Entrepreneurial Activities In China Research Articles

Dynamic effects of path dependence on regional entrepreneurship in transitional China

ABSTRACT Previous studies fall short when explaining the determinants of regional entrepreneurship in an unstable environment from a dynamic perspective. This study investigates the dynamic feedback effects of path dependence on the regional entrepreneurial activities in China. Using a sample of panel data related to 47,515,084 enterprises from 2000 to 2018, we estimate a set of panel models analyzing the effects of dynamic increasing returns and formal and informal institutional hysteresis on the new firm formation in Chinese cities. Our results provide evidence of positive relationships between peer effects from past entrepreneurial activities, past FDI and government intervention as well as the historical environment of the proportion of foreign-funded enterprises and SOEs in 1989 with the start-up rates. This study on regional entrepreneurship in the Chinese context develops a broader understanding of entrepreneurship in transition economies.

Entrepreneurial failure influences the health of Chinese farmers: Evidence from the data of China labor-force dynamic survey

High failure rate is a primary characteristic of current farmer entrepreneurial activities in China. We examined the impact of entrepreneurial failure on the health of Chinese farmers based on the data from the China Labor-force Dynamics Survey (CLDS). We found that entrepreneurial failure significantly depresses the health of Chinese farmers. Specifically, the farmers with entrepreneurial failure experience are more likely to have low self-reported levels of psychological and physical health, and the probability of experiencing severe injury and illness is elevated by 4.6 %. Mechanism analysis shows that entrepreneurial failure depresses the health of Chinese farmers through weakening informal social support and increasing the probability of overwork. Furthermore, these effects are more significant in the older generation of farmers who were born before 1980 and the farmers striving to make a living.

Digital economy, government intellectual property protection, and entrepreneurial activity in China

ABSTRACT This study aims to explore the relationship between the digital economy and entrepreneurial activity from the perspective of government intellectual property protection. Based on data of 191 Chinese prefectural-and-above (PAA) level cities from 2015 to 2020, this empirical study conducts hierarchical regressions and spatial econometric analysis. The results show that the digital economy positively influences entrepreneurial activity. Meanwhile, the digital economy makes entrepreneurial activity show inter-city spatial dependence. Besides, government intellectual property protection plays a mediating role between the digital economy and entrepreneurial activity. Further, heterogeneity analysis shows that maintaining a high level of digital economic development and high-standard government intellectual property protection will be conducive to cities’ innovation and entrepreneurship.

Social Capital and Self-Employment Dynamics in China

Opportunity-driven entrepreneurship can stimulate economic growth and foster technology innovation, while subsistence-driven self-employment can have the opposite effect. In China, a country with a typical relational society and a middle-income status, the nature of nonagricultural self-employment remains contentious. Examining the influence of social capital on entrepreneurial activities can provide insight into the nature of entrepreneurial activities in China, although this issue has received relatively little attention in the literature. To address this gap, this study employs multivariate discrete choice modeling on national representative samples from the China Family Panel Studies dataset to assess the relationship between social capital and entrepreneurship dynamics. The results indicate that relational, structural, and cognitive social capital all affect entrepreneurial dynamics, and these effects vary between urban and rural areas. Individuals who are less likely to be members of an organization, who are less conscientious, and who have low levels of trust and gift expenses are more likely to become self-employed. Conversely, people with high trust, strong conscientiousness, and low social status are more likely to exit self-employment. In addition, individuals with lower levels of human capital are more likely to both enter and exit self-employment. These findings suggest that self-employment tends to be subsistence-driven in China, which has implications for policymakers seeking to promote opportunity-driven entrepreneurial activities.

The impact of digital government policy on entrepreneurial activity in China

Digitalization of government is a crucial strategy for enhancing national competitiveness and improving public services in numerous countries. This study introduced a quasi-natural experiment in China to evaluate the impact of a country’s digital government policy on entrepreneurship. Using city-level data and regression analysis, we find that implementing the policy increases the number of newly registered firms by 0.0028 per 10,000 working-age labours. The study also examines potential mechanisms for this effect and finds evidence that the policy improves government efficiency, reduces risk-seeking behaviours of local government, and promotes access to financial resources. This study’s findings contribute to research on digital government initiatives in developing countries and can inform future policy decisions.

