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Institutional Environment and Entrepreneurial Firm’s Growth:An Empirical Study in China
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TitleInstitutional Environment and Entrepreneurial Firm’s Growth:An Empirical Study in China  
AuthorHe Xiaogang,Lv Feifei,Deng Hao, Li Xinchun and Zhu Lina  
OrganizationShanghai University of Finance and Economics;Management School, Sun Yat-sen University;;; 
Key WordsInstitutional environment, Entrepreneurial performance, Entrepreneurial exit, Networks with the acquaintances and strangers 
AbstractInstitutional environment affects the entrepreneurship and the growth of entrepreneurial firms, but how the different types of institution influence the efficiency and exit of entrepreneur is still an unsolved problem. Based on Williamson’s institutional hierarchy theory and other related intuition theories, we subdivide the institutions into three parts: corruptions, property rights and regulations. Based on the survey data in China, we draw the main conclusions as follows: First, the different kinds of institutions affect the efficiency of new ventures in different ways. In particular, corruptions improve the efficiency of new ventures, but the voids of property rights decrease the efficiency of new entrepreneurial ventures; meanwhile, the relationship between the government regulations and the efficiency of new ventures is inverted U-shaped, which means that only a modest level of government intervention is conducive to the growth of new ventures. Second, corruption, the voids of property rights and government intervention all significantly increase the entrepreneurs’ motivation to sell the enterprises or close the business, which means that the higher corruption, weaker property rights and great government activity, the less continuation of entrepreneurship. Third, one of the reasons why the institutions affect the entrepreneurial efficiency and exit is due to the effect of the founders’ networks with the acquaintances or strangers. This network plays an underestimated mediation role, which means that entrepreneurs will choose different networks under different institutional environment, while the different networks hint to different costs and benefits. 
Serial NumberWP1097 
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