Is Entrepreneurship Missing in Shanghai?
Massachusetts Institute of Technology (MIT) - Sloan School of Management
Northwestern University - Kellogg School of Management
June, 30 2008
MIT Sloan Research Paper No. 4707-08
Using a unique census dataset on all industrial firms (with more than 5 million yuan in sales), we document a phenomenon of missing entrepreneurship in Shanghai. Entrepreneurship is defined as private, new entrants in our paper. Specifically, in terms of business density, the size of employment and a host of other measures, the relative ranking of Shanghai was always near the bottom in the country. All these empirical findings took place against a backdrop of the presumably huge locational advantages of Shanghai - the substantial human capital, rapid GDP growth, and a long and stellar - but pre-communist - history of entrepreneurship. We propose a hypothesis that Shanghai adopted a particularly rigorous version of industrial policy model of economic development and this industrial policy proclivity may have led to the atrophy of entrepreneurship in Shanghai.
Number of Pages in PDF File: 45
Keywords: Shanghai, Entrepreneurship
JEL Classification: F00, L26, R11
Date posted: July 1, 2008