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Entrepreneurship in China

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Entrepreneurship in China
Canfei He & Jiangyong Lu & Haifeng Qian

Accepted: 10 December 2017

Abstract China’s economic transition has greatly China’s national and regional entrepreneurship sys-
unleashed entrepreneurship and private enterprise tems in future research.
development since the 1980s. In this article, we
review the recent literature on entrepreneurship in Keywords Entrepreneurship . China . Institutions .
China and summarize 11 articles included in this Economic development
China special issue. Our literature review shows that
the unique institutional and cultural settings behind JEL classification L26 . M13 . O1 . O3
the Chinese economy have led to some distinct
perspectives of studying entrepreneurship. The arti-
cles included in this special issue further advance
1 Introduction
the entrepreneurship research embedded in the Chi-
nese context and shed lights on entrepreneurship
The past three decades have witnessed remarkable
policy in emerging economies. Most recently, China
entrepreneurship development in China. China’s
has recognized entrepreneurship as one of the key
economic transition from a planned economy to a
driving forces of sustained economic development
market economy began in 1978 when Reform and
and is accordingly making many efforts to encour-
Opening-Up policies were introduced. The Chinese
age and facilitate entrepreneurial activity. Following
Constitution did not recognize the legitimacy of
this new development, it is imperative to study
private enterprises until 1988, though individual
household businesses (known as getihu in China)
and collectively owned town-and-village enterprises
(TVEs, known as xiangzhenqiye in China) had been
C. He
flourishing before then (Li 2013). Since 1992, the
College of Urban and Environmental Sciences, Peking University,
Beijing 100871, China private sector has experienced remarkable growth
e-mail: hecanfei@pku.edu.cn and surpassed the state-owned and collectively
owned enterprises as the driver of the Chinese econ-
J. Lu
omy (He 2009). China’s economic reform can large-
Guanghua School of Management, Peking University, R476,
Building #2, Beijing, China ly be attributed to unleashing entrepreneurship by
e-mail: lujiangyong@gsm.pku.edu.cn removing or lowering institutional barriers to market
entry and private business development.
H. Qian (*)
School of Urban and Regional Planning, The University of Iowa,
Along with the incremental institutional reform and
338 Jessup Hall, Iowa City, IA 52242, USA economic transition, Chinese entrepreneurs have also
e-mail: haifeng-qian@uiowa.edu been evolving. Yang and Li (2008) suggest three phases
 C. He et al.

of entrepreneurship development in the transition pro- included. We also argue that, under the new national
cess. At the beginning of the transition when market economic development strategy that has taken entrepre-
rules are underdeveloped (phase I), Chinese entrepre- neurship as the key focus, it is imperative to study the
neurs focus on securing financial and other resources to Chinese entrepreneurship systems in future.
start new firms. Informal institutions such as social
networks, known as guanxi in China, are critically im-
portant to new venture performance. At the early stage 2 Literature review: entrepreneurship in China
of the transition when market rules are being established
(phase II), entrepreneurs build competitive advantage The multidisciplinary strand of literature on entrepre-
for their firms via cost reduction. Personal networks still neurship in China has traditionally focused on the im-
matter in securing input and other resources, but the pact of the institutional context of China—a transition
strategy and management of companies increasingly economy—on entrepreneurship at the individual, firm,
gain value. At the late stage of the market transition regional, and national levels. As noted in the introduc-
when market rules are well in place (phase III), entre- tion, entrepreneurship in China has made great progress
preneurs recognize that innovation promotes long-term since the initiation of China’s Reform and Opening-Up
competitive advantage and therefore actively develop policies. The institutional context for entrepreneurial
new products, services, or technology. Today, most sec- activities has gradually transformed from one dominated
tors can be categorized in phase III, especially in the by a command economy to an increasingly market-
information and communications technology (ICT) in- oriented economy, giving rise to an institutional land-
dustry. China has some of the most innovative ICT firms scape that differs from that of developed countries.
in the world, with notable examples such as Alibaba, There is a need to acknowledge the importance of
Baidu, and Tencent. The maturity of entrepreneurship China’s peculiar economic, social, political, and cultural
development also makes China the second largest pro- context while reviewing this strand of literature.
