The Impact of Marketization on Entrepreneurship in China: Recent Evidence

Yang Zhou and Joshua Hall
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Yang Zhou: West Virginia University, Department of Economics

No 17-22, Working Papers from Department of Economics, West Virginia University

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.

Keywords: entrepreneurship; marketization; economic freedom; regional science; China (search for similar items in EconPapers)
JEL-codes: L26 P25 P37 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2017-09
New Economics Papers: this item is included in nep-cna, nep-ent and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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