Exploring the Effect of In Situ Urbanization on Youth Entrepreneurship in Suburban Areas with Low-Medium Development in China--A Way Forward to Sustainable Entrepreneurship Mechanism

China’s traditional suburban urbanization pattern of “passively being centralized upstairs” is not ideal, so China has been implementing human-centered new urbanization and urban–rural integration development strategy. Promoting employment through entrepreneurship is an effective way to solve the problem of long-term livelihood of land-lost farmers in China. There are few studies on entrepreneurship of land-lost farmers with the background of in situ urbanization in the suburbs. Based on the field survey data of two suburban villages representing the low–medium level of development in China, this study takes entrepreneurship of suburban youth as the research object and uses Logistic and Mlogit models to investigate the influences of psychological states of suburban youth on their entrepreneurship and the different entrepreneurial status during in situ urbanization pattern from three aspects. The results show that under in situ urbanization pattern, the psychological states of suburban youth have significant and steady influences on their entrepreneurial behaviors. Moreover, the satisfaction degree of land expropriation compensation has a partial mediation effect on suburban youth’s judgment of future life. There are different effects of the three psychological states on the two entrepreneurial states. Therefore, urban governments at all levels in China should choose the suburban urbanization pattern according to local conditions and time changes and realize sustainable entrepreneurship of suburban land-lost farmers during their becoming citizens with keeping nostalgia.

Introduction

Urbanization has significantly contributed to economic development and population. According to the seventh national population census, the urbanization rate of China’s resident population reached 63.89% in 2020, compared to 36.09% in 2000, which has maintained rapid growth in the past 20 years. Due to rapid urbanization and economic development, a large demand for construction land for real-estate development and infrastructure has emerged, so a large portion of agricultural land has been expropriated by governments (Chan, 2003; Shen et al., 2012; Lai et al., 2014). It is estimated that about 1,900 thousand hectares of farmland will be expropriated and 2,660 thousand land-lost farmers will emerge, with China’s urbanization rate increased by 1% (Huang and Tang, 2011). According to the 2011 China Urban Development report, the number of land-lost farmers in China will reach 110 million by 2030. Under traditional urbanization, which is oriented to employment and residence in central cities, most land-lost farmers in suburban areas relocated to cities and acquired urban household registration (Xu et al., 2017). However, existing studies have found that the effect of urbanization is not ideal, and the livelihood of land-lost farmers who are “passively being concentrated upstairs” is not optimistic (Lin et al., 2009; Hu, 2016). In six concentrated residential areas, for farmers who lost their land in Beijing, Henan, Sichuan, and Chongqing, 30.5 percent of them had less income compared to before land loss and 32.4 percent of them were unemployed (Cui, 2019). Other studies have found that land acquisition improves household income but reduces individual happiness (Wang et al., 2019). The internal impetus for urbanization development is insufficient (Ye, 2019). The neoliberal approach by local authorities in China may bring promising results by bringing villagers during urbanization sustained economic gains and being keeping the social and cultural tie intact among villagers (Li et al., 2014). Resettlement policy is in place in China, which has endorsed the emotional link between farmers and rural communities. This policy not only changed the spatial environment but also changed the fundamental meaning of placing the farmers (Xu et al., 2021). China’s 14th Five-Year Plan (2021–2025) has made it clear that it will adhere to the path of new urbanization with Chinese characteristics and further promote the new people-centered urbanization strategy.

The Notice of The State Council on Issues Related to Strengthening Land Control issued on 31 August 2006 clearly stated that compensation and resettlement of land expropriation must be based on the principle of ensuring that the original living standard of peasants whose land is expropriated is not reduced and their long-term livelihood is guaranteed. The newly revised Land Administration Law of the People’s Republic of China, which came into effect on 1 January 2020, once again clarified the principle of compensation for land expropriation. The development-oriented compensation, that promotes employment through entrepreneurship, is the effective way to solve the long-term livelihood of land-lost farmers (Han et al., 2017; Bao et al., 2020). Individuals derive greater wellbeing from working for themselves or for someone else (La Guardia et al., 2000; Stephan et al., 2022). Entrepreneurship is a strategic approach to solve the problems of unemployment and counter the unemployment and employment discrimination (Mosher and Trubek, 2003). It is also an international practice to solve the problem of land loss by adopting policies and measures to promote the entrepreneurship of unemployed groups (Lundström and Stevenson, 2005).

