Ties that Bind: The Emergence of Entrepreneurs in China

30 Pages Posted: 13 Feb 2003

See all articles by Barbara Krug

Barbara Krug

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM); Erasmus Research Institute of Management (ERIM)

Date Written: January 2000, 12

Abstract

The paper describes the emergence of entrepreneurship in Shanxi province based on fieldwork in the last 6 years. Employing institutional and evolutionary economics shows that both the kind of firms that emerge and the individual behaviour of entrepreneurs reflect a systematic response to the situational constraint all would-be entrepreneurs face, namely a high level of uncertainty and weak institutions. In this situation to establish firms with a weak organisational identity allows to flexibly respond to new opportunities, while a strong reputation for accountability of the owners and managers is needed to get long term business relations started. As the Shanxi sample shows accountability can be achieved by a mix of reviving old economic institutions, hijacking social organisations, and building new business practices. To the extent that old institutions, social organisations and business practices do not spread equally across China, different forms of firms and different forms of entrepreneurship can be expected within China. In short, local cultures matter.

Keywords: evolutionary economics, organisational change, dealing with uncertainty and risk

JEL Classification: M, M10, L2, H32, H11, M13, O53, P21, P3, Z1

Suggested Citation

Krug, Barbara, Ties that Bind: The Emergence of Entrepreneurs in China (January 2000, 12). ERIM Report Series Reference No. ERS-2000-44-ORG. Available at SSRN: https://ssrn.com/abstract=370853

Barbara Krug (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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