The Impact of Risk Aversion and Migrant Work Experience on Farmers’ Entrepreneurship: Evidence from China
Round 1
Reviewer 1 Report
Comments and Suggestions for AuthorsThe paper, "The impact of risk aversion and migrant work experience on farmers' entrepreneurship: evidence from China," is relevant and in general suitable for the journal Agriculture.
However, several issues need to be fixed.
General issues
(1) The abstract needs to be improved. Details follow below.
(2) The material and methods part must be improved in structure and content. Details follow below.
(3) Please check if the cited literature supports your claims.
(4) A discussion section must be added in which you discuss the results in relation to the international literature. Some additional literature should be recognized, e.g. Wu et al. (2023), Graskemper et al. (2021), Chanda & Unel (2021), Knapp, Wuepper & Finger (2021).
(5) The conclusion should be extended and include implications for future research on risk attitudes and entrepreneurship and the limitations of your research.
Specific issues
L16: “…data from 669 field trials…” Later, you explain that the data originates from a distributed questionnaire. A survey is not a field trial! Please clarify.
L21-23: "Firstly, entrepreneurial farmers have lower levels of risk aversion than non-entrepreneurial farmers. Secondly, farmers with low risk aversion tend to choose entrepreneurship and favor corporate and portfolio entrepreneurship." These two sentences indicate that risk aversion and entrepreneurship correlate negatively but do not indicate any causal relationship. However, your IV estimates, if correct, indicate that the causality goes from risk attitudes to entrepreneurship. This should be highlighted also in the abstract.
L32-33: "Entrepreneurship holds significant importance not only in terms of fostering innovation and facilitating long-term economic growth within a nation [1,2],…" Please note that reference [1] does not support your claim. The paper deals with financial intermediaries and growth, not with entrepreneurship and growth! Please check and correct.
L48-52: "Evidence suggests that in 2021, China's migrant worker population amounted to 292 million individuals; in contrast, during the same period in 2022, only about 9.9 million returned to their home villages to embark on entrepreneurial activities, constituting a mere 3.38% of the previous year's total migrant worker population." Please provide the source of these numbers.
L60-61: "The number of migrant workers choosing to work in the provinces has been declining since 2014…" What does "in the provinces" mean? Do you mean "in other provinces"? Please clarify.
L66: “Figure 1…” Please provide the data source. What does "…from different provinces…" mean? Please clarify.
L67-69: "The concept of "Risk attitude" is a classic underlying assumption in the field of economics, where advances in history often originate from a select group of unique and innovative "entrepreneurs" [11]. Your claim is not supported by reference [11], which is Knight (1921). Knight did not use the term risk attitude or study innovative entrepreneurs! Please check and correct your claim.
L88: Please add subsections to section two, for instance, before line 89: 2.1 Risk preferences and its measurement. Before line 128: 2.2 Risk aversion, migrant experiences, and farmers' entrepreneurship. Before line 150: 2.3 Hypotheses
L89-91: "Risk preference theory belongs to a particular branch of risk theory proposed by Friedman & Savag. Markowitz conducts an analysis of this theory in 1952 [17,18], while Pratt and Arrow further discuss measures of risk preference [19,20], respectively." Please locate the references directely after the authors' names, like this: "Risk preference theory belongs to a particular branch of risk theory proposed by Friedman & Savag [17]. Markowitz [18] conducts an analysis of this theory in 1952, while Pratt [19] and Arrow [20] further discuss measures of risk preference."
L89-127: The logical structure of the part could be improved. Please also refer to the literature using the measurements of your study, that is, DOSPERT, SOEP, and BERT.
L231-246: "2. Material and Methods…": Please delete this section. It obviously accidentally entered the manuscript.
L247: "3. Empirical Design and Descriptive Statistics" should better read as "3. Material and Methods"
L248: Please add a subsection "3.1 Sample" before line 248. Please also add more information on the sample and survey. When exactly was the survey conducted? Add more details on the Stratified Sampling and Judgemental Sampling Procedure.
