Informal institutions can play a crucial role in fostering corporate and policy innovation, especially when formal institutions are weak. However, their intangible nature makes them difficult to quantify. In this paper, we proxy the strength of kinship-based informal institutions using surname homogeneity among business owners, specifically, the extent to which they share a limited number of surnames within the same county. Our analysis reveals that a one-standard-deviation increase in the strength of informal institutions leads to a 21.1% increase in patent filings and an 18.9% increase in policy innovation. We find that kinship-related informal institutions foster corporate innovation by compensating for weak formal institutions, enhancing protection for intellectual property rights, facilitating access to finance, improving public service delivery, and promoting supply chain cooperation. We also suggest that kinship-related informal institutions encourage local governments to engage in policy experimentation, which relies on the collaboration of business owners. This experimentation process is easier to coordinate and monitor in counties dominated by a few kinship networks. Both informal institutions and policy innovation contribute to economic development and foster entrepreneurial market entries. However, the positive impact of informal institutions declines over time as formal institutions strengthen in China.

This paper examines the impact of asset bubbles on innovation and long-run economic growth within a semi-endogenous growth framework, incorporating idiosyncratic productivity shocks and endogenous credit constraints in the R&D sector. It demonstrates that pure bubbles tied to intrinsically useless assets and equity bubbles linked to intermediate goods firms can coexist, relaxing credit constraints and boosting entrepreneurs’ total factor productivity (TFP), which stimulates R&D and enhances growth along the transitional path. However, these bubbles generally do not influence the long-run economic growth rate. The model’s mechanisms and predictions are supported by aggregate and firm-level evidence, showing a positive correlation between equity bubbles and R&D investment, with stronger effects during periods of tightened financial constraints.

This study examines the effects of the robotic subsidy policy in China’s manufacturing sector. The demand-side subsidy policy aims at encouraging manufacturing firms to invest in robotics by lowering the cost of purchase. Our difference-in-difference analysis reveals distributional impacts of municipality-level robot subsidies on manufacturing firms of different scales. Although the subsidy brings a 14.2% increase in the application of robot patents, the facilitated access to robotics has not transformed into new firm entries. Strikingly, new firm entry decreases by 23.5% after the policy implementation. On the other hand, robot subsidies have increased the revenue, total asset, and employment of larger manufacturing firms by 9.8%, 6.9%, and 6.7%, respectively. To interpret the mechanism, we develop a simplified framework incorporating financial frictions into a task-based model. The model reveals that idiosyncratic borrowing costs lead to an inefficient equilibrium by generally depressing automation adoption and creating automation dispersion across firms. Such ex-ante distortion results in a uniform subsidy disproportionately benefiting firms with better capital access, thus creating a trade-off in terms of efficiency: while the subsidy can enhance overall automation, it simultaneously exacerbates automation dispersion. To quantify the efficiency implications, we embed this simplified model into a dynamic heterogeneous-agent framework, calibrated to the 2010 productivity distribution, financial frictions, and robot density in the industrial sector in China. Our dynamic model reveals that a 20% robot subsidy narrows the gap between mean and optimal automation level by 22% percentage points, while raises automation dispersion by 49%. This results in a 1.23% increase in aggregate output at the cost of a 2.40% decline in TFP. This dynamic model proposes a novel mechanism that automation exacerbates capital misallocation by enlarging asset accumulation dispersion between workers and entrepreneurs. Controlling for this dynamic feedback could enhance the subsidy-induced output gain by an additional 26%

There are large regional disparities in relation to the development of digital finance in China. This study expands on the human–land relationship to analyze the impact of terrain relief on digital finance adoption using China Household Finance Survey data. The results show an inverted U-shaped relationship. Further, mechanism analysis indicates that terrain relief influences the wealth creation environment and stimulates the likelihood of entrepreneurship, especially through small and medium-sized enterprises. In addition, the impact is more pronounced in rural and western areas. These findings provide insights enabling the development of a more inclusive financial system.

This study aims to examine the influence of Chinese immigrants on Canadian business culture and the role of Chinese business associations in shaping the Canadian business landscape. A qualitative research design was used to explore the topic, and semi-structured interviews were conducted as the primary method of data collection. 25 participants were selected for the study through purposive sampling, including Chinese immigrant business owners, employees of Chinese-owned businesses, and members of Chinese business associations in Canada. Thematic analysis was used to analyze the data collected through the interviews and identify patterns and themes that emerged from the participants’ responses. The study found that Chinese immigrants have had a significant influence on Canadian business culture and that Chinese business associations play an important role in promoting business cooperation between different cultural groups. The results also suggest that embracing cultural diversity in the business environment has both benefits and challenges, and businesses must effectively manage cultural diversity in the workplace to promote cooperation between different cultural groups. This study provides valuable insights into the ways in which Chinese immigrants have shaped the Canadian business landscape and the importance of embracing cultural diversity in the business environment. [译]本研究旨在探讨华裔移民对加拿大商业文化的影响，以及华人商业协会在塑造加拿大商业格局中的作用。本研究采用定性研究设计，以半结构化访谈作为主要的数据收集方法。通过目标抽样选定了25名参与者，包括加拿大华裔移民企业主、华裔企业员工，以及加拿大华人商业协会的成员。本研究通过访谈收集数据，并使用主题分析法对参与者的回答进行模式和主题的识别与分析。研究发现，华裔移民对加拿大商业文化产生了显著影响，同时，华人商业协会在促进不同文化群体之间的商业合作中发挥着重要作用。研究结果还表明，在商业环境中拥抱文化多样性既带来了利益也带来了挑战，企业必须有效地管理工作场所中的文化多样性，以促进不同文化群体之间的合作。本研究为理解华裔移民如何塑造加拿大商业格局，以及商业环境中拥抱文化多样性的重要性提供了有价值的见解。