ducer of Bunicorns^––startups that are valued at above
one billion US dollars (Tse 2016). 2.1 Entrepreneurship in a transitional economy
Entrepreneurship development in China is entering a
golden era. Since 2015, Bmass entrepreneurship and China’s economic transition is characterized by the
innovation^ has emerged as the new national economic threefold process of marketization, globalization, and
development strategy, and Chinese central and local decentralization, resulting in a dynamic institutional
governments are devoting tremendous amounts of re- context for entrepreneurial activities (He et al. 2016).
sources to startups, especially innovative ones. Al- Entrepreneurs in China thus face both more opportuni-
though public support for private enterprises exists, ties and more uncertainties than their counterparts in
preferential policies have traditionally leaned towards more developed economies. It has been confirmed that,
state-owned and foreign-owned enterprises. A new State when compared to the developed economies, entrepre-
Council document distributed in July 2017 requires neurship in China has been more dramatically affected
various ministries to lead or support entrepreneurship by the institutional landscape (Lu and Tao 2010). Insti-
and innovation initiatives (State Council of People’s tutions, considered as the rules of the game in a society
Republic of China 2017). (North 1990), affect entrepreneurial behavior, and new
Under this background, research on entrepreneurship ventures and startups must adjust their structures and
in China is also gaining momentum. Before 2005, there operations to comply with institutional forces. China’s
was limited research regarding this topic published in economic transition has lifted the constraints on entre-
mainstream management or entrepreneurship journals preneurship and provided an increasingly free and open
(Yang and Li 2008). This has changed in recent years. business environment, leading to a boom of entrepre-
This special issue represents the newest efforts to un- neurship (He et al. 2008, 2016). Recent studies have
derstand entrepreneurship in China. It is a timely collec- examined the role of China’s institutional arrangements
tion that we expect to significantly advance the frontier in this process by focusing specifically on, for example,
of China entrepreneurship studies. In this introduction to China’s excessive government regulations (Zhuang
the special issue, we primarily review recent literature 2005), financial system and financial development
on entrepreneurship in China and discuss each article (Elston et al. 2016; Hasan et al. 2015; Huang et al.
Entrepreneurship in China

2016), property rights (Zhou 2014), ownership structure that entrepreneurs’ age, gender, and educational back-
(Pang and Li 2011), institutional loopholes (Yang 2004), ground may affect their management decisions (Li et al.
and the legal system (Fuller 2010). 2009b; Liu et al. 2013; Pistrui et al. 2001; Tan 2001; Wei
Transitional economies often have underdeveloped and Ling 2015; Wright et al. 2008; Yin et al. 2015;
formal institutions, along with some informal institu- Zhang 2017). For example, Liu et al. (2013) emphasize
tions as substitutes for the institutional voids (Puffer the relevance of entrepreneurs’ gender difference,
et al. 2010). Hence, attention should also be paid to the showing that female entrepreneurs are more likely to
impact of informal institutions such as culture and set up necessity entrepreneurship than opportunity en-
social capital/networks, as in China entrepreneurial trepreneurship. Entrepreneurs’ living or study experi-
activities are often embedded in and co-shaped by ence in foreign countries (Wright et al. 2008), work
formal and informal institutional arrangements (Puffer experience (Li et al. 2009b), political connections (Wei
et al. 2010). and Ling 2015), and financial literacy (Yin et al. 2015)
One of the most important dimensions of informal also matter. This strand of literature reports the follow-
institutions is associated with China’s culture, which ing findings: experienced entrepreneurs outperform
plays a fundamental role in shaping value orientations novices in developing networks and managing organi-
and entrepreneurs’ cognition (Holt 1997; Busenitz and zations, returnee entrepreneurs and CEOs with foreign
Lau 2001; Mitchell et al. 2002; Zapalska and Edwards experience tend to be more successful, and entrepre-
2001). Psychological characteristics of entrepreneurs, neurs with more financial academic knowledge are more
such as their risk-taking propensity, are largely affected likely to start new businesses. While exploring the role
by the general cultural context and China’s BConfucian of entrepreneurs’ personal attributes, these studies have
values and ethics^ in particular (Tan and Chow 2009; also situated their analyses in China’s institutional con-
Zapalska and Edwards 2001). In some cases, the cul- text. The theoretical perspectives employed in these
tural context has co-shaped firm behavior, along with studies include management theories, social cognition
formal institutions, in some subtle but substantive theories, and institutional theories.
