68b7A0o20233-359 REVIEWS The development of entrepreneurship in China Jing Yu Yang·Jiatao Li ag2wac3ms Abstract In this paper,we provide an overview of the extant research on the ket trans rom late English-lan analyze them based on the research subjects,methods,and firm types.From this review,and integrating with research on market transitions,we propose a three-stage model of market transitions that has important implications for entrepreneurship research in transition economies. econom】 China is the largest transition don e J.Y.Yang(☒ Springer
REVIEWS The development of entrepreneurship in China Jing Yu Yang & Jiatao Li Published online: 12 January 2008 # Springer Science + Business Media, LLC 2008 Abstract In this paper, we provide an overview of the extant research on the development of entrepreneurship in China. This research focus is a relatively recent phenomenon since China’s market transition started from late 1978. We review the literature over the 26 years from 1980 through 2005, as published in 11 leading English-language academic journals. We identify 68 articles from this review and analyze them based on the research subjects, methods, and firm types. From this review, and integrating with research on market transitions, we propose a three-stage model of market transitions that has important implications for entrepreneurship research in transition economies. Keywords Entrepreneurship development . Market transition . China . Transition economy China is the largest transition economy in the world. After nearly three decades of sustained market transition, domestic entrepreneurial organizations, including private start-ups, township and collective enterprises, and transformed state-owned enterprises (SOEs), have emerged as one of the most important driving forces behind China’s rapid economic development. In the literature, a fundamental characteristic of entrepreneurship is concerned with various forms of creation and newness (Brush et al., 2003; Kazanjian, Drazin, & Glynn, 2001). Considering the inherently chaotic Asia Pacific J Manage (2008) 25:335–359 DOI 10.1007/s10490-007-9078-8 NO9078; No of Pages We would like to thank David Ahlstrom, Garry D. Bruton, Alex Eapen, Krzysztof Oblój, Mike Peng (Editor-in-Chief), and Ben Tipton for their helpful suggestions. We gratefully acknowledge support from the Research Grants Council of the Hong Kong government through grant HKUST6196/04H. J. Y. Yang (*) Discipline of International Business, University of Sydney, City Road, NSW 2006 Sydney, Australia e-mail: g.yang@econ.usyd.edu.au J. Li Department of Management of Organizations, Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong, People’s Republic of China e-mail: mnjtli@ust.hk
336 J.Y.Yang.J.L and unpredictable nature of institutional transition.the creation and newness of entrepreneurship activities in China could be very different from those in more advanced economies (e.g.Ahlstrom Bruton,2002).Yet to date,the management and entrepreneurship literature has paid only limited attention to these issues.The apid deve elopment of entre reneurship in China underscores an urgent need for y Our article provides an overviev of the xtant resea h related to the developm of domes entrepreneurship in China. We review the published leading English-language academic journals in management and entrepreneurship over the 26 vears from 1980 to 2005.From this review.we identify 68 articles and characterize them along three dimensions:the subject of study,the research methods employed,and the types of organizational forms examined.We have three objectives.The first is to provide scholars with knowledge about the types of entrepreneurship research that have been done on China since 1980.The second objective is to map the contributions of this literature by no the key findin de, in the literature.The third obiective is to develop an organizin framework to reflect the unique pattern of the emergence,diffusion,and transformation of domestic entrepreneurship in China.Based on this framework, we then delineate important areas for future research. A survey of China-related entrepreneurship research Journal sources We considered four key factors when choosing target academic joumals to be included in the literature survey.First.despite of the ever-growing interests in the study of entrepreneurship,entrepreneurship as a field of research is still in a theory- building stage (Harrison Leitch,1996;Wiseman Skilton,1999)and has been intersecting with research in other social science disciplines,particularly the strategic management domain (Aldrich Baker,1997;Busenitz et al.,2003;Lumpkin Dess,1996;Shane Venkataraman,2000).As scholars in the management field,we bes s urship ( in this review we will som lemic joumals n the field of general manageme nt(Johnso Podsakoff,1994;Li Tsui,2002;Li Yang.2006;Tahai Meyer,1999).Yet considering that this review serves as a first step in helping us capture the essence of China-related entrepreneurship literature,we would like to emphasize more on depth rather than width in this review.Therefore,in this review,we included seven commonly-agreed upon leading academic journals in the field of general management (Busenitz et al,2003):Academy of Management Journal(AMD) Academy of Management Review (AMR),Adn ni trative Science Quarterly (ASO Yeung (2006)for a recent review. ②Springer