Based on three key principles, "equity, openness, and sharing," this paper assesses the relationship, and the internal mechanism driving the relationship, between urban inclusiveness and resident entrepreneurship. This includes constructing an urban inclusiveness index, and analyzing data from the 2018 China General Social Survey (CGSS). The key results indicate that multi-perspective urban inclusiveness has a significant positive effect on resident entrepreneurship. The mechanism analysis shows that urban inclusiveness can improve the probability of residents being entrepreneurial, by improving risk attitude, promoting class mobility, and expanding social networks. A heterogeneity analysis shows that urban inclusiveness has a significant impact on the entrepreneurial choice of local residents, and low-class and high-class residents; urban inclusiveness has no significant impact on the entrepreneurial choice of transient residents and middle-class residents. In addition, urban inclusiveness plays a more significant role in promoting residents’ choice of survival entrepreneurship, compared with opportunistic entrepreneurship. The research conclusions have important policy implications for constructing inclusive cities and for promoting innovation and entrepreneurship vitality.

We document a speculation channel through which house market booms negatively affect entrepreneurship. To address endogeneity concerns, we exploit plausibly exogenous variation in house prices generated by staggered and unintended policy spillovers in China. We find house market speculation triggered by house booms crowds out entrepreneurship. Reduced labor supply, reduced capital supply, and heightened entry costs do not appear to explain our main findings. The negative effect exhibits in the OECD countries as well. Our paper complements the well-documented collateral channel by offering novel evidence on a previously under-explored adverse consequence of house market booms – their hindrance to entrepreneurship.

This paper studies how investing in venture capital (VC) affects the entrepreneurial outcomes of individual limited partners (LPs). Using comprehensive administrative data on entrepreneurial activities and VC fundraising and investments in China, we first document that individual LPs, on average, contribute about 50% of the capital of each fund in which they participate, and over 50% of them are entrepreneurs. We then exploit an identification strategy by comparing the entrepreneurial outcomes of individual LPs in funds that eventually launched with those in funds that failed to launch. The fraction of committed capital from corporate LPs in industries that subsequently encounter poor returns is used as an instrument for funds' launch failures. We find that after investing in a successfully launched VC fund, individual LPs create significantly more ventures than do LPs in funds which failed to launch. These new ventures tend to be high-tech firms and file more patents than do the LPs' prior ventures. We find evidence consistent with venture investments being a channel through which individual LPs learn.

Mainland China traditionally maintained the one-share-one-vote (OSOV) principle. Since 2019, however, Chinese authorities have introduced rules supporting the dual-class equity structure (DCES) for “innovative enterprises.” Due to concerns about investor-protection issues, China’s DCES currently operates as a “stringent permit system,” and as of the end of June 2023, only eight corporations have achieved listings with DCES adopted. This article provides a broad and profound policy analysis of the Chinese DCES system, including empirical analyses on the eight existing DCES cases. Also, this article explores the legal and economic aspects of investor-protection issues with respect to the China’s DCES. Regarding DCES rules in the context of investor protection, this article examines “three sets of investor safeguard measures”: (1) “three numerically speciffed rules” (this article calls the three rules the “10% equity rule,” the “10-time voting-right rule,” and the “2/3 voting-right rule”); (2) “sunset provisions” (such as event-driven sunset and time-based sunset); and (3) “rules converting special-voting shares (shares with higher voting rights) into shares with one vote” (such as conversion in mergers and a conversion in an amendment of the charter). Due to the concerns about the prevailing practice of tunneling in China, this article argues in favor of the “DCES with enhanced investor protection.” To foment founders’ entrepreneurship and allow more corporations with the DCES, however, this article recommends that the Chinese authorities gradually relax the implementation of the current DCES system of de facto stringent permit system. The future relaxation of the stringent permit system will also be beneffcial for China because, as a result of the escalated tension with the U.S., China has already lost a substantial portion of its reliable DCES-IPO markets in the U.S. Also, DCES-IPO markets in Hong Kong is still inactive. Thus, the establishment of viable DCES-IPO markets will soon be necessary in Mainland China.

What determines the prevalence of family firms? In this project, we investigate the role of historical family culture in the spatial distribution of family firms. Using detailed firm-level data from China, we ffnd that there is a larger share of family firms in regions with a stronger historical family culture, as measured by genealogy density. The results are further conffrmed by an instrumental variable approach and the nearest neighbor matching method. Examining the mechanisms, we find that entrepreneurs in regions with a stronger historical family culture: i) tend to have family members engage more in firms; ii) are more likely to raise initial capital from family members; iii) are more willing to pass on the firms to their children. Historical family culture predicts better firm performance partly due to a lower leverage ratio.