Abstract

Investigating corporate entrepreneurship in an emerging economy of China, this research proposes and substantiates an integrative framework that characterizes determinants for corporate entrepreneurship (institutional, organization-specific, and strategic market factors) and consequences of entrepreneurship (sales growth and market share performance). Our empirical results indicate that internationalization, firm size and age, and market orientation all impact on the practice of corporate entrepreneurship, which in turn contributes to superior performance. Empirically, this paper provides initial evidence demonstrating the multifaceted determinants of corporate entrepreneurship in a transition economy. Our findings suggest that the Chinese firms appear to be integrating institutional changes and market-oriented activities to facilitate organizational growth.

Introduction

In the context of Western economies, extensive research has been done to investigate the practice of corporate entrepreneurship (e.g., Daily et al., 2002; Gartner and Birley, 2002; Ireland et al., 2001; McDougall and Oviatt, 2000; Peng, 2001; Zahra et al., 1999). There is much empirical evidence that corporate entrepreneurship leads to superior performance in the Western and developed economies (Miller, 1987; Miller and Friesen, 1983; Morris and Paul, 1987; Zahra, 1991; Zahra and Covin, 1995).

However, much less is known about the increasing importance of entrepreneurial firms in emerging economies. In contrast to the more developed economies, emerging economies are characterized by social and economic transformations in an institutional and market environment that is substantially different from that in a Western economy (Batra, 1997; Deng and Dart, 1999; Deshpande´ and Farley, 2000). For instance, since its open-door policies in 1979, China has experienced a smooth and rapid transition from a government-controlled economy to a market-driven one. With an average of 9% of real GDP growth for the past 20 years, China is the largest transitional and fastest-growing economy. In the year 2001 alone, it attracted more than 26,140 foreign investment (FI) projects with $69.2 billion contract value of world widely as the second largest FI recipient country (www.uschina.org).