nach oben

Small Business Economics

Erschienen in:

04.01.2018

Financial development and the geographies of startup cities: evidence from China

verfasst von: Fenghua Pan, Bofei Yang

Erschienen in: Small Business Economics | Ausgabe 3/2019

Einloggen

Aktivieren Sie unsere intelligente Suche, um passende Fachinhalte oder Patente zu finden.

search-config

KI-gestützte Suche

Aus

Abstract

It has been widely observed that financial support is the key to entrepreneurial activities. The last decade has witnessed tremendous growth of startups and financial markets in China. Despite “mass entrepreneurship and innovation” becoming a national agenda item in China in recent years, few studies have investigated how financial development is related to entrepreneurial activities across cities in such an emerging economy. Drawing on a unique dataset of over 5000 startups in China, this study investigates the geographical characteristics of startup cities and the role of finance in promoting startups across Chinese cities. We find that there exists significant geographical concentration of startups. Beijing, Shanghai, and Shenzhen are the most important startup cities in the country. Regression results show that strong financial supports from both equity financing and credit financing are beneficial to the development of startups at the regional level. Venture capital availability is found to have very positive effects on the entrepreneurial activities in a city. The agglomeration of startups in financial centers and neighboring regions indicate that there exist strong positive externalities of metropolitan cities where the key financial, political, and technology resources are located.

Vorheriger Artikel Location-based tax incentives and entrepreneurial activities: evidence from Western Regional Development Strategy in China

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

A dataset belonging to the financial company Qingke Group (Zero2IPO) which is a leading financial service company providing detailed information of deals of IPO and venture capital investments. More detailed information on the company can be found at http://www.zero2ipo.com.cn/.

In this study, startups are aggregated at prefectural- and above-level cities.

Only A-share firms are calculated.

Acconcia, A., Monte, A. D., & Pennacchio, L. (2011). Underpricing and firm’s distance from financial centre: evidence from three European Countries. Working papers.

Acs, Z. J., Audretsch, D. B., & Feldman, M. P. (1994). R&D spillovers and recipient firm size. Review Of Economics And Statistics, 76(2), 336–340. https://doi.org/10.2307/2109888.CrossRef

Armington, C., & Acs, Z. J. (2002). The determinants of regional variation in new firm formation. Regional Studies, 36(1), 33–45. https://doi.org/10.1080/00343400120099843.CrossRef

Biggadike, R. (1979). The risky business of diversification. Harvard Business Review, 57(3), 103–111.

Brown, J. R., Fazzari, S. M., & Petersen, B. C. (2009). Financing innovation and growth: Cash flow, external equity, and the 1990s R&D boom. Journal of Finance, 64(1), 151–185. https://doi.org/10.1111/j.1540-6261.2008.01431.x.CrossRef

Brown, J. R., Martinsson, G., & Petersen, B. C. (2013). Law, stock markets, and innovation. Journal of Finance, 68(4), 1517–1549. https://doi.org/10.1111/jofi.12040.CrossRef

Bruton, G. D., & Ahlstrom, D. (2003). An institutional view of China’s venture capital industry: explaining the differences between China and the West. Journal of Business Venturing, 18(2), 233–259. https://doi.org/10.1016/S0883-9026(02)00079-4.CrossRef

Chen, H., Gompers, P., Kovner, A., & Lerner, J. (2010). Buy local? The geography of venture capital. Journal of Urban Economics, 67(1), 90–102. https://doi.org/10.1016/j.jue.2009.09.013.CrossRef

Cheng, F. F., van Oort, F., Geertman, S., & Hooimeijer, P. (2014). Science parks and the co-location of high-tech small- and medium-sized firms in China’s Shenzhen. Urban Studies, 51(5), 1073–1089. https://doi.org/10.1177/0042098013493020.CrossRef

Clark, G. L. (2005). Money flows like mercury: the geography of global finance. Geografiska Annaler Series B-Human Geography, 87B(2), 99–112. https://doi.org/10.1111/j.0435-3684.2005.00185.x.CrossRef

Cook, G. A. S., Pandit, N. R., Beaverstock, J. V., Taylor, P. J., & Pain, K. (2007). The role of location in knowledge creation and diffusion: evidence of centripetal and centrifugal forces in the City of London financial services agglomeration. Environment and Planning A, 39(6), 1325–1345. https://doi.org/10.1068/a37380.CrossRef