ways (Ahlstrom and Bruton 2002; Bruton and
Ahlstrom 2003). 2.3 Corporate entrepreneurship and firm performance
Social capital is dependent on the strength of social
networks and the amount of resources inherent in them The constructs of corporate entrepreneurship or
(Batjargal and Liu 2004). In China, social capital is intrapreneurship (e.g., product innovation, venturing,
often used as a substitute for formal institutional sup- and strategic renewal) have been examined to under-
port, providing an alternative way to access resources stand how entrepreneurship is also of vital importance to
(Peng and Luo 2000). Social capital in China has been existing firms (An et al. 2017). Questions such as how
viewed as an indigenous social phenomenon known as corporate entrepreneurship affects firm performance are
guanxi. Some studies have sought to understand the widely discussed. This strand of literature focuses on the
ways in which social networks or guanxi influences ways in which corporate performance is shaped by
investment decisions, firms’ survival likelihood, financ- corporate entrepreneurship (Li et al. 2006; Su et al.
ing source acquisition, business opportunities, and com- 2015) as well as other factors such as market orientation
petitive advantage (Batjargal 2007; Batjargal and Liu and inter-firm learning (An et al. 2017; Deshpandé and
2004; Ellis 2011; Park and Luo 2001; Troilo and Zhang Farley 2000; Liu et al. 2002, 2003; Sin et al. 2000),
2012; Wang 2016; Xin and Pearce 1996; Zhang 2015). organizational learning, innovation, and capability
In short, entrepreneurship must be perceived as being (Jiang and Zhao 2006; Yang et al. 2017; Yu et al.
socially embedded in China’s peculiar social networks 2013). The interactions of these factors and their influ-
and informal institutional context. ence on corporate performance should be considered to
better understand entrepreneurship at the firm level.
2.2 Entrepreneurs: decision makers with characteristics Firm strategy is another key topic in this strand of
literature. Firm strategies also co-evolve with China’s
Entrepreneurs’ personal attributes such as demographic idiosyncratic institutional context. Firm strategic choice
characteristics, cognitive ability, and behavior are also theories are used to explore the strategies adopted by
vital for firm performance. Many studies have shown Chinese enterprises (Boisot and Child 1999; Davies and
 C. He et al.

Walters 2004; Keister 2002; Lukas et al. 2001; Peng entrepreneurship. For example, Yang et al. (2014) ex-
2003; Luo et al. 1998; Tan and Tan 2005). The effec- amine the spatial spillovers of entrepreneurship at the
tiveness of firm strategies is one of the key focuses in provincial level using spatial panel models and report
these studies. Specific strategies regarding organization- positive knowledge spillover effects between entrepre-
al structure (Lin and Germain 2003), outside directors neurs in neighboring provinces.
(Peng 2004), financial strategy (Keister 2004), customer Entrepreneurship studies in China are booming
orientation (Reid and Xu 2012), and strategic alliance alongside the emergence and prosperity of China’s en-
(Hitt et al. 2004) have been examined. trepreneurial activities. This could be a fertile area for
future research, in which we can not only test the appli-
2.4 Entrepreneurship and economic development cability of theories, methodologies, and perspectives
developed based on developed economies but also shed
The relationship between entrepreneurship and econom- new light on extant entrepreneurship theoretical frame-
ic development has been widely studied in China’s works, thanks to China’s unique institutional context as
institutional context, following the tradition of a transition economy.
Schumpeterian creative destruction (1934). The rapid
growth of private and semi-private enterprises is often
seen as the driving force of China’s economic miracle, 3 The articles
as private entrepreneurship has contributed greatly to
technology innovation, employment, and regional pro- The 11 articles included in this special issue offer new
ductivity (Chen and Feng 2000; Li et al. 2009a, 2012, and promising insights into a deeper understanding of
2015; Zhuang 2003). Furthermore, the shift in economic entrepreneurship in China. The contributors represent a
growth patterns is also dependent on entrepreneurship diverse group of scholars from the fields of economics,
development (Zheng and Zeng 2009; Zhuang 2005). management, geography, and public policy. Each article
For example, the allocation of resources between pro- focuses on a specific aspect of Chinese entrepreneurship
ductive activities and unproductive rent-seeking activi- and employs a unique conceptual framework and
ties is closely associated with entrepreneurship (Zhuang methodology that can best answer its research questions.
