The Climate for Entrepreneurship: A Comparative Study of China and Hong Kong

ABSTRACT The project builds on the previous work of Muller-Boling and Klandt (1990 and 1993) into what motives for, and reservations against, entrepreneurship and also contributes to a standardised data collection and comparison, particularly China and Hong Kong, of attitudes towards entrepreneurship as a key factor of the climate for entrepreneurship. The research findings suggest that both China and Hong Kong respondents perceive "do work that you like" as the important motive to start their own business and "no start-up capital" as the important influential factor that hinders their decisions for setting up own businesses. Interestingly, however, the research results also suggest that the "climate for entrepreneurship" of China and Hong Kong are significantly different. Hong Kong potential entrepreneurs tend to be influenced positively by social factors and negatively by company and personal factors, whereas the China counterparts are subjected to the influences both positively and negatively of the external, family and personal factors. INTRODUCTION Research findings (Acs & Audretsch, 1990; Andersen, 1982; Bannock, 1981; Birch, 1979; Brock & Evans, 1986; Bruch & amp; Hiemenz, 1984; Hisrich, 1986; Hull &Hjern, 1987) reveal that the functioning of the market system and the international competitiveness of a national economy depend largely on the continuous emergence of new ventures. The new ventures induce company growth and innovation, which in turn enhance economic growth and development. Also, new ventures contribute to a solution of urgent employment problems. In the long term, the emergence and survival of new business units can only be secured by favorable surrounding conditions. There are various critical factors, ranging from key general economic factors to the entrepreneur's personal support systems, which affect entrepreneurial success. Muller-Boling and Klandt (1990/1993) conceptualized those factors as the "climate for entrepreneurship" and argue that the way social groups and politics influence entrepreneurs basically determines the entrepreneurial environment, which is influenced by the public opinion on entrepreneurship and/or the image conveyed by job and education. Interestingly, Siu and Martin (1992) find that the Chinese socio-cultural environment facilitates entrepreneurial endowment but hinders entrepreneurial development. As China moves from a planned economy to a socialist market economy with Chinese characteristics, it would be interesting to know how and to what extent the socio-cultural factors affect the entrepreneurial climate of China. RESEARCH DESIGN As the entrepreneurship tenets and principles are basically Western dominated, it would be interesting to determine the entrepreneurship climate of China and to compare with that of Hong Kong, a Chinese city with British capitalistic characteristics. Thus, the research question is "How much does the image of entrepreneurship vary in different politico-economic backgrounds - China and Hong Kong? " The instrument, designed specifically by Muller-Boling and Klandt (1990/1993), measuring the "climate for entrepreneurship" was adopted. As Chinese is a major language in China and Hong Kong, a Chinese questionnaire, which was translated from the English version of the "climate for entrepreneurship" questionnaire, was prepared for potential Hong Kong and China entrepreneurs. To eliminate translation bias, the back-translation method proposed by Brislin (1970) was adopted. Two translators who knew both English and Chinese well were invited to translate the English questionnaire into Chinese independently. Then, two other translators back-translated the Chinese questionnaire into English. A meeting with the four translators were arranged so as to resolve disagreements on different versions of the questionnaires. A finalized version in Chinese was developed after the meeting. There were 243 China and 114 Hong Kong potential entrepreneurs, specifically the final year students of the BBA and MBA programs, who were invited to answer the questionnaire. …