From Tradition to Transition: Entrepreneurship, competition, and marketization in China’s early reform process
(2011) NEKK01 20111Department of Economics
- Abstract
- Economic theory predicts a positive relationship between competition and innovation. Competition both forces and enables firms to innovate. On competitive markets firms are forced to innovate to avoid shrinking profit margins. At the same time competition also helps firms to innovate: On competitive markets information is dispersed among decentralized economic agents through price signals, information that can be used to identify opportunities for economic profit. Lack of competition, leading to a lack of reliable price signals, therefore reduces both the need for innovation and the possibilities for innovation. This thesis applies this strand of theory on China’s early transition from socialism. Data from 295 prefecture-level cities, from... (More)
- Economic theory predicts a positive relationship between competition and innovation. Competition both forces and enables firms to innovate. On competitive markets firms are forced to innovate to avoid shrinking profit margins. At the same time competition also helps firms to innovate: On competitive markets information is dispersed among decentralized economic agents through price signals, information that can be used to identify opportunities for economic profit. Lack of competition, leading to a lack of reliable price signals, therefore reduces both the need for innovation and the possibilities for innovation. This thesis applies this strand of theory on China’s early transition from socialism. Data from 295 prefecture-level cities, from 1984 and 1987, are used to test the effects of marketization and market transition on the level of entrepreneurship, here measured as the proportion of household firms engaging in retail trade. The empirical findings suggest that marketization and market transition were important determinants of entrepreneurship during China’s early transition period, while local industrial output was an insignificant factor in determining local levels of entrepreneurship. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/1974156
- author
- Uddenfeldt, Fredrik LU
- supervisor
-
- Sonja Opper LU
- organization
- course
- NEKK01 20111
- year
- 2011
- type
- M2 - Bachelor Degree
- subject
- keywords
- Entrepreneurship and competition, Austrian School, China, China's early transition economy
- language
- English
- id
- 1974156
- date added to LUP
- 2011-06-21 10:26:27
- date last changed
- 2011-06-21 10:26:27
@misc{1974156, abstract = {{Economic theory predicts a positive relationship between competition and innovation. Competition both forces and enables firms to innovate. On competitive markets firms are forced to innovate to avoid shrinking profit margins. At the same time competition also helps firms to innovate: On competitive markets information is dispersed among decentralized economic agents through price signals, information that can be used to identify opportunities for economic profit. Lack of competition, leading to a lack of reliable price signals, therefore reduces both the need for innovation and the possibilities for innovation. This thesis applies this strand of theory on China’s early transition from socialism. Data from 295 prefecture-level cities, from 1984 and 1987, are used to test the effects of marketization and market transition on the level of entrepreneurship, here measured as the proportion of household firms engaging in retail trade. The empirical findings suggest that marketization and market transition were important determinants of entrepreneurship during China’s early transition period, while local industrial output was an insignificant factor in determining local levels of entrepreneurship.}}, author = {{Uddenfeldt, Fredrik}}, language = {{eng}}, note = {{Student Paper}}, title = {{From Tradition to Transition: Entrepreneurship, competition, and marketization in China’s early reform process}}, year = {{2011}}, }