Entrepreneurship Development and the Role of Economic Transition in Entrepreneurial Activities in China

Ying Zhang & Geert Duysters


This study aims to elaborate entrepreneurship development in China and the role of China’s economic transition in entrepreneurial activities. Besides addressing China’s institutional transition environment, which is argued as the necessary condition of entrepreneurship development and as the ‘incubator’ of three generations of entrepreneurs in China, the applied panel dataset was organized by collecting data from 31 provinces in China in recent 4 years. Our results show that China’s economic development has a significant inversed U-shaped impact on entrepreneurship development in the transitional stage from efficient-driven to innovation-driven economy. Complementary conclusions in the recent transitional stage include that education resource and regional economic openness respectively has significantly positive impact on entrepreneurship. The interactive effect of education resources and economic openness was also found significantly positive but results associated with unemployment’s impact present that unemployment executes negative impact insignificantly, which is consistent with the fact of China’s entrepreneurship development is approaching to opportunity-oriented stage in recent years.

Keywords: Entrepreneurship development, Economic development, China

JEL Code: J23, M13, O11

UNU-MERIT Working Papers ISSN 1871-9872

Download the working paper