and unpredictable nature of institutional transition, the creation and newness of entrepreneurship activities in China could be very different from those in more advanced economies (e.g. Ahlstrom & Bruton, 2002). Yet to date, the management and entrepreneurship literature has paid only limited attention to these issues. The rapid development of entrepreneurship in China underscores an urgent need for systematic knowledge of its characteristics and growth patterns. Our article provides an overview of the extant research related to the development of domestic entrepreneurship in China.1 We review the literature published in 11 leading English-language academic journals in management and entrepreneurship over the 26 years from 1980 to 2005. From this review, we identify 68 articles and characterize them along three dimensions: the subject of study, the research methods employed, and the types of organizational forms examined. We have three objectives. The first is to provide scholars with knowledge about the types of entrepreneurship research that have been done on China since 1980. The second objective is to map the contributions of this literature by reviewing the primary theoretical perspectives, key findings and conclusions and identifying research opportunities in the literature. The third objective is to develop an organizing framework to reflect the unique pattern of the emergence, diffusion, and transformation of domestic entrepreneurship in China. Based on this framework, we then delineate important areas for future research. A survey of China-related entrepreneurship research Journal sources We considered four key factors when choosing target academic journals to be included in the literature survey. First, despite of the ever-growing interests in the study of entrepreneurship, entrepreneurship as a field of research is still in a theorybuilding stage (Harrison & Leitch, 1996; Wiseman & Skilton, 1999) and has been intersecting with research in other social science disciplines, particularly the strategic management domain (Aldrich & Baker, 1997; Busenitz et al., 2003; Lumpkin & Dess, 1996; Shane & Venkataraman, 2000). As scholars in the management field, we are keen on opportunities for integrating and synthesizing the best research of management and entrepreneurship (Hitt & Ireland, 2000). So in this review, we will include some leading academic journals in the field of general management (Johnson & Podsakoff, 1994; Li & Tsui, 2002; Li & Yang, 2006; Tahai & Meyer, 1999). Yet, considering that this review serves as a first step in helping us capture the essence of China-related entrepreneurship literature, we would like to emphasize more on depth rather than width in this review. Therefore, in this review, we included seven commonly-agreed upon leading academic journals in the field of general management (Busenitz et al., 2003): Academy of Management Journal (AMJ), Academy of Management Review (AMR), Administrative Science Quarterly (ASQ), 1 We focus specifically on the People’s Republic of China. Therefore, we have not reviewed literature on entrepreneurship among overseas Chinese, such as those in Hong Kong, Taiwan, and Southeast Asia—see Yeung (2006) for a recent review. 336 J.Y. Yang, J. Li
The development of entrepreneurship in China 337 OS),and Journal of Management(APIM),the leading journal on Asia Pacific management in the review (Li Tsui,2002;Li Yang,2006;Quer,Claver,Rienda,2007) Second,we included three leading academic journals in entrepreneurship (Busenitz et al.,2003).i.e.Journal of Business Venturing (BV),Entrepreneurship Theory and Practice (ETP),and Journal of Small Business Management(JSBM).Thirdly,with nt and testing we decided to only publish arch derived scientific me hods We thu practitio mals from th mrneurship in China.we also excluded revi d on the de joumals,such as International Business Review (IBR).Journal of International Business Studies (JIBS),and Management International Review(MIR). Article selection A fundamental characteristic of entrepren ure and orga za nd the di scover new goo w materi s,and o organizing m as well nin an existing organization(Amit Brush et al.,2003;Casson,1982;Shane Venkataraman,2000).In this review,we define China's entrepreneurship as those creations and newness initiated by Chinese citizens or domestic firms,including private start-ups,township and collective enterprises,and transformed SOEs.To be included in this review an article had to address a theoretical or empirical issue related to China's entrepreneurship and its activities Em ical studies had to include data based or rers or ompa olved with entrepreneur itie es as defined ab is likely that a study ca ted activi using th ship”.Thus, we a lid not limit our search only on the keywords "entrepreneur,"and "entrepreneurship,"but expanded the search with a set of othe keywords such as "innovation,""private business/enterprise/firm," "private sector. small business. "township or village enterprise.""transition"and"venture capital and relied on 4rlform database for the literature search We also cross-checked our database against the lists of China-related management and organization articles in several othe published reviews(Li&Tsui,002;Li&Yang,006;White,00). This re otal of 68 articles related to urship in China the 11 icles published in the iod(1980 publish 10-year period (199 and s in each of the 1I journals over the three time periods Two observations can be made from Table 1.First,it shows that 36 articles were published in the eight management joumals,and 32 articles were published in the three leading entrepreneurship journals.Each entrepreneurship joumal had published ten or more articles related to entrepreneurship in China in the past 26 years.Yet, over the same eriod none of the t journals had published a co arable number of cles and merely three of them (Organization Science ②Springer