2007). Finally, the development of entrepreneurship The article by Moschella et al. (2018) links the per-
could even determine the overall success of China’s sistence of the high growth of firms with some crucial
economic transition (McMillan and Woodruff 2002; dimensions of firm structure and performance. They
Zhang and Sheng 2014). argue that existing work tends to focus on the charac-
Related to economic development, the uneven spatial teristics of high-growth firms, while the attention in this
distribution of entrepreneurship has attracted some article is paid to the long-run capability of high-growth
scholarly attention as well. He et al. (2016), for example, firms to replicate their high-growth performance over
analyze the spatial pattern of entrepreneurship in China, time. By using China’s manufacturing data, they find
providing a comprehensive description of the geograph- that none of the considered firm attributes stands out as
ical dynamics of entrepreneurship during 1998–2007. distinctive features of persistent high growth. The main
Factors such as industrial agglomeration and market findings challenge most theories on firm-industry dy-
structure should be scrutinized to understand regional namics, which typically consider idiosyncratic specific-
variations in entrepreneurship in China (Guo et al. ities of firms as the key drivers of their sustained growth.
2014). Guo et al. (2016) further recognize that localiza- They thus cast doubt on the long-run contribution of
tion economies facilitate entrepreneurship, while the high-growth firms and conclude that high growth may
effects of urbanization economies are mixed. This study simply be seen as a random process. Along with this
also shows that the clustering of small firms tends to conclusion, they suggest that policy initiatives
have a larger effect on entrepreneurship. Qian (2010) supporting high-growth firms may exert only short-run
also investigates the geographic distribution of entrepre- effects on the economy. A promising avenue for future
neurial activities in China and reports the contributions research would be to identify the causal interpretations
of knowledge factors such as human capital, patents, of their econometric results.
and high technology. Moreover, spatial econometrics is The next two articles are related to the clustering of
employed in the study of spatial spillover effects of firms. Zhu et al. (2018b) apply and extend Duranton and
Entrepreneurship in China

Overman’s model on localization and examine whether level microdata from China’s Urban Household Sur-
and how the level of entrepreneurship explains the pres- vey (UHS) suggest that while owners of market hous-
ence, size, and strength of industrial clusters in China. ing do not differ much from renters in terms of the
They define an industrial cluster as a circular area with a odds of entrepreneurial entry, owners of privatized
high level of firm concentration over counterfactuals. public housing are associated with significantly less
This method allows them to delimit clusters and identify propensity for entrepreneurial engagement and owners
their location and size. They also propose an approach to of inherited housing are correlated with a much higher
measuring local entrepreneurial potential. Econometric prevalence of entrepreneurship. In addition, the authors
results confirm that entrepreneurship contributes signif- suggest that the associations between homeownership
icantly to the cluster formation, size, and strength. The and entrepreneurial engagement vary with housing
causality remains strong even when they control for the value. Previous research ignored the possible
inertia in cluster development. Their findings are also heterogeneity of the correlations between distinct types
consistent with the New Economic Geography (NEG) of homeownership and entrepreneurship, thus leading
theory, which stresses that clusters benefit from access to inaccurate predictions as to how entrepreneurship
to seaports, agglomeration economies, and access to may thrive along with the trends and contexts of the
market. The results are robust to alternative measures local housing market in China. The article fills this
of entrepreneurship and instrumental variables. Finally, research gap.
they highlight the role of institutions, government The article by Lin and Wang (2018) addresses an
policies, and legal systems. important research question on business failures. It uses
Zhu et al. (2018a) investigate the local knowledge the entrepreneurial intention model as the theoretical
spillover effects from related industries on manufactur- framework and introduces the Btime of re-venture,^
ing firms in China under its special institutional settings. i.e., the interval between a prior business failure and
Built on the most recent Evolutionary Economic Geog- serial entrepreneurship, as a measure of the re-venture
raphy (EEG) literature and using a comprehensive sur- speed of serial entrepreneurs. Based on a sample of 268
vey database of Chinese manufacturing firms, their re- serial Chinese entrepreneurs, the authors test the rela-
gression analysis provides evidence that localized tionship between a serial entrepreneur’s age and re-
knowledge spillovers from technologically related in- venture speed and the moderating effects of failure loss
dustries do exist and contribute to firm growth, which is and family support. The article contributes to the serial
consistent with the empirical EEG literature in different entrepreneurship theory by taking the age of entrepre-
geographical contexts. They further advance the litera- neurs into the research on serial entrepreneurship. The
ture by considering the Chinese institutional settings, authors show how the age of serial entrepreneurs affects
such as firm ownership. They find that the spillover their re-venture behavior under the moderating effects of
effects come from the clustering of related private- the prior failure loss and family support. The results of
owned enterprises (POEs) but not related state-owned this article enhance our understanding of the principles
enterprises (SOEs) or related foreign-owned enterprises and mechanisms behind serial entrepreneurial behavior.
