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Does Institutional Change in Universities Influence High-Tech Entrepreneurship? Evidence from China’s Project 985

Author

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  • Charles Eesley

    (Stanford University, Department of Management Science and Engineering, Stanford, California 94305)

  • Jian Bai Li

    (Department of Strategy and Policy, National University of Singapore Business School, Singapore 119245)

  • Delin Yang

    (Department of Innovation, Entrepreneurship and Strategy, School of Economics and Management, Tsinghua University, Beijing 100084, China)

Abstract

This paper contributes to institutional theory on cognitive and normative institutional change targeted at altering beliefs, behaviors, and ultimately firm performance. Prior work emphasizes institutional changes where the ideas and beliefs originate from those within the institutional context. Under examined are cases of institutional changes in beliefs and behaviors imposed from outside of the context, which may result in inconsistencies among cognitive, normative, and regulatory institutional pillars. Project 985 was a program implemented by the Chinese government that provided funding for a set of universities to build new research centers. We found that graduates of these universities subsequently expressed greater beliefs in innovation and founded more high-tech ventures, but that entrepreneurs influenced by the reform were not as financially successful as entrepreneurs who founded firms before the reform or from non-985 universities. We explain this surprising finding as caused by the fact that Project 985 was institutionally inconsistent with China’s broader institutional environment. An important implication is that institutional changes may alter beliefs and behavior, but they must be consistent with the broader institutional environment to improve firm performance.

Suggested Citation

  • Charles Eesley & Jian Bai Li & Delin Yang, 2016. "Does Institutional Change in Universities Influence High-Tech Entrepreneurship? Evidence from China’s Project 985," Organization Science, INFORMS, vol. 27(2), pages 446-461, April.
    • Handle: RePEc:inm:ororsc:v:27:y:2016:i:2:p:446-461
    DOI: 10.1287/orsc.2015.1038
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    13. Charles E. Eesley & Robert N. Eberhart & Bradley R. Skousen & Joseph L. C. Cheng, 2018. "Institutions and Entrepreneurial Activity: The Interactive Influence of Misaligned Formal and Informal Institutions," Strategy Science, INFORMS, vol. 3(2), pages 393-407, June.
    14. Charles Eesley, 2016. "Institutional Barriers to Growth: Entrepreneurship, Human Capital and Institutional Change," Organization Science, INFORMS, vol. 27(5), pages 1290-1306, October.
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