Journal of Management (JOM), Management Science (MS), Organization Science (OS), and Strategic Management Journal (SMJ). We also included the Asia Pacific Journal of Management (APJM), the leading journal on Asia Pacific management in the review (Li & Tsui, 2002; Li & Yang, 2006; Quer, Claver, & Rienda, 2007). Second, we included three leading academic journals in entrepreneurship (Busenitz et al., 2003), i.e. Journal of Business Venturing (JBV), Entrepreneurship Theory and Practice (ETP), and Journal of Small Business Management (JSBM). Thirdly, with primary interests in entrepreneurship theory development and testing, we decided to focus only on academic journals that publish research derived from rigorous scientific methods. We thus excluded management practitioner journals from the survey sample for this review. Finally, since this review focused on the development of domestic entrepreneurship in China, we also excluded international business journals, such as International Business Review (IBR), Journal of International Business Studies (JIBS), and Management International Review (MIR). Article selection A fundamental characteristic of entrepreneurship is a focus on creation, including the creation of new ventures and organizations, and the discovery of new goods, services, raw materials, and organizing methods as well as organizational renewal and innovations within an existing organization (Amit, Glosten, & Mueller, 1993; Brush et al., 2003; Casson, 1982; Shane & Venkataraman, 2000). In this review, we define China’s entrepreneurship as those creations and newness initiated by Chinese citizens or domestic firms, including private start-ups, township and collective enterprises, and transformed SOEs. To be included in this review an article had to address a theoretical or empirical issue related to China’s entrepreneurship and its activities. Empirical studies had to include data based on managers or companies involved with entrepreneurial activities as defined above. It is likely that a study can address entrepreneurship-related activities without using the word “entrepreneurship”. Thus, we did not limit our search only on the keywords “China,” “Chinese,” “entrepreneur,” and “entrepreneurship,” but expanded the search with a set of other keywords such as “innovation,” “private business/enterprise/firm,” “private sector,” “small business,” “township or village enterprise,” “transition” and “venture capital” and relied on ABI-Inform database for the literature search. We also cross-checked our database against the lists of China-related management and organization articles in several other published reviews (Li & Tsui, 2002; Li & Yang, 2006; White, 2002). This review identifies a total of 68 articles related to entrepreneurship in China in the 11 journals, with only three articles published in the first 10-year period (1980– 1989), 27 articles published in the second 10-year period (1990–1999), and 38 articles in the third period (2000–2005). Table 1 lists the number of articles in each of the 11 journals over the three time periods. Two observations can be made from Table 1. First, it shows that 36 articles were published in the eight management journals, and 32 articles were published in the three leading entrepreneurship journals. Each entrepreneurship journal had published ten or more articles related to entrepreneurship in China in the past 26 years. Yet, over the same period, none of the management journals had published a comparable number of articles and merely three of them (Organization Science, Strategic The development of entrepreneurship in China 337
338 J.Y.Yang.J.Li Number of articles Joumal name Subtotal1980-1989190-1999200-20 Managemen 36 1 1 24 Organization Science(OS) 8 6 eM( nagement Review (AMR) 8653222 A t doM (ASQ) 1 -1 agement (APJM) Entrepreneurship and Small Business 32 2 16 14 Entr rship Thee ory and Practice (ETP) Joumal of Bus Venturing (BV) 65 nal of Sm all Business Management (JSBM) 22 Management Journal,and Academy of Management Journal)published more than five relevant articles. Second,the table shows the number ofarticles appearing in the mainstream;leading ment journals have significantly ed over time with 11 articles oublished in the cond pe riod (10 1990-1999)and 24 articles published in years,2000 005).This pattem suggests a growing intere entrepreneurship-related issues in the Chinese context among management scholars and journal editors.Similarly,the number ofarticles appearing in the entrepreneurship ioumals also indicates an increasing interest in the entrepreneurship phenomenon in China.With the continuing market transition and the proliferation of entrepreneurial activities in China's economy,we believe that this research interest will continue and Research issues and methods What are the China-related entrepreneurship issues that have received research attention in the mainstream management and entrepreneurship literature so far?Have there been any changes in the research topics and methods over the 26 vears of the review period?To answer these questions,we classified each article by the research issues they addressed,by the research methods they employed,and by the organizational forms they emphasized.Each author first independently listed issues investigated in subsequentcomparisons and on ss the two domai s.Each article was primary topic add her found four general topics that can bebte o ev questions analysis in each domain:environmental/macro,firm strategy/structure,and ②Springer
Management Journal, and Academy of Management Journal) published more than five relevant articles. Second, the table shows the number of articles appearing in the mainstream; leading management journals have significantly increased over time, with 11 articles published in the second period (10 years, 1990–1999) and 24 articles published in the third period (only 6 years, 2000–2005). This pattern suggests a growing interest in entrepreneurship-related issues in the Chinese context among management scholars and journal editors. Similarly, the number of articles appearing in the entrepreneurship journals also indicates an increasing interest in the entrepreneurship phenomenon in China. With the continuing market transition and the proliferation of entrepreneurial activities in China’s economy, we believe that this research interest will continue and that high-quality research related to entrepreneurship in China will appear more frequently in leading management and entrepreneurship journals in the future. Research issues and methods What are the China-related entrepreneurship issues that have received research attention in the mainstream management and entrepreneurship literature so far? Have there been any changes in the research topics and methods over the 26 years of the review period? To answer these questions, we classified each article by the research issues they addressed, by the research methods they employed, and by the organizational forms they emphasized. Each