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Political conformity and entrepreneurship: Evidence from China

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  • Yang, Haiyan
  • Zhang, Shuyuan
  • Hu, Fang
  • Yao, Daifei Troy

Abstract

This paper investigates the effects of political conformity on entrepreneurship using a sample of Chinese privately-owned enterprises between 2010 and 2020. We find that political conformity positively affects entrepreneurship. Mechanism tests indicate that political conformity enhances entrepreneurship due to reduced resource constraints and improved interest alignment. Further, our additional analyses suggest that political conformity serves as a substitute for the weak external monitoring functions in the market, fostering the growth of entrepreneurship. This study highlights the influence of political ideology alignment on entrepreneurship, an aspect that has yet to be studied.

Suggested Citation

  • Yang, Haiyan & Zhang, Shuyuan & Hu, Fang & Yao, Daifei Troy, 2023. "Political conformity and entrepreneurship: Evidence from China," Finance Research Letters, Elsevier, vol. 58(PC).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pc:s1544612323009340
    DOI: 10.1016/j.frl.2023.104562
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    2. Wang, Jianquan & Xue, Zifan & Gong, Fan, 2024. "Examining the Mechanism of Political Knowledge on Radical Innovation Performance," Finance Research Letters, Elsevier, vol. 60(C).

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