There are no studies on the entrepreneurship of land-lost farmers of new urbanization pattern in suburbs. How to effectively promote entrepreneurship among land-lost farmers in the new suburban urbanization remains unknown. This study focuses on whether suburban new urbanization affects entrepreneurship of the suburban land-lost farmers, thus providing reference for sustainable entrepreneurship of land-lost farmers in suburban areas in the urbanization process of developing countries. The possible contributions of this article are as follows: First, it explains sustainable entrepreneurship by expanding the Theory of Entrepreneurial Event and the Theory of Entrepreneurial Plan. The second is to verify the impact of the suburban new urbanization model on the sustainable entrepreneurship and new entrepreneurship of land-lost farmers by using the field research data of county-level cities in China’s middle- and low-development areas.

This article is organized as follows. Section 2 presents the literature review, theoretical framework, and research hypotheses of this study. Section 3 introduces the study design including case context and variables, models, and methods. The data are collected through a survey. The relevant variables are defined and assigned. The logistic regression model and Mlogit model are adopted for analyzing entrepreneurship and different entrepreneurial states, respectively. Section 4 presents the findings including entrepreneurship profile and analyses of regression results from three aspects. Sections 5 and 6 conclude the study and put forward relevant policy recommendations.

Literature Review, Theoretical Framework and Research Hypotheses

Literature Review

Reflection on Traditional Suburban Urbanization

The urbanization of land-lost farmers in suburban areas has been accompanied by the development process and urbanization patterns in China. Roughly from the beginning of this century to now, China’s urbanization has witnessed rapid development over the past two decades. Suburban urbanization has also experienced the process of “passive citizenization” and the reflection caused by “its problematization” (Wen, 2004; Wen, 2012; Zhao, 2015; Huang, 2020). For example, some scholars point out that under the framework of developed mentalism, urban governments attach more importance to population migration than to the protection of the interests of farmers whose land has been expropriated (Chen, 2003; Zhan, 2017). A study from the view of the residential space differentiation pointed out that the differences in the ways of urban and rural production and living and the differences in urban and rural social relations make the farmers shift from traditional village to modern city community, facing dramatic changes of life scenes and social roles; being hard to form modern urban lifestyles, behaviors, and values; and integrate into cities (Zhao, 2015). It is a consensus among scholars that we should not forcibly transform rural areas into cities and turn peasants into citizens. Some scholars point out pertinently that the quantity and level of rural public services in suburban areas restrict the process of suburban farmers’ citizenization (Wu, 2012; Wu et al., 2019). Also, China’s urbanization featuring “planning centrality and market instruments” should ensure that economic benefits justly and reasonably return to the rural users to endow their development rights (Wu, 2020). The suburban urbanization strategy should be selected based on the uniqueness of suburban villages (communities) (Lu, 2016; Wang et al., 2020). With the practice of China’s “urban–rural integration,” “new urbanization,” “rural revitalization strategy,” and the development of new urban–rural relations through urban–rural integration, the reflection of traditional urbanization and urbanization transformation have also emerged during the urbanization of land-lost farmers (Lang et al., 2016; Chen et al., 2021).

However, there are no studies on the significance and impact of China’s new suburban urbanization on the sustainable entrepreneurship of land-lost farmers in suburban areas.

Influencing Factors of Land-Lost Farmers’ Entrepreneurship

Existing studies on suburban farmer entrepreneurship have been substantial, similar to the research on entrepreneurship of farmers and returning migrant workers, and the studies mostly examined the effects of land-lost farmers’ entrepreneurial motivation, human capital, social capital, family background, financial capital, financial knowledge, entrepreneurial information, and entrepreneurial atmosphere on entrepreneurial intention, entrepreneurial behavior, or entrepreneurial performance (Bao and Peng, 2016; Sun et al., 2019). In addition, some representative theories have been developed to examine entrepreneurial intention and entrepreneurial action such as Entrepreneurial Event Theory (Zhang et al., 2014; Davids, 2017). A study from Zhejiang Province, one of China’s developed provinces, proposed that many land-lost farmers were forced to conduct entrepreneurship (Bao and Peng, 2016; Bao et al., 2020).

Under the background of China’s new urbanization and urban–rural integration development, there are no studies on entrepreneurship of land-lost farmers with the background of in situ urbanization in the suburbs instead of “passively being concentrated upstairs.” The research on influencing factors of land-lost farmer entrepreneurship needs to keep pace with the times.