Davila, A., & Foster, G. (2005). Management accounting systems adoption decisions: evidence and performance implications from early-stage/startup companies. Accounting Review, 80(4), 1039–1068. https://doi.org/10.2308/accr.2005.80.4.1039.CrossRef

Davila, A., Foster, G., & Gupta, M. (2003). Venture capital financing and the growth of startup firms. Journal of Business Venturing, 18(6), 689–708. https://doi.org/10.1016/s0883-9026(02)00127-1.CrossRef

Delfmann, H., & Koster, S. (2012). Population change and new firm formation in urban and rural regions. Regional Studies, 48(6), 1034–1050. https://doi.org/10.1080/00343404.2013.867430.CrossRef

Doeringer, P., Evans-Klock, C., & Terkla, D. (2004). What attracts high performance factories? Management culture and regional advantage. Regional Science & Urban Economics, 34(5), 591–618. https://doi.org/10.1016/j.regsciurbeco.2003.08.001.CrossRef

El Ghoul, S., Guedhami, O., Ni, Y., Pittman, J., & Saadi, S. (2013). Does information asymmetry matter to equity pricing? Evidence from firms’ geographic location. Contemporary Accounting Research, 30(1), 140–181. https://doi.org/10.1111/j.1911-3846.2011.01147.x.CrossRef

Florida, R., & Kenney, M. (1988). Venture capital and high technology entrepreneurship. Journal of Business Venturing, 3(3), 301–319. https://doi.org/10.1016/0883-9026(88)90011-0.CrossRef

Florida, R., & Mellander, C. (2014). Rise of the startup city: the changing geography of the venture capital financed innovation. Working Paper.

Fritsch, M., & Schilder, D. (2012). The regional supply of venture capital: can syndication overcome bottlenecks? Economic Geography, 88(1), 59–76. https://doi.org/10.1111/j.1944-8287.2011.01139.x.CrossRef

Gartner, W. B., Frid, C. J., & Alexander, J. C. (2012). Financing the emerging firm. Small Business Economics, 39(3), 745–761. https://doi.org/10.1007/s11187-011-9359-y.CrossRef

GEM (2016). Global entrepreneurship monitor. http://www.gemconsortium.org/country-profile/51 Accessed 12 Aug 2017.

Glaeser, E. L. (2007). Entrepreneurship and the city. Ssrn Electronic Journal (32–33), 1626. https://doi.org/10.2139/ssrn.1001108

Gompers, P., & Lerner, J. (2001). The venture capital revolution. Journal of Economic Perspectives, 15(2), 145–168. https://doi.org/10.1257/jep.15.2.145.CrossRef

Guo, Q., He, C. F., & Li, D. Y. (2016). Entrepreneurship in China: the role of localisation and urbanisation economies. Urban Studies, 53(12), 2584–2606. https://doi.org/10.1177/0042098015595598.CrossRef

Hellmann, T., & Puri, M. (2000). Venture capital and the professionalization of start-up firms: empirical evidence. Journal of Finance, 57(1), 169–197. https://doi.org/10.1111/1540-6261.00419.CrossRef

Hittle, L. C., Haddad, K., & Gitman, L. J. (1992). Over-the-counter firms, asymmetric information, and financing preferences. Review of Financial Economics, 2(1), 81.CrossRef

Hsu, P. H., Tian, X., & Xu, Y. (2014). Financial development and innovation: cross-country evidence. Journal of Financial Economics, 112(1), 116–135. https://doi.org/10.1016/j.jfineco.2013.12.002.CrossRef

Ivkovi, Z., & Weisbenner, S. (2005). Local does as local is: information content of the geography of individual investors’ common stock investments. The Journal of Finance, 60(1), 267–306. https://doi.org/10.1111/j.1540-6261.2005.00730.x.CrossRef

Jacobs, J. (1992). The death and life of great American cities. New York: Vintage Books.

Jeng, L. A., & Wells, P. C. (2000). The determinants of venture capital funding: evidence across countries. Journal of Corporate Finance, 6(3), 241–289. https://doi.org/10.1016/S0929-1199(00)00003-1.CrossRef

Ji, F., Chen, W., Yuan, F., & Sun, W. (2013). Development of sci-tech financial system and its spatial impacts on high-tech zone: the case study of Wuxi New District. Geographical Research, 32(10), 1899–1911.

