, the
fit indices are as follows: χ2 /df = 3.63, GFI = 0.93, AGFI = 0.84, RMSEA = 0.03, CFI = 0.89,
and NFI = 0.94, and for the rural poverty (RP) construct, the fit indices are χ2 /df = 3.84,
GFI = 0.87, AGFI = 0.81, RMSEA = 0.04, CFI = 0.88, and NFI = 0.90.
Previous studies [
] argue that fit indices, such as the GFI, AGFI, CFI, and NFI, must
be greater than or equal to 0.90, while other researchers [
] suggest that RMSEA = 0.06,
and GFI = 0.85 indicate good fitness of the model. Therefore, the results show that the model
fits the data well.
The structural model
For direct measurement of the relationship between the latent variables using standardized
estimates, as shown in Fig 1, all except the economic capabilities have a positive and significant
relationship with attitude towards farmer entrepreneurship and the qualitative growth of
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0.07; AVE>0.05; χ2/df<5; GFI>0.90; AGFI>0.90; RMSEA<0.08; CFI >0.90; NFI>0.90; CA 0.5. Note:
Fig 1. Structural equation model with standardized path coefficients.
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Hypothesis supported/Not supported
It can be seen that only the relationship between economic capabilities and attitude towards
farmer entrepreneurship growth is negative, although it is still significant (β = -0.46). It can
also be observed that socio-cultural capabilities have the greatest positive effect on attitude
towards farmer entrepreneurship growth (β = 0.50) and the qualitative growth of farmer
entrepreneurship (β = 0.38). This implies that although the economic, educational and knowledge
capabilities of farm entrepreneurs are important, social-cultural capabilities tend to have a
greater effect on the growth of farm entrepreneurial activities. With regard to the direct effect
of attitude towards farmer entrepreneurship and the qualitative growth of farmer
entrepreneurship on rural poverty alleviation, it is the latter that has the stronger effect (β = 0.69),
while the former has a negative but significant effect (β = -0.15) on rural poverty. This implies
that in order to alleviate rural poverty it is imperative to emphasize the need to promote the
qualitative growth of farmer entrepreneurship.
The tests of hypotheses regarding the three capabilities of farm entrepreneurs, namely,
economic capabilities (EC), educational and knowledge capabilities (EKC), and socio-cultural
capabilities (SCC) are shown in Table 4 below.
Based on Table 4 above, it can be seen that except for the effect of the economic capability
(EC) of farm entrepreneurs on attitude towards farmer entrepreneurship (ATFE), which is
negative but significant, all other variables have shown direct significant and positive effects on
attitude towards farmer entrepreneurship growth and the qualitative growth of farmer
entrepreneurship. Further still, it is evident that the qualitative growth of farmer entrepreneurship
(FEQG) has a significant positive effect on rural poverty (RP), while attitudes towards farmer
entrepreneurship growth (ATFE) has a significant but negative effect on rural poverty (RP).
This indicates that the qualitative growth of farmer entrepreneurship has a greater effect (β =
0.690, p <0.001) on rural poverty than attitude towards farmer entrepreneurship. Therefore,
the following hypotheses: H1b, H2a, H2b, H3a, H3b and H4b are supported by the study,
while hypotheses H1a and H4a are not supported.
This study assesses the relationship between farmer entrepreneurship and rural poverty
alleviation in the Guangxi Province of China. Using a survey sample size of 309, the paper employed
12 / 18
structural equation modeling with AMOS 21, alongside SPSS, to conduct the analysis which
tested the relationship between farmer entrepreneurship and rural poverty alleviation in
China. The mediating effect of changes in the perception towards farmer entrepreneurship
among rural people is also examined. Three capabilities of farm entrepreneursÐeconomic
capabilities (EC), educational and knowledge capabilities (EKC) and socio-cultural capabilities
(SCC) were used to measure the quality of life of rural respondents on a 5-point Likert scale.
The findings indicate that socio-cultural capabilities have the greatest effect on attitude
towards farmer entrepreneurship growth (β = 0.50) as well as on the qualitative growth of
farmer entrepreneurship (β = 0.38), and this finding is supported by Chen et al. [
This is followed by the effects of educational and knowledge capabilities, which was also
found by Sanz et al. [
], and then economic capabilities have the least effect. The qualitative
growth of farmer entrepreneurship (FEQG) is also found to have a significant and positive
effects on rural poverty (RP), and this is in line with the findings of Li et al. [
]. However, the
effect of attitude towards farmer entrepreneurship growth (ATFE) on rural poverty (RP) is
negative, although it is significant.
The study also shows that about 85% of those actively engaged in farmer entrepreneurship
are aged 16±55 years old. This is an indication of existing entrepreneurial opportunities in the
rural areas of China for employment in agriculture, which can help reduce youth
unemployment. In conclusion, there is a significant relationship between farmer entrepreneurship and
rural poverty alleviation in the Guangxi Province of China.
A main policy implication of this study is that the government of China in new attempts to
alleviate rural poverty should put more emphasis on rural policies, such as the promotion of
farmer entrepreneurship in rural areas. This is because farmer entrepreneurship is a
bottomup and more sustainable approach towards alleviating rural poverty. Furthermore, an
approach which comes more from farmers' own initiative can help to reduce the financial
burden of the central government in the form of resource allocation for targeted poverty
alleviation in the country.
There are some limitations and future research directions for this study. First, part of the
survey was conducted based on self-reported answers from respondents. It is possible there
could be some questions that were not clearly understood and well answered due to challenges
encountered during the back-and-forth translation of the questionnaire from English to
Chinese. Although care was taken to minimize the occurrence of errors, we suggest that more
local people in the study areas should be recruited as data enumerators. Second, in addition to
the use of the structural equation modeling, different methods of analysis should be employed
to ensure greater robustness of the results. Third, in spite of the confidence in the findings of
the study, the data were only taken from three local communities in the Guangxi Province of
China. In the future, data should be taken from other rural communities to obtain provincial
sample representativeness in order to reach a generalized conclusion on the relationship
between farmer entrepreneurship and rural poverty alleviation in China.
S1 Dataset. Research data.
S1 Table. Survey questionnaire.
S2 Table. Survey communities and retrieval rate.
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S3 Table. Correlation matrix results.
The authors are grateful to the Academic Editor and the two anonymous reviewers for their
comments and suggestions which have significantly helped to improve this manuscript. We
would also like to thank the Editorial office of American Journal Experts (AJE) for their
assistance in English Language and grammatical editing, as well as formatting of the manuscript.
Thanks to the employees of the farmer entrepreneurships we interviewed for participating in
Conceptualization: Eric Yaw Naminse, Jincai Zhuang.
Formal analysis: Eric Yaw Naminse.
Funding acquisition: Jincai Zhuang.
Investigation: Eric Yaw Naminse, Jincai Zhuang.
Methodology: Eric Yaw Naminse, Jincai Zhuang.
Writing ± original draft: Eric Yaw Naminse.
Writing ± review & editing: Jincai Zhuang.
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15 / 18
16 / 18
17 / 18
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