Theoretical Framework

China’s National Strategic Plan for Rural Revitalization (2018–2022) clearly states that suburbs of cities should retain their rural style in form and reflect the urban level in governance, providing practical experience for urban–rural integration, which points out the direction for the development of suburban urbanization. In situ urbanization in suburbs is the urbanization of urban–rural integration. Effective governance is the foundation for suburban rural revitalization (Xu et al., 2022).

In situ urbanization in suburbs, in this article, as a suburban urbanization pattern which is different from “passively being centralized upstairs” urbanization and its characteristics can be summarized as follows: without changing the household registration and residence, relying on the affiliated cities, based on the original suburban rural communities, based on respecting the original production and lifestyle of the land-lost farmers in the suburbs, promoting the integrated development of the suburbs into the city, and paying more attention to the naturally and gradually realizing “human urbanization” of them.

Under the background of China’s new urbanization and urban–rural integration development, during suburban in situ urbanization, how satisfied are farmers in the suburbs with compensation for land loss? What are their perceptions of being citizens and farmers? Are they optimistic about their future life? Do these psychological states caused by new policy supply due to suburban new urbanization patterns have effects on suburban farmer entrepreneurship? Does it affect their maintaining businesses or their starting businesses after land loss?

The Entrepreneurial Event Theory (EET) of Shapero and Sokol, (1982) and the theory of planned behavior (TPB) of Ajzen, (1991) have been tested to be validated (Kolvereid 1996; Tkachev and Kolvereid, 1999; Krueger et al., 2000; Peterman and Kennedy, 2003; Guerrero et al., 2008). According to the model of the EET, the intention of entrepreneurship originates from the perception of feasibility and desirability, and this effect’s path is affected by the social context (Krueger et al., 2000; Peterman and Kennedy, 2003; Wilson et al., 2007). Perceived behavioral control included by the model of TPB also emphasizes effects of the perception of situational competence on becoming self-employed, which is called self-efficacy (Bandura, 1997) and is equivalent to the perceived feasibility of the EET model.

An existing study found that the temporal stability of an intention is required for an accurately predicted behavior (Audet, 2002). Also, the Entrepreneurial Event Theory emphasizes that the entrepreneurial behavior of “inertia” is affected by the outside force negatively or positively (Khuong and An, 2016). Therefore, if the impact of external events on people is mild, people-centered, and development-oriented, they will have continuous favorable influences on the entrepreneurial intention and behavior.

There are no studies on the different entrepreneurial states of maintaining entrepreneurship and entrepreneurship after land loss (Xie et al., 2020). Also, there is no study on the effects of suburban farmer psychological states on their entrepreneurship in the process of in situ urbanization. As such, this study aims to investigate the effect of suburban youth’s psychological states during in situ urbanization on maintaining businesses and starting businesses after land loss of the land-lost farmers with a case study of villages in Liaoning Province of low–medium development regions in China.

We develop a conceptual model to explore the relationship between the in situ urbanization pattern in suburbs and entrepreneurship and the sustainability of entrepreneurship of the land-lost farmers, which can be found in Figure 1.

FIGURE 1

FIGURE 1. Conceptual model for sustainable entrepreneurship of land-lost farmers.

As the conceptual model shown, in the context of China’s new urbanization strategy and urban–rural integration development strategy, the pattern of suburban urbanization has changed. The two suburban villages we investigated have adopted the in situ urbanization pattern, which is different from “passively being upstairs urbanization.” Under the new urbanization in suburbs, the policy supply of the city government has also changed to becoming citizens naturally and progressively by means of promoting land-lost farmer development. Doing this makes urbanization an external event and a positive event to promote entrepreneurship of the land-lost farmers in suburban areas.

Its intrinsic mechanism is that the psychological states of the land-lost farmers are more stable and better than the tradition suburban urbanization, including being offered more favorable policies of land-lost compensation featuring gradual justice and rationality and more public services aimed at promoting the integration development of urban and suburban areas. This stimulates and improves the perception of desirability and feasibility of the land-lost farmers in the suburbs to maintain or start their own businesses, which promotes maintenance and formation of entrepreneurial intentions. In the process of natural and gradual suburban urbanization, assuming other factors being unchanged and referring to existing studies (Audet, 2002), we can believe that these entrepreneurial intentions maintained and stimulated can be transformed into sustainable entrepreneurship and generating new entrepreneurship, which will be verified in the empirical analysis of this article. Based on this model, we will propose the hypotheses in the following part.

