Economic Transition and Entrepreneurship Development in China

Harvard Economics Review, 2016

6 Pages Posted: 29 Jun 2020 Last revised: 7 Jul 2020

See all articles by Ying Zhang

Ying Zhang

Erasmus University Rotterdam

André van Stel

Trinity College Dublin

Date Written: September 9, 2016


One of the most prominent features of China’s transition from a centrally planned economy to a market-based economy is the emergence of entrepreneurship, although previous literature discusses this phenomenon descriptively rather than prescriptively. In this article, we consider entrepreneurship developments in China since the end of the 1970s and argue that the role of entrepreneurship in the economy has changed considerably over the last four decades. Our perception is that initially, China’s entrepreneurship development stemmed from China’s economic transition, but currently, entrepreneurship is both influenced by and influences economic development. We propose a conceptual model of the role of entrepreneurship in China’s contemporary economy, which we test using a unique database for 31 Chinese regions during the period from 1997 to 2009. Our analysis shows that two types of entrepreneurial organizations (siyingqiye and getihu) in China play important but distinct roles in stimulating China’s economic development.

Keywords: Entrepreneurship, Economic Development, China

JEL Classification: M13, F63

Suggested Citation

Zhang, Ying and van Stel, André, Economic Transition and Entrepreneurship Development in China (September 9, 2016). Harvard Economics Review, 2016, Available at SSRN: or

Ying Zhang (Contact Author)

Erasmus University Rotterdam ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA

André Van Stel

Trinity College Dublin ( email )

2-3 College Green
Dublin, Leinster D2

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