Keeble, D., & Walker, S. (2006). New firms, small firms and dead firms: spatial patterns and determinants in the United Kingdom. Regional Studies, 28(4), 411–427. https://doi.org/10.1080/00343409412331348366.CrossRef

Kerr, W. (2010) Clusters and startup location choice. In Lecture at the Harvard Business School Faculty Research Symposium.

Kum, H., & Karacaoglu, K. (2012). Relationship between entrepreneurship and unemployment in Turkey: a dynamic analysis. Actual Problems Of Economics (138), 399–405.

Lee, Y. C., & Anderson, A. R. (2007). The role of Guanxi in Chinese entrepreneurship. Las Vegas: Usa Info Inc..

Lerner, & Josh. (1999). The venture capital cycle. Cambridge: MIT Press.

Lin, J. Y., & Li, Y. (2001). Promoting the growth of medium and small-sized enterprises through the development of medium and small-sized financial institutions. Economic Research Journal, 1, 10–18.

Lissoni, F. (2001). Knowledge codification and the geography of innovation: the case of Brescia mechanical cluster. Research Policy, 30(9), 1479–1500. https://doi.org/10.1016/S0048-7333(01)00163-9.CrossRef

Loughran, T., Schultz, P., Battalio, R., Bergstrand, J., Huang, R., & Ritter, J. (2006). Asymmetric information, firm location, and equity issuance.

Lu, J., & Tao, Z. (2010). Determinants of entrepreneurial activities in China. Journal of Business Venturing, 25(3), 261–273. https://doi.org/10.1016/j.jbusvent.2008.10.00.CrossRef

Malo, S., & Norus, J. (2009). Growth dynamics of dedicated biotechnology firms in transition economies. Evidence from the Baltic countries and Poland. Entrepreneurship and Regional Development, 21(5–6), 481–502. https://doi.org/10.1080/08985620802332749.CrossRef

Masuda, T. (2006). The determinants of latent entrepreneurship in Japan. Small Business Economics, 26(3), 227–240. https://doi.org/10.1007/s11187-005-0206-x.CrossRef

Megginson, W. L., & Weiss, K. A. (1991). Venture capitalist certification in initial public offerings. Journal of Finance, 46(3), 879–903. https://doi.org/10.2307/2328547.CrossRef

Milana, C., & Wang, J. (2013). Fostering entrepreneurship in China: a survey of the economic literature. Strategic Change, 22(7–8), 387–415. https://doi.org/10.1002/jsc.1947.CrossRef

Mittelstaedt, J. D., Ward, W. A., & Nowlin, E. (2006). Location, industrial concentration and the propensity of small US firms to export—entrepreneurship in the international marketplace. International Marketing Review, 23(5), 486–503. https://doi.org/10.1108/02651330610703418.CrossRef

Moore, B., Tyler, P., & Elliott, D. (1991). The influence of regional development incentives and infrastructure on the location of small and medium sized companies in Europe. Urban Studies, 28(6), 1001–1026. https://doi.org/10.1080/00420989120081171.CrossRef

Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of Financial Economics, 13(2), 187–221. https://doi.org/10.1016/0304-405X(84)90023-0.CrossRef

North, D., & Smallbone, D. (2000). The innovativeness and growth of rural SMEs during the 1990s. Regional Studies, 34(2), 145–157. https://doi.org/10.1080/00343400050006069.CrossRef

Pan, F., & Xia, Y. (2014). Location and agglomeration of headquarters of publicly listed firms within China’s urban system. Urban Geography, 35(5), 757–779. https://doi.org/10.1080/02723638.2014.909112.CrossRef

Pan, F., Zhao, S. X. B., & Wójcik, D. (2016). The rise of venture capital centres in China: a spatial and network analysis. Geoforum, 75, 148–158. https://doi.org/10.1016/j.geoforum.2016.07.013.CrossRef

Pastor, L., & Veronesi, P. (2009). Technological revolutions and stock prices. American Economic Review, 99(4), 1451–1483. https://doi.org/10.1257/aer.99.4.1451.CrossRef

Patricia, M. D., & Robinson, R. B. (1990). New venture strategies: an empirical identification of eight ‘archetypes’ of competitive strategies for entry. Strategic Management Journal, 11(6), 447–467. https://doi.org/10.1002/smj.4250110604.CrossRef

Rajan, R. G., & Zingales, L. (1999). Financial dependence and growth. Social Science Electronic Publishing, 88(3), 559–586.