(FOEs), even though the latter two types of firms have The article also contributes to theories on business
long gained preferential policies from Chinese govern- failure by studying the process of learning and recovery
ments. This finding has important policy implications from failure.
and calls for more public support of POEs. Moreover, Yang et al. (2018) takes the entrepreneurial effectua-
they also find that the spillover effects are moderated by tion perspective to test the relationship between entre-
regional institutional factors associated with a transition preneurial cognitive processes and entrepreneurial ac-
economy, such as marketization, globalization, and tivities. Effectuation and causation are the two main
decentralization. cognitive streams of logic that entrepreneurs follow in
The following two articles focuses on individual their decision-making processes. Meanwhile, search
factors associated with startup activities. The research and execution are two fundamental activities that firms
by Chen and Hu (2018) highlights a previously un- conduct in their day-to-day operations. However, no
documented observation regarding the heterogeneity of research has examined the relationship between the
the association between entrepreneurship and two entrepreneurial cognitive processes or the two en-
homeownership. Analyses based on large individual trepreneurial activities. The article builds a connection
 C. He et al.

between entrepreneurial cognition and lean startup prac- minority groups in startup activity and entrepreneurs’
tices by empirically examining the relationship between financial access. Relying on a unique, large-scale house-
entrepreneurial theories of effectuation and entrepre- hold survey dataset, Howell finds that Han households
neurial practices––that is, search and execution––based are more likely to own an SME, especially when com-
on a sample of 160 Chinese firms. The authors find that pared with Uyghur households. Moreover, Uyghur
firms conducting more search activities exhibit higher households with an SME have less access to both formal
profitability. However, such a positive effect of search finance (i.e., loans from formal financial institutions like
on profitability will disappear when the firm is older, at banks and credit unions) and informal finance (i.e.,
which point, more search will decrease the profitability borrowing from family, friends, or informal financial
performance. institutions) than the Han majority. However, these find-
The following three articles focus on some social ings cannot confirm discrimination against the Uyghur
aspects of entrepreneurship in China. Liu et al. (2018a) minority; it is likely that Uyghur households are less
explore rural migrants’ entrepreneurial formation and active in seeking external financing. Nevertheless, it
transition. As China initiates the national strategy of rings the alarm that discrimination might exist. It is
Bmass entrepreneurship and innovation^ to tap into the important to address disparities in accessing entrepre-
innovative potential and promote entrepreneurial devel- neurial finance, as Howell also reports that minority-
opment among the public, rural migrants in urban areas operated businesses do not perform significantly worse
are considered as one of the targeted groups of this than Han-operated businesses if granted the same level
policy. They find that rural migrants in China are more of financial access.
likely to engage in entrepreneurial activities than their The article by Liu et al. (2018c) focuses on the
urban counterparts who live in cities and their rural relationship between religion and entrepreneurship in
counterparts who remain in the rural areas. Several China. It is one of the first studies to examine whether
factors contribute to the entrepreneurial activities of and how having a Buddhist entrepreneur may impact
migrants. For instance, being a Communist Party mem- new venture performance. They argue that entrepre-
ber and having a low educational attainment seem to neurs’ association with Buddhism helps startups by
reduce the likelihood of rural migrants’ entrepreneurial building social and political capital, growing corporate
entry, whereas a broader social network encourages social responsibility, and adopting a long-term business
startup activities. One notable finding unique to rural vision. Their empirical analysis based on a sample of
migrants is the significant and positive role of commu- 1032 young firms in China supports the positive rela-
nity trust in their entrepreneurial career. Further analysis tionship between having a Buddhist entrepreneur and
of migrant-owned businesses reveals their over- young firms’ performance measured by sales and profit.
representation in the main-street industrial sectors Perhaps more interestingly, they also find a positive
(wholesale, retail, and food) but with comparable firm mediating effect of risk taking: firms with Buddhist
performance, indicating their positive economic contri- entrepreneurs are more likely to engage in risk-taking
bution in cities. According to the authors, more specific activity such as R&D and debt financing, which further
policies and programs need to be designed to help contribute to their performance. This contrasts with
China’s migrant entrepreneurs. They also call for more other research reviewed by the authors that associates
research on the challenges the migrants face in their Western religions with risk aversion. Buddhist culture
entrepreneurial activities and to evaluate the effective- such as impermanence and equanimity appears to better
ness of relevant supportive government policies. tolerate risk. This research not only provides ample
Anthony Howell’s article (Howell 2018) lies at the information on the religious characteristics of Chinese
intersections of ethnicity, entrepreneurship, and finance entrepreneurs but also advances our understanding on
in China. More than 100 million people belong to one of the relationship between different religions and
the 55 ethnic minority groups in China, albeit less than entrepreneurship.
