Regional differences in the development of Chinese small and medium‐sized enterprises

Abstract

PurposeThis paper aims to investigate the patterns of and reasons for regional differences in entrepreneurship among Chinese provinces (excluding Hong Kong and Taiwan).Design/methodology/approachThe paper employs a linear regression model to examine determinants of regional entrepreneurship in China.FindingsEvidence suggests that provincial differences in entrepreneurship were directly related to local business growth, but not to factors such as level of local business development, urbanisation rate, level of market economy, level of salary and ratio of unemployment. The differences among economic growth in various regions contributed directly to differences in entrepreneurship.Research limitations/implicationsThere is a need to determine the spatial patterns of entrepreneurship by using panel data in a more sophisticated econometric model. A further investigation of regional entrepreneurship in China is planned for the near future.Practical implicationsActive entrepreneurship in a region can contribute to the economic growth of the region, leading to more active enterprising activities. It is therefore argued that one of the effective ways to boost entrepreneurship and small business development is to advance the economic growth of a region.Originality/valueThe paper adopts an industrial location perspective on determinants of business growth and its links with regional entrepreneurship.