Rajan, R. G., & Zingales, L. (2001). Financial systems, industrial structure, and growth. Oxford Review of Economic Policy, 17(4), 467–482.CrossRef

Reynolds, P., Storey, D. J., & Westhead, P. (1994). Cross-national comparisons of the variation in new firm formation rates. Regional Studies, 28(4), 443–456. https://doi.org/10.1080/00343409412331348386.CrossRef

Schwienbacher, A. (2007). A theoretical analysis of optimal financing strategies for different types of capital-constrained entrepreneurs. Journal of Business Venturing, 22(6), 753–781. https://doi.org/10.1016/j.jbusvent.2006.07.003.CrossRef

Stam, E. (2010). Entrepreneurship, evolution and geography. In: Boschma R and Martin R. The handbook of evolutionary economic geography, 307–348.

Storper, M. (1997). The regional world: territorial development in a global economy. New York: Guilford Press.

Stuart, T. E., Hoang, H., & Hybels, R. C. (1999). Interorganizational endorsements and the performance of entrepreneurial ventures. Administrative Science Quarterly, 44(2), 315–349. https://doi.org/10.2307/2666998.CrossRef

Walcott, S. M. (2002). Chinese industrial and science parks: bridging the gap. The Professional Geographer, 54(3), 349–364. https://doi.org/10.1111/0033-0124.00335.CrossRef

Welch, I., & Ritter, J. R. A review of IPO activity, pricing, and allocations. In, 2002 (pp. 1795–1828). https://doi.org/10.1111/1540-6261.00478.

White, S., Gao, J., & Zhang, W. (2005). Financing new ventures in China: system antecedents and institutionalization. Research Policy, 34(6), 894–913. https://doi.org/10.1016/j.respol.2005.04.002.CrossRef

Winton, A., & Yerramilli, V. (2008). Entrepreneurial finance: banks versus venture capital. Journal of Financial Economics, 88(1), 51–79. https://doi.org/10.1016/j.jfineco.2007.05.004.CrossRef

Zeng, S. X., Xie, X. M., & Tam, C. M. (2010). Relationship between cooperation networks and innovation performance of SMEs. Technovation, 30(3), 181–194. https://doi.org/10.1016/j.technovation.2009.08.003.CrossRef

Zhang, J. (2008). China’s dynamic industrial sector: the internet industry. Eurasian Geography And Economics, 49(5), 549–568. https://doi.org/10.2747/1539-7216.49.5.549.CrossRef

Zhang, J. (2011). The spatial dynamics of globalizing venture capital in China. Environment and Planning A, 43(7), 1562–1580. https://doi.org/10.1068/a43562.CrossRef

Zook, M. A. (2002). Grounded capital: venture financing and the geography of the Internet industry, 1994-2000. Journal of Economic Geography, 2(2), 151–177. https://doi.org/10.1093/jeg/2.2.151.CrossRef

Titel: Financial development and the geographies of startup cities: evidence from China
verfasst von: Fenghua Pan
Bofei Yang
Publikationsdatum: 04.01.2018
Verlag: Springer US
Erschienen in: Small Business Economics / Ausgabe 3/2019
Print ISSN: 0921-898X
Elektronische ISSN: 1573-0913
DOI: https://doi.org/10.1007/s11187-017-9983-2

Springer Professional

Abstract

Bitte loggen Sie sich ein, um Zugang zu Ihrer Lizenz zu erhalten.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Springer Professional "Wirtschaft"

Weitere Artikel der Ausgabe 3/2019

Migrant entrepreneurship in China: entrepreneurial transition and firm performance

Persistent high-growth firms in China’s manufacturing

Entrepreneurship in China

What types of homeowners are more likely to be entrepreneurs? The evidence from China

Ethnic entrepreneurship, initial financing, and business performance in China

Location-based tax incentives and entrepreneurial activities: evidence from Western Regional Development Strategy in China