10% of the Chinese population. Racial discrimination in The last two articles in this issue study the geography
accessing startup financing is well documented in the of startups in China from the perspectives of tax
USA. Given the Chinese government’s emphasis on incentives and financial development, respectively. Liu
harmony among different ethnic groups, it is imperative et al. (2018b) evaluate the effect of tax incentives on the
to see the differences between the Han majority and entrepreneurial activities using China’s Western
Entrepreneurship in China

Regional Development Strategy (WRDS) as a policy application of the lean startup model in the Chinese
experiment. This policy introduces a reduction of cor- context, the social/cultural dimensions of Chinese entre-
porate income taxes for firms in western China since preneurship, entrepreneurship policy, and entrepreneur-
2000 if they belong to certain sectors encouraged by the ial financing. These articles also shed lights on building
state. By constructing contiguous county pairs on the a vibrant entrepreneurial economy in China, as
border of WRDS, they conduct a triple difference-in- discussed in their policy implication sections. It is our
difference estimation. The results show that counties hope that this collection of research provides valuable
that received the tax reduction and exemption policy input for both scholars and policy makers.
have experienced a larger increase in the entry of new Entrepreneurship in China has been an interesting
private firms after the implementation of the WRDS in research area especially because of transitional China’s
2000. In addition, there is a distance decay effect. exceptional institutional settings. It will continue to be a
Finally, they point out that the effects of tax incentives promising research area, even though the economic
on attracting new entrants are larger in counties in transition process from a command economy to a mar-
targeted western areas with a strong local industrial base ket economy is approaching its end. China’s recent
and favorable market conditions. In other words, such adoption of Bmass entrepreneurship and innovation^ as
effects are dependent on local economic and institution- the key economic development strategy is unleashing
al conditions. entrepreneurial spirit and encouraging startup activity at
The article by Pan and Yang (2018) describes the unprecedented levels. Numerous policies, initiatives,
economic geography of entrepreneurial financing in and programs are being implemented at both national
China. They present the spatial distribution of startup and subnational levels, providing golden opportunities
activity measured by the number of firms listed in the for scholars to study national and regional entrepreneur-
National Equities Exchange and Quotations (NEEQ) ship systems (Acs et al. 2014; Qian et al. 2013) and to
across Chinese cities. NEEQ was launched in 2013 by evaluate the effectiveness of various entrepreneurship
the Chinese central government to support entrepreneur- policies and practices. Research efforts towards these
ship, providing a platform where startups can list their directions are imperative.
shares. At the end of 2015, more than 5000 Chinese
startups were included in NEEQ. Large, star cities, such Acknowledgements The articles included in this special issue
as Beijing, Shanghai, and Shenzhen, benefit the most were presented in the International Workshop on Entrepreneurship
in China held in Peking University on October 14–5, 2016, co-
from this platform and record the highest numbers of organized by Canfei He, Jiangyong Lu, and Haifeng Qian, who
NEEQ-listed firms. Pan and Yang also study the effect also serve as the guest editors of this special issue. The guest
of regional financial development on startup activity in editors would like to thank Zoltan Acs, Editor-in-Chief of Small
Chinese cities. Their multivariate analysis shows equity Business Economics, for his support of this special issue. He was
also the keynote speaker of the workshop. Canfei He acknowl-
financing, credit financing, and venture capital are edges the support by the National Science Fund for Distinguished
all positively associated with the regional stock of Young Scholars from the National Natural Science Foundation of
NEEQlisted firms. Equity financing demonstrates a China (no. 41425001). Jiangyong Lu acknowledges the support by
greater effect on startup activity than credit financing. the National Natural Science Foundation of China (nos. 71472010
and 71525004).
The effects of these three indicators of financial devel-
opment are even stronger for ICT startups.

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