Research Hypotheses

Degree of Satisfaction for Compensation and Suburban Youth Entrepreneurship

Capitalization of compensation of land expropriation is a way to solve the long-term income and living source of farmers whose land is expropriated. There are two ways: individual capitalization and collective capitalization. Collective capitalization of land expropriation compensation applies to areas with strong rural collective economic strength and low risk and stable income investment projects (Li, 2013; Wu et al., 2019). However, for the general county suburbs in the underdeveloped areas of China, it is a more appropriate choice for individuals to make land acquisition compensation as capital to earn income and life security through entrepreneurship because the rural collective economy is undeveloped. In the in situ urbanization pattern, the amount and degree of satisfaction of land-lost compensation are an important support to ensure the entrepreneurial sustainability of young farmers who have started businesses before land loss or to provide necessary financial capital for them to start businesses after land loss.

As a common county of the undeveloped area in China, the land acquisition resettlement of the two suburban villages was mainly monetary compensation. The average compensation standard for each mu (1/15 ha) lost within 3 years, 3–5 years, 5–10 years, and 10–20 years ago was RMB 92,900 yuan, 71,500 yuan, 46,000 yuan, and 42,000 yuan, respectively. In 228 suburban youth, the proportion of “quite satisfied” and “relatively satisfied” accounted for 33.92%; the shorter the time lost, the higher the satisfaction. Therefore, research hypothesis 1 is proposed:

H1. Satisfaction degree of land expropriation has a positive effect on suburban youth entrepreneurship.

Cognition of “Being a Farmer Is Better” or “Being a Citizen Is a Better” and Suburban Youth Entrepreneurship

Although a considerable proportion of suburban youth think “being a citizen is better " because of realizing that city life is a more convenient, modern, and guaranteed way of life than rural life, traditional suburban urbanization of obtaining urban household registration and “passively being concentrated upstairs” during the shift from rural living space to the modern urban residential space, life scenes, and their social roles, dramatic changes have taken place, and the original production and lifestyle needs to be integrated with the modern urban lifestyle, and a new social relationship needs to be rebuilt (Karsten, 2003; Zhao, 2015). The original entrepreneurs in the new production and living environment may have difficulty in finding the right way to start a business, and the new entrepreneurs may have to first adapt to the changes in the production and living environment to delay starting a business, which affects the sustainability of entrepreneurial behavior.

The survey finds that 43.10% of suburban youth think “I cannot tell you they are all good.” More people think it is better to be a citizen (37.99%) than a farmer (18.97%). It is noteworthy that the statistical findings show that the cognition of “being a farmer is better” or “being a citizen is better” is correlated with the entrepreneurial behavior. The entrepreneurial proportion of suburban youth who think “being a farmer is better” is the highest (36.36%) (Chi2 significance level is 0.084), and the correlation with entrepreneurship after land loss is higher (Chi2 significance level is 0.026). Further statistics find that “low consumption/low life pressure” is the most chosen reason (63.63%), “more convenient neighborhood communication/free life” ranks second (61.36%), and “better air in the rural areas” accounts for 31.82%. It is shown that in the process of in situ urbanization, the relaxed, free, harmonious, and natural production and living environment of the original village is the most important for suburban youth. Therefore, “being a farmer is better” means being able to “live in peace” with “nostalgia” (52.36%) of them have improved living conditions and pursue the “happy work” mode of “being a boss” in a familiar environment. Therefore, hypothesis 2 is proposed:

H2. Cognition of “Being a farmer is better” has a positive effect on suburban youth entrepreneurship.

Judgment of Future Life and Entrepreneurship of Suburban Youth

Some scholars believe that entrepreneur psychological capital, such as self-efficacy, optimism, hope, and resilience, is significantly positively correlated with entrepreneurial tendency (Luthans et al., 2004; Mao et al., 2021). Youth in suburban areas who “think life will be better in the future” tend to be optimistic and aggressive in the process of starting a business, increasing the probability of success and stability of the business. This judgment of future life cannot be separated from the goal of China’s new people-centered urbanization, which provides new opportunities for in situ urbanization of land-lost farmers in suburban areas (Wang et al., 2019).

First of all, the “marginalization” of suburban communities returns to the “harmonious symbiosis” between suburban communities and urban areas. For example, in recent years, promoted by the all-for-one tourism strategy, the tourism industry and related industries in Xingcheng have been developing well. The two suburban villages actively serve urban development, undertake urban spillover, and meet the demands of urban consumption around the suburban community’s functional orientation.

