The self-employment of the industry choices of dispossessed farmers in China

•A theoretical model is established for the first time in the literature about this research topic.•A Multinomial Logit model is used to empirically quantify the specific influencing factors.•Decision-making of self-employed industry is the result of synergistic effects exerted by both internal and external factors.•The entrepreneurial, adjustment and protective policies are provided to facilitate the propensity of successful startups.

Rapid urbanization has generated an increasing number of dispossessed farmers in China, with the issues and problems involved gaining extensive attention by the government and academia. Some of them are turning to entrepreneurial activities as an alternative means to earn a living that can solve their long-term livelihood. This study has identified the factors influencing their choices of self-employed industry based on the Grounded theory. Then four hypotheses are developed and quantitatively tested by the Multinomial Logit regression analysis method with 219 observations collected in Zhejiang Province. The empirical results indicate that the four hypotheses receive different levels of support. The decision-making of specific industry is the result of synergistic effects exerted by both internal and external factors. Dispossessed farmers with similar characteristics tend to choose similar industries. The entrepreneurial, adjustment and protective, policies are put forward to facilitate the likelihood of dispossessed farmers' successful startups.