• 详情 Innovation: Early Leadership and Age Dynamics -Evidence from Chinese SMEs
    This study investigates the impact of early leadership experiences on innovation performance in small and medium-sized enterprises (SMEs) in China. Using Enterprise Survey for Innovation and Entrepreneurship in China (ESIEC) cross-sectional datasets, it examines the mediating role of psychological traits and the moderating effect of age in this relationship. The analysis employs fixed effects models to control for regional and industry-specific unobserved characteristics. Results indicate a significant positive relationship between early leadership experiences and innovation, with psychological traits mediating this relationship strongly in younger entrepreneurs. For older entrepreneurs, early leadership has a more direct and stronger impact on innovation. These findings underscore the importance of early leadership development in education phase and suggest that the influence and pathways evolve with age, offering particular insights into the formation and application of social and human capital in the entrepreneurial journey.
  • 详情 Research on the Mechanism Involved in Urban Inclusiveness and Resident Entrepreneurship: Evidence from China
    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.
  • 详情 Housing Speculation and Entrepreneurship
    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.
  • 详情 Learning by Investing: Entrepreneurial Spillovers from Venture Capital
    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.
  • 详情 Exploring China’s Dual-Class Equity Structure: Investor Protection Measures and Policy Implications
    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.
  • 详情 Market-Based Innovation Policy: Evidence from High-Tech Incubators in China
    Using proprietary data of all high-tech incubators in China, we study a new approach by government to implement industrial policy through market intermediaries instead of directly allocating resources. Exploiting a highly localized industrial policy that targets different “strategic emerging industries” across provinces, we find that the incubators in policy-targeted industries receive higher government subsidy after the policy relative to their peers in other industries. Moreover, we find evidence that government subsidy to high-tech incubators increases the incubated startups’ innovation activity. Privately owned incubators in targeted industries, relative to their state-owned peers, receive less government subsidy, although they utilize government subsidy much more efficiently than do their state-owned peers.
  • 详情 Unequal Transition: The Making of China’s Wealth Gap
    This paper studies the evolution of wealth inequality during China’s rapid economic growth since its market-oriented reforms in the early 1990s. We first document the evolution and composition of China’s wealth distribution and summarize stylized facts on aspects of the growth and reform process that are key to understanding wealth accumulation. Then we develop a heterogeneous-agent dynamic general equilibrium model that incorporates two sectors, the rural agricultural sector and the urban manufacturing sector, with endogenous migration, occupation, and durable consumption (housing) choices subject to frictions. In particular, the persistent financial market friction that entrepreneurs face plays a key role, as it ensures that the wealth brought by rapid capital accumulation is accrued predominantly to entrepreneurs.Our quantitative exercise decomposes the rising wealth inequality in China into different contributing factors.
  • 详情 The Death of Distance? COVID-19 Lockdown and Venture Capital Investment
    Exploiting staggered COVID-19 lockdowns and reopening across different regions in China, we study how lockdowns affect the investment decisions of venture capital (VC) investors and whether such changes are temporary or enduring in the post-pandemic era. Contrary to the conventional wisdom that lockdowns exacerbate the “tyranny of distance” (i.e., VCs avoid investing in remote ventures), our findings suggest the “death of distance”: VCs invest in remoter ventures during a lockdown and such effects persist even after the economy reopens. Such lockdown effects are more pronounced when there is better internet infrastructure, when the level of information asymmetry between VCs and entrepreneurs is lower, and when VCs are more experienced. The lockdown effects can be explained by the advancement and adoption of remote communication technology as a response to the social distancing requirements. As geographic boundaries of VC investment are shattered by remote communication technology, local competition among VCs has been intensified, the monopoly power of VCs has been curtailed, and the regional inequality of entrepreneurial access to VC financing has been mitigated.