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Entrepreneurial attention to deregulations and reinvestments by private firms: Evidence from China

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Abstract

To increase the understanding of entrepreneurship in China and contribute to the view that deregulation facilitates the rapid development of the private sector in transitional economies, we examine the positive relationship between entrepreneurial attention to deregulation (formal institution at the country level) and reinvestment by Chinese private firms. We supplement this main aim by identifying two moderating factors: the entrepreneurs’ political connections (informal institution) and the regional institution development (formal institution at the regional level). We also explore how the interaction of political connections and regional institution development moderate the “entrepreneurial attention to deregulation-reinvestment” link. We find support for our hypotheses from survey data on 3,284 private firms in China. This paper contributes to the research on the relationship between institution and entrepreneurship in general and the association of deregulation and reinvestment in particular by considering two categories of institutional arrangements (formal and informal institutions; national and regional institutions) simultaneously and by exploring the antecedent of reinvestment from a fresh perspective—the attention-based view, highlighting the importance of “noticed” or “perceived” deregulation that influences entrepreneurial decision-making.

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Notes

  1. Please see Table 1 below.

  2. We are grateful to Professor Kevin Zheng Zhou and two anonymous reviewers for their significant contributions in developing this hypothesis.

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Acknowledgments

We appreciate insightful comments and helpful guidance from Kevin Zheng Zhou and two anonymous reviewers in the review process. The study is partially supported by the Nation Natural Science Foundation of China (Grant no. 71672168, 71402056, 71202173), the Natural Science Foundation of Zhejiang Province (Grant no. LY16G020020) as well as the Fundamental Research Funds for the Central Universities (Grant no. XMS02). All views expressed are those of the authors and not of the sponsoring organizations.

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  1. School of Business Administration, Zhejiang University of Finance & Economics, Hangzhou, China

    Weiqi Dai

  2. School of Business Administration, South China University of Technology, Guangzhou, China

    Mingqing Liao

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Dai, W., Liao, M. Entrepreneurial attention to deregulations and reinvestments by private firms: Evidence from China. Asia Pac J Manag 36, 1221–1250 (2019). https://doi.org/10.1007/s10490-018-9574-z

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