Institutional environments, entrepreneurship motivation and entrepreneurial decision: the China experience

In this paper, we analyse the entrepreneurial decision of listing of a Chinese company on a foreign stock exchange. We find that the decision to list on a foreign stock exchange is driven not only by short-term financial considerations (liquidity, costs of capital), most of which have been abundantly examined in prior literature, but also by entrepreneurial long-term strategy considerations. This long-term engagement is described as entrepreneurial signalling in prior studies. Furthermore, we take account of the influences the external institutional environment has on entrepreneurs' business decision making, as it aids the development of economic/political institutional theory. By comparing the Chinese mainland entrepreneurial firms listing on the NASDAQ with those choosing the domestic listing, the newly born ChiNext, we provide empirical evidence supporting our hypotheses.