author first independently listed issues investigated in the 68 articles. Through subsequent comparisons and discussions, we reached consensus on four general topics across the two domains. Each article was then coded as to the primary topic addressed in its research questions. We further found four general topics that can be attributed to three levels of analysis in each domain: environmental/macro, firm strategy/structure, and Table 1 China-related entrepreneurship research: survey of ten leading academic journals in management and entrepreneurship, 1980–2005. Number of articles Journal name Subtotal 1980–1989 1990–1999 2000–2005 Management 36 1 11 24 Organization Science (OS) 8 2 6 Strategic Management Journal (SMJ) 8 1 7 Academy of Management Journal (AMJ) 6 1 5 Academy of Management Review (AMR) 5 1 4 Administrative Science Quarterly (ASQ) 3 1 2 Journal of Management (JOM) 2 1 1 Management Science (MS) 2 2 Asia Pacific Journal of Management (APJM) 2 1 1 Entrepreneurship and Small Business 32 2 16 14 Entrepreneurship Theory and Practice (ETP) 11 5 6 Journal of Business Venturing (JBV) 11 6 5 Journal of Small Business Management (JSBM) 10 2 5 3 Total 68 3 27 38 338 J.Y. Yang, J. Li
The development of entrepreneurship in China 339 Studies at the environmental/macro level tend to treat"China"as an institutional context,implying a social,political,and economic structure that may impact the entrepreneurial decisions and behavior of firms and individuals.Firm-level studies focus on investigating how China's institutional environment impacts the strategies/structures and their changes in entrepreneurial ventures.as well as their implications for firm wth/performance.Individual/micro studies tend to treat a social-cul ral va ble,a xy for cultural values that may influenc behaviors and decisions at scholars in manager and have paid survey suggest ns o different research themes over the review period.Management scholars and journa editors seem to be more interested in examining firm-level themes(23 out of 36 articles.64%).while entrepreneurship researchers tend to focus more on the issues concerning the opportunity for the emergence of entrepreneurship(19 out of 32 articles.60%). In addition. ouped all the articles in the survey according to the research methods used,includin tative studies ase-ba tive studie developm studies Furt on the types of org ona orms they foc on,includin private/small busin nigh-tech fimms,township enterprises,and transformed SOEs.Table 2 summarizes the distributions. In terms of the research methods used,among the articles in the management journals,23(64%)are survey-based,11 (31%)are conceptual and overview studies, and only two (5%)are case-based qualitative studies.The majority of the firm-level studies(19 out of 23 articles,83%)are found to use survey-based or quantitative methods,while the majo rity (7 out of 11,64%)of the studies at the macro level are ng the ticles 238% in the als,16(50% tite overview papers,and the rema aining four 12% are case-b qualitative studies.Both survey-based/quantitative methods and case-based/qualitative methods have been employed to examine the issues across levels.Yet,the conceptual and review approach has been adopted to mainly examine the environmental/macro issues.i.e."Market transition/entrepreneurship development". In our survey,35 articles did not specify a clear organizational form when examining the research issues among the re aining 33 articles.15 (45%)foc sed and small busin five (16%6) rial high-tech wns lective enterprises (29% essed privatiz SOEs.From Ta L we can see tha e two streams of joumal outlets presented different stributions across the types of organizational forms.In the management journals.seven out of 13 studies (54%) focused on the transformation of SOEs,three on high-tech firms,two on private/ small businesses,and one for township enterprises.In the entrepreneurship journals 18 studies (90%)exclusively pointed to small entrepreneurial firms,including 13 articles on private and small businesses,two on entrepreneurial high-tech firms,and three article on townshin ent ugh the mber is small we did find two studies related to the entrepreneurial activities in transformed This ②Springer
individual/micro levels. Across the three levels of the studies, China as a research context would have played different roles on the development of entrepreneurship. Studies at the environmental/macro level tend to treat “China” as an institutional context, implying a social, political, and economic structure that may impact the entrepreneurial decisions and behavior of firms and individuals. Firm-level studies focus on investigating how China’s institutional environment impacts the strategies/structures and their changes in entrepreneurial ventures, as well as their implications for firm growth/performance. Individual/micro studies tend to treat “China” as a social-cultural variable, a proxy for cultural values that may influence cognitions, behaviors and decisions at the individual level. Our survey suggests that scholars in management and entrepreneurship have paid their attentions on different research themes over the review period. Management scholars and journal editors seem to be more interested in examining firm-level themes (23 out of 36 articles, 64%), while entrepreneurship researchers tend to focus more on the issues concerning the opportunity for the emergence of entrepreneurship (19 out of 32 articles, 60%). In addition, we grouped all the articles in the survey according to the research methods used, including survey/quantitative studies, case-based/qualitative studies, and conceptual development/overview studies. Furthermore, we classified the articles based on the types of organizational forms they focused on, including private/small businesses, entrepreneurial high-tech firms, township enterprises, and transformed SOEs. Table 2 summarizes the distributions. In terms of the research methods used, among the articles in the management journals, 23 (64%) are survey-based, 11 (31%) are conceptual and overview studies, and