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Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 31, No. 3, pp.307-331
ISSN: 1225-0279 (Print)
Print publication date 31 Aug 2018
Received 24 Mar 2018 Revised 06 Jul 2018 Accepted 24 Jul 2018

Entrepreneurship and Economic Growth during China’s Economic Transformation, 1978–2008

Shiyong Zhao
Shiyong Zhao, School of Business, Macau University of Science and Technology, Macau, China, Tel: +853-8897-2860 syzhao@must.edu.mo

JEL Classification

Abstract

Using China’s provincial-level panel data from 1978–2008, we examine the effects of entrepreneurship on economic growth in the context of China’s transformation from a centrally planned to a market-oriented economy. We divide entrepreneurship into two types: business creation and innovation. Our estimation results show both types of entrepreneurship have significant positive effects on China’s GDP per capita growth rate over the sample period. Specifically, the annual growth rate of the GDP per capita will increase by 1.98 percentage points if business creation entrepreneurship increases by one standard deviation. Moreover, the annual growth rate will increase by 0.134 percentage points if innovation entrepreneurship increases by ten percent. The results are robust even when we control for different sets of demographical and institutional variables. China’s experience shows a strong government does not conflict with the entrepreneurs’ role.

Keywords:

Business creation, China, Economic growth, Entrepreneurship, Innovation

Acknowledgments

JEL Classification: L26, O15, O53

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