Working Papers

China Business Group Working Paper Series

  • Inclusive Growth and SME Finance in China 01/01/2013

    Wei Li, Hans Hendrischke

    In spite of China's official promotion of inclusive growth, how to achieve it is an under-researched area. This paper contributes to the Chinese policy debate on inclusive growth by emphasizing the largely neglected role of local governments and the local private enterprise sector. We point out that although central intervention has led to spectacular achievements in poverty reduction over the past two decades, central policies alone are not sufficient to fill the local resource gap to achieve inclusive growth. Instead, by taking a local institutional perspective, we explore two reform trajectories relevant for achieving inclusive growth under decentralization: the role of local governments and the importance of private enterprise and enterprise finance in China. In particular, the role of local governments is undervalued in the current top-down policy debate which focuses on central policy initiatives, but overlooks the inability of the central government to fund policy initiatives at the local (county and township) level. Enterprise finance for the local SME sector is a well-known bottle-neck for local enterprise development. The top-down perspective envisages a long-term solution in a gradual process of reforming the banking system and the stock market. The institutional perspective in contrast is able to point to the systemic role of informal finance and to suggest institutional trajectories which suggest alternative reform paths to secure local enterprise finance.

  • Institutional Entrepreneurship and Female Empowerment: Women Entrepreneurs in China 01/11/2012

    Hans Hendrischke, Wei Li

    Research generally recognizes that entrepreneurship can empower women in otherwise male dominated societies, but whether there is a specific form of women entrepreneurship remains controversial. We provide a tentative answer by arguing that China¿¿¿s emerging market environment provides an opportunity set that empowers women¿¿¿s agency in institutional entrepreneurship as women face fewer disadvantages in institutional entrepreneurship than in resource-based and industry-based entrepreneurship traditionally dominated by men. In contrast to development and firm-based literature, we link empowerment not to development outcomes or firm size, but to the realisation of social and personal outcomes. Women entrepreneurs can use the inherent flexibility of institutional entrepreneurship to realise social preferences and life style choices otherwise foreclosed to them. For example, by recombining economic and social resources to create new corporate structures, women are able to be single and have an acceptable social status or to be in control of their work life and have a family, as we show in two case studies.