PUBLICATIONS & REPORTS

Contents Introduction

Returnee entrepreneurs have caught intensive attention from China’s local governments due to their significant roles in regional economic development, but they distributed very unevenly in the country and the research on the influential factors of their uneven distribution has yet remained undeveloped. Taking the most notable returnee entrepreneurs as samples, this paper examines how returnee entrepreneurs choose to locate their firms by analyzing their locational choice behaviors within a utility maximization framework. A nested logit model is derived to empirically analyze the impact of place as well as personal characteristics on the probability of a place to be chosen. The results show that the locational choices of returnee entrepreneurs were largely affected by economic factors (such as market size and economic dynamics), high technology power, and social connections. The result that the effect of tolerance factor is not statistically significantly influential suggests that entrepreneurs may behave differently from other members of creative class and future scholars need to be more cautious to mix employers with employees when discussing creative class theory. From the analysis results of this paper, policy implications were drawn to guide the policymakers and practitioners to attract returnee entrepreneurs.