Second, the process of free flow and equal exchange of urban and rural factors of production is accelerating. In August 2019, amendments were made to The Land Administration Law of the People’s Republic of China for perfecting the land expropriation procedures, compensating according to the area of comprehensive land price, removing the barriers of rural collective profit-oriented construction land entering markets, promoting the suburban land-lost farmers in situ urbanization through providing development space, and inspiring entrepreneurial energy.

Third, in the context of urban–rural integrated development, the realization of equal basic public services for urban and rural residents will greatly improve the sense of gain, happiness, and security of the suburban land-lost farmers during in situ urbanization. Thus, land-lost farmers in the suburbs are full of confidence and expectation for the future of urban–rural integrated and homogeneous development. Therefore, research hypothesis 3 is proposed:

H3. The judgment that life will be better in the future and will positively affect the entrepreneurship of suburban youth.

Study Design

Case Context

Xingcheng belongs to Huludao City of Liaoning Province and is a county-level city. In 2020, the per capita disposable income of China’s national level reported is RMB 35,128, while in Liaoning Province, it is RMB 35,112. In 2020, the per capita disposable income of rural residents in Liaoning Province, Huludao City, and Xingcheng City was reported as RMB 17,450 yuan, 14,862 yuan, and 15,395 yuan, respectively, where Huludao city was showing 14.83% lower than the provincial level in comparison to Liaoning province. Due to the Xingcheng’s geographical location advantage of being the coastal city, the per capita disposable income of rural residents in Xingcheng is 3.59% higher than that of Huludao City. The selection of two suburban villages can represent the status quo of urbanization of urban–suburban integrated villages in China’s low–medium development level regions.

The data were collected through questionnaire survey by research students in December 2017 and July 2018 in Sijia Village and Diaoyutai Village, where the farmers lost their lands in Xingcheng city, Liaoning Province. The respondents were land-lost farmers with agricultural restricted permanent residence with age above 18 years. The study is based on the responses of 228 respondents.

Variables, Models, and Methods

Generally, entrepreneurship can be understood as the process of perceiving the opportunity, integrating resources, and establishing a new company (Sexton and Bowman, 1985). Entrepreneurship is a complicated concept that has no indisputable standard definition (Bao et al., 2020). For example, a study defined the land-lost farmer entrepreneurship as being concentrated in the service industry (Bao and Peng, 2016). Based on the employment characteristics of rural residents in the suburbs in this region, this study defines entrepreneurship as mainly engaging in self-employment, a private enterprise, breeding, and fishery. Entrepreneurship states are divided into maintaining entrepreneurship and getting involved in entrepreneurship after land loss. Independent variables are three variables relating to in situ urbanization, including the degree of satisfaction of land expropriation compensation, the cognition of “being a farmer is better” or “being a citizen is better,” and the judgment of future life. Controlled variables encompass village, gender, age, human capital, social capital, and family economic conditions in the village before land loss. The variable assignment is shown in Table 1.

TABLE 1

TABLE 1. Definitions and assignment of independent and dependent variables.

Since the dependent variable that represents entrepreneurship in this study is a dichotomous category variable, therefore the logistic model is adopted.

$Enterprentureshi{p}_i=in situ urbanizatio{n}_i{\beta }_i+Z_i\theta +{\epsilon }_j,$

where entrepreneurship refers to whether suburban youth start their own business and in situ urbanization refers to the three psychological variables of suburban youth in the process of in situ urbanization. They are the degree of satisfaction of land expropriation compensation; the cognition of “being a farmer is better” or “being a citizen is better,” and the judgment of future life. Z is used for controlled variables including village, gender, age, states of health, degree of education, skill, friend’s quantity after land loss, and family’s economic level before land loss. ℇ is the random disturbance term.

