Doing Business in China: The Interplay between Parental and Governmental Influence
Speaker: Xiaohuan Lan (Fudan University)
Date: Oct. 17, Wednesday, 2018
Time: 12 pm - 1 pm
Venue: Room 1050 at Pudong Campus
Abstract:
There exist two contradictory views on doing business in China: one is that China is an entrepreneurial country with many rags-to-riches tales; the other is that China's business environment is unfriendly to entrepreneurs, and one can rarely succeed without personal ties to the state. We argue that both views are apt but incomplete. Instead, the role of personal ties depends on the role of the government. Empirically, using multiple waves of a nationally representative survey between 2005 and 2012, we first evaluate the advantage of having cadre parents for becoming a business owner. Then, we document that the advantage increases with state involvement in the economy proxied by government spending on business-related activities. We further exploit the Fiscal Stimulus Package in 2009 for exogenous variation in government business spending. Additional evidence from firm-level subsidies and subjective evaluation of factors that matter for success sheds light on the mechanism.
Speaker’s website:
http://xiaohuanlan.weebly.com/
Speaker: Xiaohuan Lan (Fudan University)
Date: Oct. 17, Wednesday, 2018
Time: 12 pm - 1 pm
Venue: Room 1050 at Pudong Campus
Abstract:
There exist two contradictory views on doing business in China: one is that China is an entrepreneurial country with many rags-to-riches tales; the other is that China's business environment is unfriendly to entrepreneurs, and one can rarely succeed without personal ties to the state. We argue that both views are apt but incomplete. Instead, the role of personal ties depends on the role of the government. Empirically, using multiple waves of a nationally representative survey between 2005 and 2012, we first evaluate the advantage of having cadre parents for becoming a business owner. Then, we document that the advantage increases with state involvement in the economy proxied by government spending on business-related activities. We further exploit the Fiscal Stimulus Package in 2009 for exogenous variation in government business spending. Additional evidence from firm-level subsidies and subjective evaluation of factors that matter for success sheds light on the mechanism.
Speaker’s website:
http://xiaohuanlan.weebly.com/