Entrepreneurial strategies during institutional changes: Evidence from China's economic transition
Institutional environments influence the effectiveness of entrepreneurial strategies. How should entrepreneurs adopt different strategies at different stages of an institutional change? We tackle this question by examining China’s transition from a planned economy to a market economy. Using data from an alumni survey in China, we find that relationship-based strategies promote firm growth in the early stage, innovation-based strategies appear more effective in the late stage, and locating in science parks benefits firm growth in the intermediate stage. Overall, our study implies that entrepreneurs should adopt different strategies to fit different types of institutional environments. Also, our study provides implications to policymakers that cocoon institutions, such as science parks, may be temporarily effective during the intermediate stage of an institutional change.
