Analysis of the Growth Path and Influential Factors of Chinese Private Firms

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  • 中国における私営企業の発展とその制約要因
  • チュウゴク ニ オケル シエイ キギョウ ノ ハッテン ト ソノ セイヤク ヨウイン

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Abstract

Based on a study of private entrepreneurs in the Chinese Yangtze delta area, this article analyzes the major factors influencing the growth of Chinese private firms. The article also explores the influence of these factors on the growth path and business development of private firms. It is found that Chinese private firms typically follow two types of growth path. One is to start from scratch, accumulate business and thus achieve a rolling development. The other is to utilize a variety of social relations to obtain such monopolistic resources as land, franchise rights on the market, etc., all of which are then transformed into capital to develop the firm. Therefore, the basic factors influencing the growth of Chinese private firms are land resources, labor costs, financial capital, and the growth of market demand. Nevertheless, the key factor playing a decisive role in the development of a firm is often the policy support of the government, social networking, etc. Although there is a general lack of basic resources for Chinese private firms, the overall transaction cost of entrepreneurship is not high. Some firms are able to grow rapidly by acquiring key resources. The growth process of private firms, however, is limited by both resource scarcity and growing transaction costs, which restrains the growth of these firms.

Journal

  • Asian Studies

    Asian Studies 57 (4), 3-12, 2011

    Japan Association for Asian Studies

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