In the follow-up in-depth investigation of the effects of the three variables on different entrepreneurial states, the dependent variable is divided into three types: maintaining entrepreneurship, entrepreneurship after land loss, and other employment forms, which are suitable for regression analysis by the Mlogit model. In the Mlogit model, the dependent variable is set as j kinds of mutually exclusive choices, and the random utility that the ith individual can bring by choosing the jth behavior is assumed to be

$U_{ij}=x_i{\beta }_j+{\epsilon }_{ij}\left(i=1,\mathrm{...},n;j=1,\mathrm{...},J\right).$

The MLogit model probability density function can be written as follows:

$q=\left(y_i=j|x=\{\begin{array}{l}\frac{exp\left(x_i{\beta }_j\right)}{1+{\Sigma }_{k=2}^{J}exp\left(x_i{\beta }_k\right)}\left(j=2,\dots ,J\right)\\ \frac{1}{1++{\Sigma }_{k=2}^{J}exp\left(x_i{\beta }_k\right)}\end{array}\right).$

“Other” type in entrepreneurial states is the benchmark category for comparison. Both the regression results are presented in the form of relative reporting ratio (Van Holle and Bauchau, 2014).

Findings and Discussions

Entrepreneurship Profile

Thanks to Xingcheng’s favorable geographical position as a coastal city, employment channels such as swimsuit processing, family hotels, farmyards, and house rental have brought lasting vigor and vitality to the production and life of residents in the two suburban villages. The family hotel industry in Diaoyutai Village is flourishing, with more than 1/4 of the village households engaged in the family hotel industry. The residents of Sijia Village are mainly engaged in street shop operations around the life service industry and fishery-related service industry (such as freezing, storage, and odd jobs related to fishing). Some farmers are also engaged in swimsuit processing, family hotel, and house rental. In addition, all the villagers of Sijia Village can share development benefits from the village collective economy, keeping pace with the times.

To deeply understand the employment situation of the land-lost farmers in suburban areas, 228 land-lost farmers aged between 18 and 50 were analyzed for their entrepreneurial status. Among them, Sijia Village and Diaoyutai Village accounted for 55.26 and 44.74%, respectively. The proportion of males and females was 53.95 and 46.05%, respectively, in both the villages.

According to the statistics in Table 1, among 228 youth who lost their lands, the proportion of being unemployed after land loss is more than that before losing their land. Among the unemployed after losing their land, 18 of them lost their jobs due to loss of land. There was little change in the proportion of part-time jobs, the proportion of hired jobs increased by 36.84%, and the proportion of self-employed rose by 52.66%. After land loss, the non-agricultural employment rate of youth was 83.33% Table 2.

TABLE 2

TABLE 2. Overall employment situation of youth in the two villages before and after land loss.

From the perspective of employment sustainability before and after land loss, the implementation of in situ urbanization pattern has little impact on the production and life of the land-lost farmers in the two villages. According to statistics, 94.74% (54/57) of the groups engaged in hired jobs kept their being hired status after the land loss, while 88.89% (32/36) of the groups engaged in being self-employed kept their self-employed status. Among the 55 entrepreneurs (see Table 3), 58.18% (32/55) and 41.82% (23/55) of the land-lost farmers maintain entrepreneurship and start new businesses, respectively. Entrepreneurship accounted for 24.12% (55/228) of the sample (see Table 4).

TABLE 3

TABLE 3. Original occupation of the current entrepreneurs.

TABLE 4

TABLE 4. Overall changes in employment before and after land loss.

Analysis of Regression Results

Effects of In Situ Urbanization on Youth Entrepreneurship in Suburban Areas

To investigate the robustness of the three independent variables to the dependent variable, all these were successively added into regression Model 1. It can be seen from Model 2, Model 3, and Model 4 that the three variables have robust and significant influence in Table 5. Models 2–4 show that 1) the entrepreneurial probability of suburban youth who are “quite satisfied/satisfied” with land expropriation compensation is 2.051 times that of “general/dissatisfied/quite dissatisfied”, and the significance level of coefficient and regression equation is high. After the addition of the other two independent variables, the coefficient has a small change and a stable significance level. 2) The entrepreneurial probability of suburban youth, who think being a farmer is better, is 2.109 times that of those who think being a citizen is better and those who cannot tell clearly. After the addition of another independent variable, the coefficient and significance level are improved. 3) The entrepreneurial probability of those who think “life will be better in the future” is 1.927 times that of those who think “life will not change/will get worse.” Therefore, the three hypotheses mentioned previously have been verified. 4) From the influence of controlled variables, especially, the probability of starting a business is 2.226 times that of those whose family’s economic level before the land loss is “very good” than that for those whose family’s economic level before a land loss is “general,” “poor,” or in need of relief.” The effect is stable after adding other variables.

TABLE 5

TABLE 5. Logistic regression results of the impact of in situ urbanization on suburban youth entrepreneurship (n = 228).

