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The Impact of Marketization on Entrepreneurship in China: Recent Evidence

Author

Listed:
  • Yang Zhou

    (West Virginia University, Department of Economics)

  • Joshua C. Hall

    (West Virginia University, Department of Economics)

Abstract

While marketization has been linked to provincial-level economic growth in China, how marketization leads to growth has not been explored. We hypothesize that marketization creates an environment that encourages entrepreneurship, which manifests itself in economic growth. While this argument is not new, it has not been explored in the Chinese context. We fill this gap by empirically testing the relationship between marketization and measures of entrepreneurship across Chinese provinces. Our primary measures of entrepreneurship are level changes in the number of "private enterprises" and "self-employed individuals". We find that higher levels of marketization are positively related to higher levels of entrepreneurship. These positive effects are largely driven by three areas of marketization. "Government and market" drives both measures of entrepreneurship, while "Legal frameworks" in uences only private enterprises and "ownership structure" in uences self-employment.

Suggested Citation

  • Yang Zhou & Joshua C. Hall, 2017. "The Impact of Marketization on Entrepreneurship in China: Recent Evidence," Working Papers 17-22, Department of Economics, West Virginia University.
    • Handle: RePEc:wvu:wpaper:17-22
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    File URL: http://busecon.wvu.edu/phd_economics/pdf/17-22.pdf
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    References listed on IDEAS

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    Cited by:

    1. Shaomeng Jia & Yang Zhou, 2017. "Economic Freedom and Government Efficiency: Recent Evidence from China," Working Papers 17-26, Department of Economics, West Virginia University.
    2. Li, Renyu & Ma, Zhongxin & Chen, Xirong, 2020. "Historical market genes, marketization and economic growth in China," Economic Modelling, Elsevier, vol. 86(C), pages 327-333.
    3. Peng Bin & Xiaolan Chen & Andrea Fracasso & Chiara Tomasi, 2020. "Firm employment growth in China: The role of marketization and regional economic factors," Growth and Change, Wiley Blackwell, vol. 51(1), pages 402-439, March.

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    More about this item

    Keywords

    entrepreneurship; marketization; economic freedom; regional science; China;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • P37 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Legal

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