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A new business ecosystem for SMEs development in China: Key-node industry and industrial net

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  • Binglei Zhang
  • Kamal Argheyd
  • Rick Molz
  • Bin He

Abstract

After 2009, the economic phenomenon of Taobao villages appeared in China, whose economic growth started to decline, but the number of small- and medium-sized enterprises (SMEs) grew at an astonishing rate. Based on a case study of Taobao villages, we found that a new industrial-organizational structure had developed within the traditional e-commerce model. This industrial-organizational structure, which we termed, a key-node industry and industrial net (KIIN) system, is unique in the world. A key-node industry is a platform that integrates logistics, information flow, and capital flow. It reorganizes the traditional industrial-chain structure and is connected with the traditional industrial chains to form a network industrial-organizational model, which can become an industrial net. Through an analysis using the differences-in-differences model, we verify the hypothesis that the KIIN system can improve the efficiency of resource allocation by building a more competitive organizational structure and then improve the production efficiency.

Suggested Citation

  • Binglei Zhang & Kamal Argheyd & Rick Molz & Bin He, 2023. "A new business ecosystem for SMEs development in China: Key-node industry and industrial net," Journal of Small Business Management, Taylor & Francis Journals, vol. 61(6), pages 3046-3076, November.
  • Handle: RePEc:taf:ujbmxx:v:61:y:2023:i:6:p:3046-3076
    DOI: 10.1080/00472778.2021.1970174
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