Institutional environment, public-private hybrid forms, and entrepreneurial reinvestment in a transition economy

Wubiao Zhou

Journal of Business Venturing, 2017, vol. 32, issue 2, 197-214

Abstract: Many less developed and, especially, transition economies have had high levels of entrepreneurial reinvestment for relatively long periods despite the absence of developed government institutions. To resolve this puzzle, this study proposes that many entrepreneurial firms in these economies have been actively engaged in political activities, through which organizational arrangements are created to co-opt government agencies into their organizational structures to manipulate and even control unfavorable institutional environments. It empirically evaluates the role of one such organizational arrangement – public-private hybrid forms – in China's gradual reform period. It suggests that, through protecting property rights and facilitating access to key resources and opportunities, public-private hybrid forms may act as a substitute for deficient market and legal institutions, thus facilitating entrepreneurial reinvestment. The findings from a national sample of Chinese entrepreneurial firms support our propositions. In general, entrepreneurial firms adopting public-private hybrid forms enjoy higher entrepreneurial reinvestment rates than pure private firms during gradual reform; and this may be the case because such forms help to both protect private property rights and access key resources and opportunities. In addition, the association between the forms and reinvestment rate is found higher under less developed government institutions.

Keywords: Public-private hybrid forms; Entrepreneurial political activities; Entrepreneurial reinvestment rate; Legal and market institutions; China (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0883902616302828
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jbvent:v:32:y:2017:i:2:p:197-214

DOI: 10.1016/j.jbusvent.2016.11.002

Access Statistics for this article

Journal of Business Venturing is currently edited by S. Venkataraman

More articles in Journal of Business Venturing from Elsevier
Bibliographic data for series maintained by Catherine Liu ().