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Innovation or Rent‐seeking: The Entrepreneurial Behavior during China's Economic Transformation

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  • Jinglian Wu
  • Shaoqing Huang

Abstract

Although achieving impressive economic growth during the economic reform period, China has been plagued by rampant corruption and a widening income gap. How can the coexistence these two phenomena be explained? In this paper, we argue that before 1994, the coexistence was induced by a series of expediential institutional arrangements to stimulate entrepreneurial activities and after 1994, it was entrenched because of the slow progress in the overall reform toward becoming a market economy and because of inappropriate government actions and the lack of government action in institutional building. To solve these problems, economic and political reforms need to be accelerated to improve market institutions and to establish the rule of law.

Suggested Citation

  • Jinglian Wu & Shaoqing Huang, 2008. "Innovation or Rent‐seeking: The Entrepreneurial Behavior during China's Economic Transformation," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 16(4), pages 64-81, July.
    • Handle: RePEc:bla:chinae:v:16:y:2008:i:4:p:64-81
    DOI: 10.1111/j.1749-124X.2008.00122.x
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    Cited by:

    1. Son Ngoc Chu & Ligang Song, 2015. "Promoting Private Entrepreneurship for Deepening Market Reform in China: A Resource Allocation Perspective," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 23(1), pages 47-77, January.
    2. Sergio Ochoa Jiménez & Alma Rocío García García & Beatriz Alicia Leyva Osuna & Sacnicté Valdez del Río, 2021. "Entrepreneurial Behavior of SMEs and Characteristics of the Managers of Northwest Mexico," Social Sciences, MDPI, vol. 10(1), pages 1-15, January.

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