Air pollution and entrepreneurship: evidence from China

ABSTRACT Air pollution has become a major danger to human health and a hindrance to social and economic growth. This study endeavours to examine the impact of air pollution on entrepreneurial activities in China. Using registration data from 2000 to 2018, we find that severe air pollution can decrease the number of newly registered firms by about 36%, suggesting a negative effect on entrepreneurship. To strengthen the causal inference, we adopt the two-stage least square method to address the potential endogenous problems. The result is robust to different model settings and alternative measurements of air pollution. The study further delves into the mechanisms through which air pollution affects entrepreneurial activities, including brain drain, social capital, startup costs, and financial constraints. This study recommends effective environmental regulation policies to improve air quality as well as increase the attraction of mobile factors to alleviate the adverse impacts of air pollution on entrepreneurial activities.

Product Market Risk, Financial Development and Firm Creation Along the Supply Chain

We study the effects of product market risk on entrepreneurial activities in China, using a favorable change in U.S. trade policy as a plausibly exogenous shock. We do not find an increase in entry rates for domestic firms in exposed industry. However, for upstream suppliers, entry rates increase significantly in undeveloped cities, but decrease in developed cities. We also find that domestic entrepreneurs in undeveloped areas are more likely to enter the upstream industry by exporting following the shock. Our results suggest that the product market shock only increases domestic firm formation in China at one remove along the supply chain.

Examining conditions for successful entrepreneurship in China's firms

We examine the question of what factors might be likely to increase the probability of success for entrepreneurial activity by FIEs and domestic firms in China. We first examine the possibility of there being a distinct and separate notion of Chinese entrepreneurship but find that unlikely. The issue then becomes what contextual factors may be necessary to enable entrepreneurial activity in China to flourish and we locate four such factors. We acknowledge that our posited set of necessary factors is probably not a sufficient set but they are at the minimum a useful starting point.

Who Benefits from the Decline of American Manufacturing? Evidence from 142,663 Foreign and Domestic Entries in China

We study the effects of globalization on entrepreneurial activities in China, using a favorable change in U.S. trade policy as a plausibly exogenous shock. We find that domestic entrepreneurs in exposed industries benefit more from the shock in financially-developed areas and areas dominated by large businesses. In undeveloped areas, however, the shock generates new local suppliers in upstream industries. Large and foreign entrants are more responsive to the shock than small local entrepreneurs, especially in undeveloped areas. Our results suggest that how globalization affects entrepreneurs in emerging markets depends on local conditions and production network structure.

Credit accessibility, institutional deficiency and entrepreneurship in China

Using a brand new data, we document seriously low credit accessibility from financial institutes for small and micro enterprises (SMEs) and examine whether and how it affects entrepreneurial activity in China. We find that credit constraints significantly decrease the possibility of households becoming entrepreneurs. Based on our estimates, 10% decrease in the probability of being credit constrained would be associated with 4.3 million newly-created household businesses, or equivalently 11 million jobs. In the end, factors that determine credit accessibility are exploited and the result indicates that institutional deficiency plays a role in shaping the pattern of financing difficulties in China. Specifically, we find households in regions with more commercialized banking or those with government-sector workers are more likely to access to credit when other relevant variables are conditioned. In particular, the positive role of government-sector workers is more pronounced in regions with weaker market institutions.

Public Policy Environment and Entrepreneurial Activities: Evidence from China

AbstractWhat determines the effectiveness of government entrepreneurship policies on the regional development of entrepreneurial activities in China? Using panel data analysis, this study develops a comprehensive framework that examines the effects of various factors, including government efficiency and government support for business, finance and technology, on facilitating the creation of new ventures. Based on provincial data collected between 2009 and 2014, we find that the level of infrastructure development, government incubators and venture capital‐guided funds have positive and significant effects on entrepreneurial activities. The findings of our study suggest that local government efficiency is a fundamental precondition for entrepreneurship policies to effectively boost the regional economy.

The Relationship between Creativity and Entrepreneurial Intention: A Moderated Mediating Effect Model

