In recent years, with industrial transfer and structural change in labor force, farmers’ entrepreneurial consciousness and ability have been strengthened. Meanwhile, under the national strategies such as " mass entrepreneurship and innovation” and " targeted poverty alleviation”, governments promulgated a series of policies to support rural entrepreneurship, which have greatly stimulated farmers’ entrepreneurial enthusiasm. Rural entrepreneurship can expand the space for rural labor employment, add creativity for the development of county economy, accelerate the process of " new countryside” construction, and explore new pace for a coordinated development of both urban and rural places. Therefore, there is of great social and economic significance to deep study of rural entrepreneurship. Compared with urban entrepreneurship, Chinese rural entrepreneurs are influenced by traditional ancestral culture, family culture and collectivism culture, and renqing relationship between friends and relatives, which is based on blood ties and geographical ties, plays an important role in social relationship of farmer entrepreneurs. Besides, rural entrepreneurship is limited by the shortage of human resources in rural areas and imperfect human capital market, thus rural entrepreneurs pay more attention to friends and relatives’ relationship. Based on this view, we want to know how renqing relationship influences the performance of rural entrepreneurial firms. In general, rural entrepreneurship takes family as the basic unit, and is self-organized, showing small, individual and decentralized characteristics of " small scale peasant economy”. Therefore, technical knowledge and normative habits learnt by entrepreneurs from previous experience are also important to rural entrepreneurship, because these knowledge and habits are embedded in their behaviors and ability, and then are delivered to entrepreneurial enterprises increasingly. To some extent, this normalized experience can also overcome the drawbacks of traditional " small scale peasant economy”, and improve the normative development of rural entrepreneurial firms. However, when " normalized experience” meets renqing relationship, what kind of " sparks” will happen? Mutual promotion or restriction? Based on 4600 nation-wide rural firm samples which were collected through the 2016 Thousand Villages Investigation implemented by Shanghai University of Finance and Economics, we try to figure out: （1）what would be the impact of renqing relationship on the performance of rural entrepreneurial firms in China? does renqing relationship have different influences on firms’ survival performance, growth performance, and innovation performance? （2）what would be the impact of entrepreneurs’ normalized experience on the performance of rural entrepreneurial firms in China? （3）what would be the impact of normalized experience on the relationship between renqing relationship and firm performance? are they mutually promoted or restricted? It comes to the following conclusions: firstly, influenced by traditional rural ancestral culture and family culture, renqing relationship plays an important role in rural entrepreneurship. Specifically speaking, renqing relationship can promote the survival and innovation performance of rural entrepreneurial firms significantly. Secondly, entrepreneurs’ normalized experience in firm management and industrial associations has positive influence on the performance of rural entrepreneurial firms. Thirdly, the entrepreneurs’ previous normalized experience weakens the role of renqing relationship in promoting the performance of rural entrepreneurial firms, that is, there is a kind of inhibition between previous normalized experience and renqing relationship. The robustness test also confirms these conclusions. In short, this paper mainly expands the existing research in the following three aspects. First, this paper enriches the existing literature on the factors influencing the performance of rural entrepreneurial firms, and studies the impact of renqing relationship on rural entrepreneurial firms’ performance under the cultural background of Chinese rural areas. Second, this paper uses a comprehensive and objective measurement to measure rural entrepreneurial firms’ performance（survival performance, growth performance and innovation performance）. Third, this paper analyzes the interaction between " normalized” experience of entrepreneurs and Chinese traditional culture（ancestral culture and family culture）. This paper has great contributions to rural entrepreneurship research and practice. It also provides valuable suggestions on how to improve rural entrepreneurship and strengthen the governance of rural entrepreneurial firms from the perspective of the balance between internal relations and the shock of external experience in rural areas.
Investigation of Performance of Rural Entrepreneurial Firms in China: Influence and Interaction between Renqing Relationship and Normative Experience
Journal of Finance and Economics Vol. 44, Issue 01, pp. 20 - 32 (2018) DOI:10.16538/j.cnki.jfe.2018.01.002
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Cite this article
Dong Jing, Xu Wanyu, Zhang Yu. Investigation of Performance of Rural Entrepreneurial Firms in China: Influence and Interaction between Renqing Relationship and Normative Experience[J]. Journal of Finance and Economics, 2018, 44(1): 20–32.
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