only two (5%) are case-based qualitative studies. The majority of the firm-level studies (19 out of 23 articles, 83%) are found to use survey-based or quantitative methods, while the majority (7 out of 11, 64%) of the studies at the environmental/ macro level are conceptual and overview papers. In contrast, among the articles in the entrepreneurship journals, 16 (50%) are survey/quantitative studies, 12 (38%) are conceptual and overview papers, and the remaining four (12%) are case-based qualitative studies. Both survey-based/quantitative methods and case-based/qualitative methods have been employed to examine the issues across levels. Yet, the conceptual and review approach has been adopted to mainly examine the environmental/macro issues, i.e. “Market transition/entrepreneurship development”. In our survey, 35 articles did not specify a clear organizational form when examining the research issues. Among the remaining 33 articles, 15 (45%) focused on private and small businesses, five (16%) examined entrepreneurial high-tech firms, three (10%) were about township and collective enterprises, and nine (29%) addressed privatization of SOEs. From Table 2, we can see that studies published in the two streams of journal outlets presented different distributions across the types of organizational forms. In the management journals, seven out of 13 studies (54%) focused on the transformation of SOEs, three on high-tech firms, two on private/ small businesses, and one for township enterprises. In the entrepreneurship journals, 18 studies (90%) exclusively pointed to small entrepreneurial firms, including 13 articles on private and small businesses, two on entrepreneurial high-tech firms, and three articles on township enterprises. Although the number is small, we did find two studies related to the entrepreneurial activities in transformed SOEs. This The development of entrepreneurship in China 339
340 J.Y.Yang.J.L 2 m-a 么Springer
Table 2 China-related entrepreneurship research: research methods and organization forms. Research themes Subtotal Research methods Organization forms Survey/ quantitative Case study / qualitative Conceptual / overview Private/small business High-tech Township and village SOEs Mixed Management 36 23 2 11 2 3 1 7 23 Market transition/business system change 8 1 7 1 7 Firm strategy/outcome 18 14 1 3 3 1 5 9 Inter-firm relationship/networks 5 5 1 4 Managerial values/traits/behavior 5 4 1 1 1 3 Entrepreneurship and Small Business 32 16 4 12 13 2 3 2 12 Market transition/entrepreneurship development 19 7 1 11 9 2 1 7 Firm strategy/outcome 3 3 1 1 1 Inter-firm relationship/networks 1 1 1 Entrepreneurial values/traits/behavior 9 6 2 1 3 1 5 Total 68 39 6 23 15 5 4 9 35 340 J.Y. Yang, J. Li
The development of entrepreneurship in China 341 corroborates our broad definition of China's entrepreneurship development that manifested inthe beginning of the review In summary,the 68 articles published in the 11 leading English-language joumals over the past 26 years provide us with a snapshot of past and current research interests in the development of entrepreneurship in China.The increasing appearance of such studies in mainstream management and entrepreneurship jourals suggests their value to global scholarship,and research on the development Mapping the contributions of the literature In this section,we summarize the key issues/conclusions of each article under four general research themes across the three levels.Table 3 provides an overview of these studies.Given the integrated nature of many studies,the distinction among these areas is somewhat arbitrary.We believe,however,that such an intuitive clustering would serve as a first step in helping us capture the essence of this literature. Environmental/macro level Most of the environmental/macro studies in the management journals described the transition nature of China's economy (Table 3(Environmental/macro studies)).Of the eight studies identified with the theme of"market transition/business system change",two focused on privatization of China's economy (Dharwadkar,George, Brandes,2000;Ramamurti,2000),three formulated theories on hybrid organiza- tional forms and ownership/pr rights change (Boisot&Child,1988.1996 Nee,1992),one op 00, enges and importance r studying management and organizational issues in the Chi ese context (Shenkar von Glinow,1994;Tsui Schoonhoven,Meyer,Lau,&Milkovich,2002).This line of literature tends to treat "China"as a unique institutional context,encompassing social,political,and economic elements that have impacted the reforms in the state-owned sector and the emergence of private firms.Therefore.economic and macro organization theories such as agency theory (Dharwadkar et al,2000),transaction cost economics(Boiso &Child,1988;Ram e ( uri.2000),stakeholder the e Prabhu,2000),and neoinstitutional Nee 1992)have been mainly employed as explain the above i sues In a sin environmental/macro studies in the entrepreneurship jourals depicted how cultural,political,economic,and other environmental conditions influence the emergence and development of entrepreneurship in China (Table 3 (Environmental/macro studies)).Seven studies presented a historical or comparative review on China's entrepreneurship development(Chang MacMillan. 1991:Fan.1996:Matthews,1996:Tan,2005,2007;Tsang,1996;Wing Yiu, 1996).Two studies highlighted the rtunities and threats faced by entn in China (Tsang,1994:Wing Yiu, Springer
