Using the comprehensive 2000 and 2002 surveys of Chinese entrepreneurs conducted by theNational
Association of Private Entrepreneursand theChinese Academy of Social Sciences, we examine the
characteristics and financial performance of private enterprises in China. Entrepreneurs, on average,
are 40 years old and many are well-educated; more than one-third of them have a college degree or
higher. Their companies are young, with an average ageof six to seven years. Entrepreneurs contribute
most of the equity capital to the private firms, which in general, are profitable with an average return
on assets of 16 percent in 2002 and 11 percent in 2000.Further empirical analysis demonstrates the
important impact of social, financing and human capital on firms’ financial performance. We find that
social capital (measured by charitable contributions), financing capital (measured by the equity-to-total
capital ratio), and human capital have significant effects on firm profitability, and younger entrepreneurs
tend to be more successful in the new Chinese market economy.
Keywords: Private enterprises; Chinese entrepreneurs; social capital; financial capital; human capital.
1. Introduction
Since China’s economic reforms in 1979 from a centrally planned to a market-oriented econ
omy, its annual economic growth has been around 9 percent over the past three decades, a
startling result to many academicians and policy-makers worldwide (Fung, Pei and Zhang,2006; Gordon and Li, 1991). An important element in China’s economic reforms is pri
vatization, and private enterprises have made substantial contributions to China’s Chinese
economic growth (Andersonet al., 2003).vs2010+水晶报表如何在一个Winform项目中添加报表
China’s entrepreneurship activities emerged as a major economic growth and employ
ment growth engine in the late 1980s and have continued to blossom through the past two
decades. An earlier study by Garnautet al. (2001) estimated that private enterprises have
already been responsible for 50 percent of all economic activity in China, pointing to the eco
nomic significance of entrepreneurial activities in China. Fung, Kummer, and Shen (2006)
have shown that non-state enterprises (private enterprises including foreign firms) account
for over 60 percent of China’s production, 70 percent of the tax revenues, and 90 percent
of the total employment in 本文来自!辣~文^文#网*原文请找腾讯@324.9114 the social significance of China’s private sector.
Scholars examining the performance of Chinese firms focus primarily on privatized firms
that are listed on China’s two exchanges, the Shanghai Stock Exchange and the Shenzhen
Stock Exchange. Exchange-listed firms are largely state-owned enterprises (Huang and
Song, 2005; Weiet al., 2003; Xu and Wang, 1999). Although these firms issue shares of
stock ownership, only one-third of them are available for public investors and traded on
the exchanges; the rest remain under government control and many of these shares are
non-tradable.
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Evidence on the financial behavior of these firms thus does not necessarily provide a
full picture of the behavior of Chinese private firms in general. Many studies, for example,
examine financial performance in terms of the market value of firms (Weiet al., 2003; Xu
and Wang, 1999), but private firms in China in general are not publicly traded; they do
not a have market value, but they may be profitable. Very few authors have examined the
performance of Chinese private firms that arenotlisted on the exchange.
We use two years of survey data on private enterprises in China to shed light on the char
acteristics of China’s private firms in a mixed environment of socialist and market-oriented
economy. First, we provide some background information on the general characteristics
of private firms in China and analyze their financial performance in terms of profitability.
Second, we examine how three types of capital affect the profitability of these Chinese
firms: social capital, financing capital and human capital. The results enable us to better
understand the workings of these private firms in China’s emerging market.如何将PowerDesigner设计的表导出到excel中
Zhang and Fung (2006) link the idea of social capital to the financial performance of
Chinese firms and they demonstrate the effect of social capital on firm profitability. Other
researchers such as Murphy (2002), Gabbay and Zuckerman (1998), and Uzzi (1997, 1999)
have shown that social capital can potentiallyreduce transaction costs, improve coopera
tion and facilitate entrepreneurship including the formation of start-up companies. Well
developed social capital can further strengthen supplier relations and inter-firm learning as
well as improve the firms’ production.2732
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