Business Environment and Dual-Track Private Sector Development : China's Experience in Two Crucial Decades

Long, Cheryl Xiaoning ; Xu, L. Colin ; Yang, Jin

World Bank, Washington, DC

关键词: BUSINESS ENVIRONMENT;    PRIVATE SECTOR DEVELOPMENT;    INNOVATION;    ENTREPRENEURSHIP;    LOCAL GOVERNANCE;   

DOI  :  10.1596/1813-9450-9161
RP-ID  :  WPS9161

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

A void in the literature on the businessenvironment is how it evolves over time. Focusing on Chinaduring its crucial two decades of transition (from the early1990s to the early 2010s), this paper documents how thecountry's business environment and the characteristicsof entrepreneurs evolved, along with the role played bylocal governments. Relying on multiple comprehensive datasets, the paper shows that many aspects of local businessenvironments improved: infrastructure, development of thecourt system, and access to external finance. Meanwhile, theshare of politically connected private firms remained large,and their advantage in accessing key resources increased.Under this dual-track private sector development, privatefirms became larger and more innovative and adopted moreformal corporate governance mechanisms. Entrepreneurs becamemuch better educated, with more diverse sectoral experience.Market competition increased over time, especially afterChina's World Trade Organization entry. The paperoffers suggestive evidence that this dual track developmenthad negative consequences, such as a lower tendency toinnovate by politically connected firms.