corroborates our broad definition of China’s entrepreneurship development that manifested in the beginning of the review. In summary, the 68 articles published in the 11 leading English-language journals over the past 26 years provide us with a snapshot of past and current research interests in the development of entrepreneurship in China. The increasing appearance of such studies in mainstream management and entrepreneurship journals suggests their value to global scholarship, and research on the development of entrepreneurship in China has attracted growing attention among global scholars. Mapping the contributions of the literature In this section, we summarize the key issues/conclusions of each article under four general research themes across the three levels. Table 3 provides an overview of these studies. Given the integrated nature of many studies, the distinction among these areas is somewhat arbitrary. We believe, however, that such an intuitive clustering would serve as a first step in helping us capture the essence of this literature. Environmental/macro level Most of the environmental/macro studies in the management journals described the transition nature of China’s economy (Table 3 (Environmental/macro studies)). Of the eight studies identified with the theme of “market transition/business system change”, two focused on privatization of China’s economy (Dharwadkar, George, & Brandes, 2000; Ramamurti, 2000), three formulated theories on hybrid organizational forms and ownership/property rights change (Boisot & Child, 1988, 1996; Nee, 1992), one examined the development of financial institutions and its impacts on entrepreneurship activities (George & Prabhu, 2000), and the remaining two studies discussed the challenges and importance of studying management and organizational issues in the Chinese context (Shenkar & von Glinow, 1994; Tsui, Schoonhoven, Meyer, Lau, & Milkovich, 2002). This line of literature tends to treat “China” as a unique institutional context, encompassing social, political, and economic elements that have impacted the reforms in the state-owned sector and the emergence of private firms. Therefore, economic and macro organization theories, such as agency theory (Dharwadkar et al., 2000), transaction cost economics (Boisot & Child, 1988; Ramamurti, 2000), stakeholder theory (George & Prabhu, 2000), and neoinstitutional perspective (Boisot & Child, 1996; Nee, 1992) have been mainly employed as the theoretical perspectives to explain the above issues. In a similar vein, the 19 environmental/macro studies in the entrepreneurship journals depicted how cultural, political, economic, and other environmental conditions influence the emergence and development of entrepreneurship in China (Table 3 (Environmental/macro studies)). Seven studies presented a historical or comparative review on China’s entrepreneurship development (Chang & MacMillan, 1991; Fan, 1996; Matthews, 1996; Tan, 2005, 2007; Tsang, 1996; Wing & Yiu, 1996). Two studies highlighted the opportunities and threats faced by entrepreneurs in China (Tsang, 1994; Wing & Yiu, 2000). Three studies discussed the implications The development of entrepreneurship in China 341
342 J.Y.Yang.J.Li per 3a:Environmental/Macro Studies Management Issues/Conclusions Market transition/ Privatization of China's economy (Dharwadkar 2000.Ramamurti 2000) business system Hybrido onal forms and o ership/property rights change change (8) Development of financia institutions and its impactson ance Entrepreneurship and Small Business 。Historical hin develo change(19) Tan 2005 2007,Tsang 1996,Wing &Yiu 1996) in&Yiu 2000) by entrepreneurs in China (Tsang 1994 ·Dg Chns' ,Dana1999, how 1995) (Begley,Tan Schoch 2005,Bruton&Ahlstrom 2003),government 1996.Tan1996 3b:Firm-level Studies Management Issues/Conclusions tschert 1994.Tan Interfirm .relationships/network"to manage relatio c199602001 Entrepreneurship and Small Business Environment-strategy-p ance relations in township and village uthern Chi a (Luo echmoloy-loeed 2002) Interfirm ·Networkin g and the growth of young technology-intensive ventures in China (Zhao Aram 1995) Springer
Table 3 China-related entrepreneurship research: detailed research topics and summary of theoretical perspectives. 3a: Environmental/Macro Studies Management Issues/Conclusions . Privatization of China’s economy (Dharwadkar 2000, Ramamurti 2000) . Hybrid organizational forms and ownership/property rights change (Boisot & Child 1988 1996, Nee 1992) . Development of financial institutions and its impacts on entrepreneurship activities (George & Prabhu 2000) Market transition/ business system change (8) . Difficulty and importance of studying management and organizational issues in the Chinese context (Shenkar & von Glinow 1994, Tsui et al. 2004) Entrepreneurship and Small Business . Historical and comparative review on China’s entrepreneurship development (Chang & MacMillan 1991, Fan 1996, Matthews 1996, Tan 2005 2007, Tsang 1996, Wing & Yiu 1996) . Opportunities and threats faced by entrepreneurs in China (Tsang 1994, Wing & Yiu 2000) . Implications of entrepreneurship development in China’s economy (Anderson et al. 2003, Dana 1999, Chow 1995) Market transition/ business system change (19) . Specific factors influencing the evolution of China’s entrepreneurial ventures, such as culture (Zapalska 2001), institutional environments (Begley, Tan & Schoch 2005, Bruton & Ahlstrom 2003), government interventions (Anyansi-Archibong, Danenburg, & Tan, 1989; Danenburg & Tan 1989), and technology transfer (Lado & Vozikis, 1996, Tan 1996) 3b: Firm-level Studies Management Issues/Conclusions . Environment-strategy-performance relationships in China’s transition economy (Boisot & Child 1999, Child & Lu 1996, Davies & Walters 2004, Keister 2002, Lukas, Tan & Hult 2001, Luo, Tan & Shenkar, 1998, Peng 2003, Peng & Heath 1996, Tan & Litschert 1994, Tan & Tan 2005) Firm strategy/ outcome (18) . Product/technology innovation strategy (Atuahene-Gima & Li 2004, Li & Atuahene-Gima 2001 2002), organizational governance and structure (Lin & Germain 2003, Peng 2004, White 2000), financial strategy (Keister 2004), and strategic alliance (Hitt et al. 2004) Interfirm relationships/ network (5) . Using “interfirm relationships/network” to manage institutional constraints in the transition economy (Luo 2003, Park & Luo 2001, Peng & Luo 2000, Wu & Leung, 2005, Xin & Pearce 1996). Entrepreneurship and Small Business . Environment-strategy-performance relations in township and village enterprises in southern China (Luo 1999) . Roles of institutions and culture in shaping strategic actions by technology-focused entrepreneurial firms in China (Ahlstrom & Bruton 2002) Firm strategy/ outcome (3) . The development of total quality management in small firms in China (Lee 2004) Interfirm relationships/ network (1) . Networking and the growth of young technology-intensive ventures in China (Zhao & Aram 1995) 342 J.Y. Yang, J. Li