L248-249: "This paper selected the four provinces and cities of Sichuan, Chongqing, Guizhou, and Yunnan in southwest China 255 as the sample area." Please avoid the formulation "This paper…" The paper did not select anything. You selected the sample for your research. So you might better formulate "For this research we selected…". Moreover, what is the meaning of 255? Please clarify.
L254: "3.1 Method migrant experience" should better be read as "Econometric models and estimation," and this section should be moved after the variables (currently section 3.3). Moreover, this section should contain more consistent information on the econometric estimation approach, including the robustness tests and the IV estimations.
L266: 3.2 Risk Preference Measurement Experiments and Statistics: This section should also contain information on the measurement of SOEP and BERT. The descriptive statistics should also include SOEP and BERT (Table 3).
L280-283: "As shown in Tables 1 and Table 2, the majority of farmers are in the medium risk aversion group, with entrepreneurial farmers having significantly lower levels of risk aversion than non-entrepreneurial farmers, and a higher percentage of farmers in the low risk aversion group." Table 2 does not support the claim that "entrepreneurial farmers having significantly lower levels of risk aversion than non-entrepreneurial farmers". No statistical test was performed or reported. Please clarify.
L289-290: "The selection, interpretation, and statistical description of the variables are shown in Table 4." It is Table 3! Please correct.
L300-301: "Core Explanatory Variable. The weighted average of DOSPERT is used as the risk aversion coefficient in the benchmark regression." The core explanatory variable is insufficiently explained. The values of DOSPERT in Table 3 differ from the values presented in Tables 1 and 2. However, it is not clear how the DOSPERT index was calculated from DOSPERT. Please clarify.
L305: Table 3. The table should also include the descriptive statistics for the SOEP and BERT variables and the variables used in the first stage of the IV estimation.
L309: "The statistical results shown in Table 4 are generated using the Stata15 software, after dealing with the multicollinearity and heteroskedasticity problems." Please provide more details on how you dealt with the multicollinearity and heteroskedasticity problems. This should be part of the methods section "Econometric models and estimation."
L310: "Specifically, Regressions 1, 2, 4, and 5 employ the Probit model to assess the variables "whether to enter entrepreneurship" and "corporate entrepreneurship", while Regressions 3 and 6 utilize the Oprobit model to analyze portfolio entrepreneurship." Please note that the Probit model can only be used for dichotomous variables. However, "corporate entrepreneurship" is, according to Table 3, an ordinal variable. Please clarify. The estimation strategy should be part of the methods section "Econometric models and estimation".
L323: Table 4. The model type should be indicated in the table, for instance, in a third row below the model number: (1) Pobit, …(3) Oprobit…" Please also indicate the model type in all other results tables. Please also indicate the meaning of "C". I guess it should mean constant. In this case, I suggest to spell it out as all other variables in the respective tables.
L347: “This paper…” See before.
L347-369: This part belongs to the methods section, and you should move it to the current section 3.2.
L367-378: "We use the ratio of households' safe assets (non-risky assets) to total assets as an instrumental variable. To avoid other reverse causality problems of the IV and risk aversion due to contemporaneous data, the IV is calculated based on asset data from the period before the start-up." This part should be moved to the methods section, "Econometric models and estimation". Furthermore, the descriptive statistics of the ratio of households' safe assets should be included in Table 3. The results of the first stage estimation should be provided in Table 8.
L435-437: "(1） Entrepreneurial farmers are found to have a lower average level of risk aversion compared to non-entrepreneurial farmers. Farmers are more inclined to choose values with higher levels of risk appetite in their subjective self-evaluation." Please note that no statistical test was performed or presented supporting this claim. Please clarify.
L496-470: "Secondly, multiple measures should be taken to reduce farmers' entrepreneurial risks." How is this implication related to your results? Please clarify.
L475: "Data Availability Statement: The data presented in this study was obtained from the team survey." Please indicate the availability of your data for other researchers. Please publish the data set as supplementary material. At least it would be best if you made it available on request.
Suggested additional literature.
Chanda, A., & Unel, B. (2021). Do attitudes toward risk taking affect entrepreneurship? Evidence from second-generation Americans. Journal of Economic Growth, 26(4), 385-413.