Entrepreneurship is a kind of highly creative value creation activity, and active creative thinking is a significant feature of entrepreneurs. A high degree of entrepreneurial intention is the prerequisite for undertaking entrepreneurial activities. In recent years, some studies have started to focus on the impact of creativity on individual entrepreneurial intention. At the same time, the recognition of entrepreneurial opportunities has always been the core issue in the study of entrepreneurship, and has a positive impact on entrepreneurial willingness as well. Creativity reflects the ability of building new connections between things, and opportunity recognition also requires potential entrepreneurs to find out the relationship between concepts in confusing information. We need to further explore the nexus between creativity and opportunity recognition and how they affect individual willingness to create new businesses. It cannot be ignored that a fear of failure, as a psychological factor that hinders individual entrepreneurship, may have a certain inhibitory effect on the emergence of entrepreneurial intention. Especially for potential young entrepreneurs, the high failure costs and opportunity cost may discourage them from pursuing entrepreneurship. Taking college students as an example, they are the new force of entrepreneurial activities in China due to their rich knowledge, active thinking and entrepreneurial passion. However, the rate of self-employment of university graduates in China is much lower than that of developed countries. Based on this situation, we investigate 405 college students to explore the relationship between creativity, opportunity recognition, a fear of failure and entrepreneurial intention by constructing a moderated mediating effect model. The questionnaire is used to obtain the data in this paper. After testing the reliability, validity and common method deviation of the samples, the hypotheses are verified. The results of empirical analysis show that individual creativity has a positive impact on his entrepreneurial intention. Opportunity recognition plays a mediating role in the promotion mechanism of creativity on entrepreneurial intention; a fear of failure plays a negative moderation role in the relationship between opportunity recognition and entrepreneurial intention, namely a fear of failure weakens the promotion effect of opportunity recognition on entrepreneurial intention. Furthermore, a fear of failure moderates the partial mediating role of opportunity recognition in the relationship between creativity and entrepreneurial intention. The higher the level of a fear of failure is, the weaker the mediating effect of opportunity recognition is. This paper has some theoretical significance. Firstly, this paper helps us to explore the role of creativity from a cognitive perspective and further broadens the research on the factors affecting entrepreneurial intention. Secondly, the findings show that individual creativity and opportunity recognition are two similar but different constructs in the field of entrepreneurship. Creativity provides cognitive foundation for opportunity recognition, while the latter is a key extrinsic ability of the former. The results also prove that creativity can be regarded as one’s valuable raw material” as some previous studies have pointed out, which can promote entrepreneurial intention by enhancing individual entrepreneurial knowledge and skills. Thirdly, we discuss the moderating effect of a fear of failure in the process of transforming creativity into entrepreneurial intention. It also proves that the Performance Failure Appraisal Inventory” is suitable for Chinese context and provides instrumental support for future research. The findings have some practical significance to promoting college students to start a business. On the one hand, we should pay attention to the cultivation of college students’ creativity and set it as an important part of entrepreneurship education. On the other hand, it is necessary to improve the policies on promoting the entrepreneurship of university students constantly, create reasonable guarantee for undertaking entrepreneurship and reduce the failure cost. By providing favorable external environment, we can help young entrepreneurs to weaken the fear of entrepreneurial failure and understand entrepreneurship objectively. As a result, they can evaluate entrepreneurial opportunities accurately and enhance their own entrepreneurial intentions.

Future Entrepreneurship Education for Students in China

Due to the increasing needs of entrepreneurial activities in China, entrepreneurship education is becoming one of the most important topics for university students. This project reviews the current situation of Chinese entrepreneurship education and problems that exist. We focus on factors that influence the appropriateness of entrepreneurship studies to the needs and expectations of university students in China. We aim at discovering how to improve the entrepreneurial traits and business needs of the students from entrepreneurship studies. We aim at highlight the disparity between the supply and the expectations from entrepreneurship programmes in Chinese universities. Furthermore, we will compare the entrepreneurial traits of Israeli students and Chinese students in order to find out the similarities and differences. We will improve the Chinese future entrepreneurship education by learning the theories and practices from Israeli entrepreneurship education. Our final goal of this project is to apply entrepreneurship education in general to different filed students.

The Research on Entrepreneurship Transformation and Employment Effects

Entrepreneurship has become one of the most important way to nourish economic growth and enhance employment. Entrepreneurship can be classified as necessity entrepreneurship and opportunity entrepreneurship from the perspective of the entrepreneurs’ subjective motivation. The development trend of entrepreneurship shows that the entrepreneurial activities in China are changing from necessity to opportunity. Opportunity entrepreneurship can break the old employment pattern of one person one position and establish the employment pattern of one person leading a group of positions. Under the entrepreneurial activities situation of China, developing opportunity entrepreneurship, optimizing entrepreneurship environment, widening entrepreneurship finance channel, reinforcing entrepreneurship education and providing pioneering enterprise with hatchibator will promote social employment and increase the employment quality.

Strategic orientation and performance of new ventures: empirical studies based on entrepreneurial activities in China

The purpose of this paper is to investigate the relationship between the strategic orientation and performance of new ventures. Based on organizational ambidexterity theory, we formed five hypotheses to describe the relationships among entrepreneurial orientation, market orientation, and technological orientation, as well as their impact on new venture performance. Using a sampling of 199 new ventures, the regression results reveal that exploration-entrepreneurial orientation and exploitation–technological orientation have a significant impact on entrepreneurial performance, whereas exploitation–market orientation does not. Interaction between entrepreneurial orientation and technological orientation shows a significant positive impact on entrepreneurial performance.