Furthermore, this study finds that the entrepreneurial probability of suburban youth with junior high school and below is higher and the impact is significant. That is to say, suburban youth with higher education level do not necessarily have a higher entrepreneurial probability because the education level of suburban youth of China’s underdeveloped areas is biased. Among the 228 young people, 82.02% of them have junior high school education or less.

Further Findings: The Mediating Effect of “Land Expropriation Compensation Satisfaction"

It is worth noting that in the regression analysis, it is found that the probability of “believing that their future life will be better” of the suburban youth who are “quite satisfied/quite satisfied” with land expropriation compensation is 2.657 times that of those who are “not satisfied/quite satisfied”. When other variables are controlled and the variable of “thinking that life will be better in the future” is added, this variable has a significant effect on entrepreneurship, but the relative reporting ratio of the variable of the degree land expropriation compensation on entrepreneurship decreases to 2.162, and the significance level is reduced (see Table 6). The results show that the variable of the degree of satisfaction of land expropriation compensation can affect suburban youth’s entrepreneurship by influencing their judgment of future life, and the variable is a mediation variable, which reflects a partial mediation effect.

TABLE 6

TABLE 6. Regression analysis of the mediating effect of the degree of satisfaction of land expropriation compensation on the judgment of future life.

Effects of In Situ Urbanization on Different Entrepreneurial States of Suburban Youth

To further investigate the influence of the variables of in situ urbanization on the entrepreneurship of suburban youth, the Mlogit model is used to analyze the effects of the degree of satisfaction of land expropriation compensation, the cognition of “being a farmer is better” or “being a citizen is better,” and the judgment of future life on “maintaining entrepreneurship” and “starting a business after losing land” (see Table 7). The results show that there are differences in the effects of the variables of in situ urbanization on different entrepreneurial status of land-lost youth in suburban areas. 1) The influence of the variables of the degree of satisfaction of land compensation has little change on the whole, but the influence on “starting a business after losing a land” is higher than that of “maintaining a business,” and the two significance levels have decreased by more than 10%. 2) The cognition of “being a farmer is better” or “being a citizen is better” is mainly reflected in the influence on those who “start their own business after losing their land.” The regression ratio is more than three times that of “maintaining their own business,” and the significance level is higher than that of Model 4, which is significant at a level below 1%. 3) The influence of the variables of the judgment of future life on the entrepreneurship of suburban youth is mainly reflected in the group of “maintaining entrepreneurship.” 4) From the influence of controlled variables, the influence of “more friends after losing land” on “entrepreneurship after losing land” is stronger than that of “maintaining entrepreneurship. The influence of the economic level of the family in the village before land loss on entrepreneurship of the suburban youth is reflected in the group of “maintaining entrepreneurship.” Also, the degree and significance of the effects of junior high school and below the suburban youth entrepreneurship areas mainly reflected in maintaining entrepreneurship.

TABLE 7

TABLE 7. Mlogit regression results of the impact of in situ urbanization on entrepreneurship states (n = 228).

Conclusions

The acceleration of China’s human-centered and new urbanization and urban–rural integration development has provided opportunities for suburban in situ urbanization. This study applies questionnaire survey data from two suburban villages in a county-level city in Liaoning Province of low–medium development regions in China to investigate the influences of three psychological states on suburban youth entrepreneurship under the background of in situ urbanization. The main conclusions are as follows:

1) The gradual rationality and justice of land expropriation compensation is not only a practical proof of equal exchange of the suburban land and urban elements but also a necessary financial capital for farmers in the suburbs to earn income and ensure their livelihood through entrepreneurship. In addition, the satisfaction degree of land expropriation compensation will increase the suburban farmer support and trust in the suburban community, city government, and relevant national policies to have confidence and expectation for future life in the state of in situ urbanization and indirectly provide psychological capital support for entrepreneurship.

2) Suburban youth who think “being a farmer is better” pay more attention to the relaxed, free, harmonious, and natural production and living environment of the original village. Suburban in situ urbanization has adapted to the demand for a social environment for entrepreneurship of suburban youth, and when other entrepreneurial conditions are available, they do not need to face dramatic changes in life scenes and social roles and are able to start a business after land loss in a familiar environment, the pursuit of “being my own boss,” thus realizing and promoting sustainable entrepreneurship of the suburban community.

3) Under the background of urban and rural integration development and human-centered new urbanization, as China provides more equal basic public services to urban and rural residents, suburban “new citizens” or “quasi-citizens” have enjoyed more equal treatments and services such as employment, housing, education, pensions, medical treatment, infrastructure, and public service, which makes them fully confident about the future of suburban development, and that has inspired sustainable entrepreneurial enthusiasm.

