The Ownership, Innovation, and Sustainable Development of Micro and Small Enterprises: Evidence of China

Abstract

This study aims to examine the impacts of ownership and innovation on the sustainable development of micro and small enterprises (MSEs). Using the dataset from the 2015 China Micro and Small Enterprise Survey, this study divides the ownership of MSEs into state ownership, collective ownership, private ownership, and foreign ownership. In this study, the sustainable development of MSEs is measured by four sets of variables, sustainable operation, sustainable profitability from operations, sustainable profit input, and sustainable production or operation input. The Result suggests negative associations between the ownership of state-owned enterprises as well as collective-owned enterprises and MSEs’ sustainable development. Furthermore, public ownership also negatively contributes to MSEs’ sustainable development. Concerning the ownership of non-public-owned enterprises, while private ownership enables MSEs to develop sustainably, foreign ownership is not conducive to MSEs’ sustainable development. Besides, the result also indicates that innovation positively contributes to the sustainable development of MSEs. Moreover, this study offers implications for policymakers to take measures in promoting reform of mixed ownership as well as innovation to enhance MSEs’ sustainable development.