The development of entrepreneurship in China 343 Table 3 (continued) 3c:Individual/Micro Studies Managemer世 Issues/Conclusions Managerial values .Effects of culture and cross-national differences on managers' its/behavior ton 2004,Mitchell et al.2000.Vertinsky et 5 2002 eneur's limited accessibility to privatecquity (Batjargal &Liu Entrepreneurial .Effects of culture and cross-national differences on entrepreneurs' (9 Mitchell ct al 2002) z2001),and 2002)in the context of of entrepreneurship development in China's economy (Anderson,Li,Harrison, Robsor .2003:Chow,1995:Dana.1999).The certain factor s that inf studies tended to focus ence the ent reprene ent such alska&E ,2001 stitutional enviro ments (Begley,Tan, rventions (Anyansi- Archibong,Danenburg,Tan,1989;Danenburg Tan,1989),and technology transfer (Lado Vozikis.1996:Tan.1996). Many studies in this literature regarded the emergence and proliferation of private firms/small businesses as an indicator of entrepreneurship,regardless of the fact that most of them are just craft workshops.This emphasis is a bit different from that of the ent eurship literature in the ntext,wher e the fo us has bee ep vices,proc S,and etc (Shane enkataraman,2000) We will return to this ob n er sections The theoretical perspectives employed in this literature are broad,including transaction cost,information asymmetry,and agency theories from an economic perspective (Wing Yiu,2000);absorptive capacity and knowledge management from a strategic management perspective (Lado Vozikis,1996);resource- dependence and population ecology from an organization theory perspective (Begley,Tan,Scl )perspective( nd a s (Tsang.1996;Wing Yiu Edw rds,2001). Firm-level strategy We classify the firm-level studies into two broad research themes:firm strategy/ outcome,and inter-firm relationship/networks.Our discussions below primarily focus on studies of entrepreneurship related to China's domestic firms,including private firms,small businesses,township and village enterprises (TVEs).and transformed SOEs.and examine their interactions with the institutional environ- Springer
of entrepreneurship development in China’s economy (Anderson, Li, Harrison, & Robson, 2003; Chow, 1995; Dana, 1999). The remaining studies tended to focus on certain factors that influence the evolution of China’s entrepreneurial ventures, such as culture (Zapalska & Edwards, 2001), institutional environments (Begley, Tan, & Schoch, 2005; Bruton & Ahlstrom, 2003), government interventions (AnyansiArchibong, Danenburg, & Tan, 1989; Danenburg & Tan, 1989), and technology transfer (Lado & Vozikis, 1996; Tan, 1996). Many studies in this literature regarded the emergence and proliferation of private firms/small businesses as an indicator of entrepreneurship, regardless of the fact that most of them are just craft workshops. This emphasis is a bit different from that of the entrepreneurship literature in the Western context, where the focus has been on creation of new ventures with discovery of new technology, new combinations of services, products, and etc. (Shane & Venkataraman, 2000). We will return to this observation in later sections. The theoretical perspectives employed in this literature are broad, including transaction cost, information asymmetry, and agency theories from an economic perspective (Wing & Yiu, 2000); absorptive capacity and knowledge management from a strategic management perspective (Lado & Vozikis, 1996); resourcedependence and population ecology from an organization theory perspective (Begley, Tan, & Schoch, 2005), the institutional perspective (Bruton & Ahlstrom, 2003), and a combination of these different perspectives (Tsang, 1996; Wing & Yiu, 1996; Zapalska & Edwards, 2001). Firm-level strategy We classify the firm-level studies into two broad research themes: firm strategy/ outcome, and inter-firm relationship/networks. Our discussions below primarily focus on studies of entrepreneurship related to China’s domestic firms, including private firms, small businesses, township and village enterprises (TVEs), and transformed SOEs, and examine their interactions with the institutional environ- 3c: Individual/Micro Studies Management Issues/Conclusions . Effects of culture and cross-national differences on managers’ values/behavior (Egri & Ralston 2004, Mitchell et al. 2000, Vertinsky et al. 1990, Weber & Hsee 1998) Managerial values /traits/behavior (5) . Entrepreneur’s limited accessibility to private equity (Batjargal & Liu 2002) Entrepreneurship and Small Business . Effects of culture and cross-national differences on entrepreneurs’ values/behavior (Brush & Chaganti 1996, Busenitz & Lau 1996, Hayton, George, & Zahra 2002, Holt 1997, Mcgrath et al. 1992, Mitchell et al. 2002) Entrepreneurial values/traits/ behavior (9) . Entrepreneurs’ growth orientation (Lau & Busenitz 2001), and innovation and risk-taking attitude (Tan 2001, 2002) in the context of transition economy Table 3 (continued) The development of entrepreneurship in China 343