The in situ urbanization pattern the two suburban villages we investigated have adopted is natural and gradual suburban urbanization, not “passively being upstairs urbanization.” Entrepreneurial practice of the youth in two suburban villages in the pattern of in situ urbanization in low–medium development regions of China shows that the in situ urbanization provides a stable and better production and living environment for youth in suburban villages so as to promote them to “maintain entrepreneurship” and “start businesses after land loss.” This not only ensures the sustainable livelihood of the land-lost farmers in the suburbs through sustainable entrepreneurship but also promotes the sustainable development of urbanization in the suburbs, thus promoting the economic development of the suburbs and their cities (Sun et al., 2020).

Solutions and Suggestions

To some extent, the research of this article confirms that in situ urbanization in the suburbs is a new urbanization pattern that can promote the sustainable entrepreneurship of land-lost farmers in the suburbs. Therefore, the following solutions and suggestions are put forward.

First, farmers are the main body of China’s urbanization process and rural revitalization strategy, so we should respect the wishes of farmers and follow the trend (Van Den Berg et al., 2006; Bao and Peng, 2016; Peng, 2016)). To break the traditional suburban urbanization pattern of “one size fits all” featuring “passively concentrated being upstairs” and to choose the appropriate urbanization pattern according to local conditions and times change, which are the correct concepts that all levels of urban governments and suburban communities should uphold to deal with the urbanization problem of land-lost farmers in suburban areas.

Second, urban governments and suburban communities should strictly implement the principles of land expropriation compensation stated by the central government to ensure farmers’ livelihood, expropriation according to procedures, and compensation according to the comprehensive land price of each district so that fair and reasonable land expropriation compensation becomes financial capital guarantee for suburban residents to start their own businesses and maintain their own businesses after land loss.

Third, governments should adhere to the clear positioning of suburban integrated villages and realize the significance of the suburban urbanization pattern that “retains the rural style.” Governments at all levels should continue to strengthen urban and rural residents’ equal basic public services, let the suburban “new citizens” or “quasi citizens” enjoy equal treatments and services, achieve better development of the production and living, and let the suburban “become citizens” with “keeping nostalgia.”

Fourth, urban governments should make full use of the favorable opportunity of “urban elements going to countryside,” attract urban and rural elements to gather in the suburbs, and actively develop collective economy of suburban communities (villages); integrate urban–suburban industries to develop characteristic industries in the suburban areas, stimulate economic vitality in the suburban areas, and create opportunities for land-lost farmers in suburban areas to start businesses.

Fifth, the government of China should revisit its urbanization transformation on periodic basis to catch the ongoing dynamics that happen with the passage of time. This will encourage the residents to think for expansion and observe more dynamism in their pattern of business practices.

Future Directions

Future study would be meaningful if we carry out a comparative study on land-lost farmers’ entrepreneurship in suburban areas under different urbanization patterns in the same city and expand the number of samples, which will better highlight the research findings of this article. Also, a new study will be needed if comparing the same variables in two low–middle developed-level cities rather than two villages to find the magnitude of difference in the entrepreneurs who lost their land due to expropriation of land in China. The cases of two countries such as India and China will also be a good addition to the body of literature.

Data Availability Statement

The raw data supporting the conclusions of this article will be made available by the authors, without undue reservation.

Ethics Statement

Ethics review and approval/written informed consent was not required as per local legislation and institutional requirements.

Author Contributions

QH: writing—review, conceptualization, data curation, and editing. AR: methodology, visualization, supervision, and editing. MZ: visualization, data curation, and writing the original draft. IU: review and editing.

Funding

The author is grateful for the financial support from the Project of the Educational Department of Liaoning Province (Project#20-A845) and the Social Science Planning Fund Project of Liaoning Province (Project#L18BSH006).

Conflict of Interest

The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

Publisher’s Note

All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors, and the reviewers. Any product that may be evaluated in this article, or claim that may be made by its manufacturer, is not guaranteed or endorsed by the publisher.

Acknowledgments

The author is grateful for the financial support from the Project of the Educational Department of Liaoning Province (Project#20-A845) and Social Science Planning Fund Project of Liaoning Province (Project#L18BSH006). The authors would like to extend our gratitude to Professor Han Jia Bin for his warm encouragement and support.

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