Graskemper, V., Yu, X., & Feil, J. H. (2021). Analyzing strategic entrepreneurial choices in agriculture—Empirical evidence from Germany. Agribusiness, 37(3), 569-589.
Comments on the Quality of English Language
Some typos need to be corrected, like "weak" instead of "week". Grammar could be improved.
Author Response
Please see the attachment
Author Response File: 
Author Response.pdf
Reviewer 2 Report
Comments and Suggestions for AuthorsIn general, an interesting issue was taken up in this study. However, I have a few comments/doubts.
1. I wonder if the title properly accentuates the problem approached. It seems to me that the authors intended to study the relationship: migration - risk aversion - entrepreneurship (the impact of migration on aversion, and then aversion on enterpreneurship). Thus, should "risk aversion" and "migrant work experience" be on the same level (i.e., connected by the conjunction "and"). Just for consideration.
2. Perhaps it would be useful to add a conceptual graphical framework - with a particular demonstration of the relationship between entrepreneurship - risk aversion - migration
3. Line 90: „Friedman & Savag” -should be „Savage”
4. What does the “entrepreneurship” mean ? - is it a non-agricultural or agricultural activity / - this clarification appears in part only in Apendix B1 - in my opinion, this issue should be discussed/clarified in the main text.
5. What does "choose entrepreneurship" mean in H1 (off-farm activities?)?
6. Line 96: “Moreover, risk aversion leads to a preference for less risky choices, given that the probabilities can be determined with certainty.” - how to understand that probabilities can be determined with certainty ?
7. Line 106: Does this quote refer to the previous sentence ?
8. Line 137: „potential termination potential” ?
9. Line 170: “…farmers are more do not inclined towards…” ?
10. Line 205: “Migrant” – I don't think you need a capital letter
11. Line 232 -246 – „Matarials and methods” – it's some kind of mistake, because there are only the publisher's hints here
12. Line 250: If "Judgmental Sampling" was used, who decided on the selection of the respondent - please provide more information
13. Line 284 – It seems that table 1 and table 2 can be combined into one
14.Line 305 - Tables 3 - is there any point in counting "mean value" for dichotomous variables ? Maybe it is better to give the distribution in %.
15. Line 316: There is mention of a significance test - the question, however, is , whether the sample was representative (because if I understand correctly, it was not selected at random ?). Is it justified to use a significance test if the sample is not representative (random) ?
Author Response
Please see the attachment
Author Response File: Author Response.pdf
Reviewer 3 Report
Comments and Suggestions for AuthorsThe article is interesting as such and links risk aversion with entrepreneurial activity of farmers and whether experience as migrant does influence this relationship. This is for the Chinese situation an interesting question.
Main remarks
1. The article is still too much resembling a student thesis work and should be more constructed as a scientific article. There are too much econometric tests compared just to show that results are robust; this doesnot seem necessary to me
2. The article is difficult to read for whom is not familiar with the Chinese local situation because some concepts are not well defined: such as entrepreneurship (first model): what is the differentiating characteristic as to my opinion all farmers are entrepreneurial, so you distinguish between farmers applying conservative farming and those doing something more but this is not well explained; the same is true for the two other independent variables used in the paper (entrepreneurial entrepreneurship and portfolio. These variables should be better defined.
3. A conceptual framework is missing explaining the controlling variable choice and their expected influence. There should be a reasoning behind why these variables are selected and what is their theoretical expected influence
4. Be careful with the income variable: for me this is a resulting variable of the choice made by the farmers and not an explanatory variable
5. I am not sure that in the model with the two regions the dummy variable trap is avoided. Please check
For other remarks see the annotated file
Overall: the article should be shortened (by avoiding all the unnecessary econometric tests (they can eventually be put in annex if you think they add something) and should be written in a standard scientific style (conceptual framework, hypotheses, empirical results and interpretation)
Comments for author File: Comments.pdf
English is standard but the article should gain of a review by an English native in order to make reading more fluent
Author Response
Please see the attachment
Author Response File: Author Response.pdf