344 J.Y.Yang.J.L ments as well as strategy,structure,and performance consequences.We do not focus on the entrepreneurship activities of foreign invested firms in this review. When formulating and implementing its business strategies,a firm or an entrepreneur needs to consider its extemnal environments,especially the institutional environments This is particularly important in transition economies.where decision makers are mo ble to the institutional influenc 2002).This emphasis hasbeen sand changes (Child, dies in our In the management joumas,of the general patem of environment-strategy-performance relationships in China (Boisot Child,1999: Child Lu,1996;Davies Walters,2004;Keister,2002;Lukas,Tan,Hult, 2001;Luo,1999;Luo,Tan,Shenkar,1998;Peng,2003;Peng Heath,1996;Tan Litschert,1994;TanTan,2005).Among these studies,some investigated subjective perceptions of firm performance using survey measures (e.g.Davies Walters.2004:Lukas.Tan.Hult.2001:Luo.2003:Tan Litschert.1994:Tan Tan.2005).and others focused on mor objective performance outc omes such as measures for sale and firm profit (e.g.Park Luo,200 tena to rocus on general corporate strategies and management topics,such as product/technology innovation strategy (Atuahene-Gima Li,2004;Li Atuahene-Gima,2001,2002),corporate governance and organizational structure(Lin Germain,2003;Peng,2004;White, 2000),financial strategy (Keister,2004),and strategic alliances (Hitt,Ahlstrom, Dacin,Levitas,Svobodina,2004).Theoretical treatments used in this literature generally fall into the strategic management category,including resource-dependence theory (Davies Walters.2004:Li Atuahene-Gima,2001).resou rce-based view (e.g. Li Atuahene-Gi na,2002;White,.2000). information pro Atua i,20 an Germain,2003;Lukas, s in this literature have tried to integrate the institution-based view with the strategic choice perspectives (Hitt et al,2004;Keister,2002,2004;Peng,2003,2004;Tan Tan, 2005)to explain the unique pattems of firm-level strategies in China. Studies of the second theme in this stream mainly emphasized the importance of "inter-firm relationships/network"to manage institutional constraints in a transition economy (Luo.2003:Park Luo.2001:Peng Luo.2000:Wu Leung.2005: Kin Pe ce 1996).Here,the guanxi network and inter-org izational relationship essentrepreneurial oppor perspectives employed in this stream include social network theory,strategic management,and the institutional perspective. There were not many firm-level studies published in the entrepreneurship joumals. Among the three studies with the theme of"firm strategy/outcome",one examined the environment-strategy-performance relations in township and village enterprises in southern China (Luo 1999),another one investigated the roles of institutions and culture in sha ing actions by technology-focused eurial firm (Ahlstrom B 2002). the las st one exp lored the de manage ent in small e,2004).C y hese studies have attempted to integrate the institutional-based view and strategic choice perspectives to explain entrepreneurs'strategic actions.There is only one study examining the theme ②Springer
ments as well as strategy, structure, and performance consequences. We do not focus on the entrepreneurship activities of foreign invested firms in this review. When formulating and implementing its business strategies, a firm or an entrepreneur needs to consider its external environments, especially the institutional environments. This is particularly important in transition economies, where decision makers are more susceptible to the institutional influences and changes (Child, 1994; Peng, 2003; Scott, 2002). This emphasis has been reflected in the studies in our survey. In the management journals, a number of studies examined the general pattern of environment-strategy-performance relationships in China (Boisot & Child, 1999; Child & Lu, 1996; Davies & Walters, 2004; Keister, 2002; Lukas, Tan, & Hult, 2001; Luo, 1999; Luo, Tan, & Shenkar, 1998; Peng, 2003; Peng & Heath, 1996; Tan & Litschert, 1994; Tan & Tan, 2005). Among these studies, some investigated subjective perceptions of firm performance using survey measures (e.g. Davies & Walters, 2004; Lukas, Tan, & Hult, 2001; Luo, 2003; Tan & Litschert, 1994; Tan & Tan, 2005), and others focused on more objective performance outcomes, such as accounting-based measures for sales growth and firm profit (e.g. Park & Luo, 2001; Peng, 2004). The remaining studies of this theme tend to focus on general corporate strategies and management topics, such as product/technology innovation strategy (Atuahene-Gima & Li, 2004; Li & Atuahene-Gima, 2001, 2002), corporate governance and organizational structure (Lin & Germain, 2003; Peng, 2004; White, 2000), financial strategy (Keister, 2004), and strategic alliances (Hitt, Ahlstrom, Dacin, Levitas, & Svobodina, 2004). Theoretical treatments used in this literature generally fall into the strategic management category, including resource-dependence theory (Davies & Walters, 2004; Li & Atuahene-Gima, 2001), resource-based view (e.g. Li & Atuahene-Gima, 2002; White, 2000), information process theory (Atuahene-Gima & Li, 2004), and strategy–structure–performance paradigm (Lin & Germain, 2003; Lukas, Tan, & Hult, 2001; Tan & Litschert, 1994). Many studies in this literature have tried to integrate the institution-based view with the strategic choice perspectives (Hitt et al., 2004; Keister, 2002, 2004; Peng, 2003, 2004; Tan & Tan, 2005) to explain the unique patterns of firm-level strategies in China. Studies of the second theme in this stream mainly emphasized the importance of “inter-firm relationships/network” to manage institutional constraints in a transition economy (Luo, 2003; Park & Luo, 2001; Peng & Luo, 2000; Wu & Leung, 2005; Xin & Pearce, 1996). Here, the guanxi network and inter-organizational relationships are used to acquire critical resources, assess entrepreneurial opportunities, or to substitute for the institutional voids in the transition economy. The theoretical perspectives employed in this stream include social network theory, strategic management, and the institutional perspective. There were not many firm-level studies published in the entrepreneurship journals. Among the three studies with the theme of “firm strategy/outcome”, one examined the environment–strategy–performance relations in township and village enterprises in southern China (Luo 1999), another one investigated the roles of institutions and culture in shaping strategic actions by technology-focused entrepreneurial firms (Ahlstrom & Bruton, 2002), and the last one explored the development of total quality management in small manufacturing firms (Lee, 2004). Clearly, these studies have attempted to integrate the institutional-based view and strategic choice perspectives to explain entrepreneurs’ strategic actions. There is only one study examining the theme 344 J.Y. Yang, J. Li