The Externalities of Corruption: Evidence from Entrepreneurial Activity in China

We show that corruption affects negatively the performance of small and young firms, which compete with corrupted industry peers in the product market or with corrupted firms in the same province for resources. We exploit the Chinese anti-corruption movement to establish causality and identify the channels through which corruption causes negative externalities. Small and young firms have lower sales growth in industries and provinces with high corruption, arguably because demand is diverted to the largest firms in their industries, which spend more in corrupting officials. Small and young firms also have higher financing costs in industries and provinces with high corruption and therefore invest less. Furthermore, corruption decreases the efficiency of labor and capital allocation and deters entry of small and young firms.

Bank financing, institutions and regional entrepreneurial activities: Evidence from China

We investigate the effects of bank financing on regional entrepreneurial activities in China. We present contrasting findings on the role of quantity vs. quality of bank financing on small business formation in China: while we document a consistent, significantly positive relationship between the quality of bank financing and new venture formation, we find that the quantity of supplied credit is insignificant. We report that formal institutions are positively correlated to regional entrepreneurial activities, and informal institutions substitute formal institutions. Our findings also reveal that the institutional environment tends to supplement bank financing in promoting regional entrepreneurial activities.

Forbes and Billionaires: A Note on the Productive and Unproductive Entrepreneurial Activities in China

This paper establishes a causal relationship between the quality of an institutional environment and the stated types of entrepreneurial activities in China. An event study on the influence of Forbes magazine’s list of China’s billionaires (the list) on the associated share prices is conducted. Our results show that a significantly positive relationship exists between the quality of an institutional environment and the tendency towards productive entrepreneurial activities.

China’s trans-regional entrepreneurship

Purpose – The purpose of this article is to analyze the supply (technology, education, labour, unemployment and real estate development) and demand (fiscal revenue and resident income) factors that influence regional entrepreneurial activity in China. Entrepreneurship develops at a rapid pace in China with significant differences among the country’s regions. Design/methodology/approach – Statistics of 31 Chinese provinces from 2005 to 2010 were collected, and an econometric model of the panel data was established. Findings – Empirical results show that technology and employment positively impact on regional entrepreneurial activity. A subsequent analysis comparing data from 2005-2008 to 2009-2010 showed that different variables on regional entrepreneurship weaken during a period of financial crisis, with technology remaining as the only significant variable across all models. Finally, the study summarizes China’s entrepreneurial activity as primarily supply-driven. Research limitations/implications – This study is limited by the data sources and index design, which may not fully capture all influences on regional entrepreneurship to determine whether an inflection point or other interaction mechanisms exist. Practical implications – The study demonstrates a differential emphasis on the impact of economic supply factors in a developing economy to positively affect entrepreneurial activities and sustained economic growth at the regional level. Conversely, it can be inferred that increased government spending during an economic crisis positively influences regional entrepreneurial activities. Originality/value – The study contributes toward the development of a theoretical framework that emphasizes the relationship between entrepreneurial activities and its regional supply and demand factors. The overall model and findings highlight technology’s importance on the development of innovation clusters that spur industrial agglomeration.

Entrepreneurial activity in China and Pakistan: a GEM data evidence

Purpose– This study aims to compare the entrepreneurial activity in China and Pakistan based on these factors: fear of failure, perceived capabilities, perceived opportunities, and knowledge of other entrepreneurs.Design/methodology/approach– The authors use the data from global entrepreneurship monitor (GEM). In this study, the authors use the cross-sectional data for survey year 2010, both for China and Pakistan. The authors employed the sequential logistic regression model in order to predict the likelihood of involvement in entrepreneurial activity.Findings– Chinese are not significantly influenced by their fear of failure to engage in entrepreneurial activity. Gender is also not a significant predictor of entrepreneurial activity in China. In Pakistan, perception of opportunities does not significantly predict whether to involve in entrepreneurial activity or not, while other factors do. Gender is a significant predictor of entrepreneurial activity in Pakistan.Originality/value– Previously literature is lacking in this kind of a unique comparison based upon GEM data evidence. There are many lessons for Pakistan in this study. There is a need to create awareness among people about the fruits of self-employment. Government should create a conducive environment for doing business. Efforts should be made to enhance the women participation in business.