The performance of private companies in China before and during the global financial crisis: firms’ characteristics and entrepreneurs’ attributes

This work sheds light on how firm- and entrepreneur-specific attributes covariate with Chinese private firms’ growth rates before and during the global financial crisis. In order to do so, we exploit the exceptional presence of data regarding the firms’ sales over the previous three years in the 2010 China Private Enterprises Survey. Firms run by entrepreneurs with a high level of education and a positive subjective perception of their economic and social status tend to grow more in both periods. The age and the gender of the entrepreneurs, on the contrary, are not associated with different growth performances. As shown in the literature, companies that are smaller, more productive and have higher capital at start-up perform better in both periods. Notably, the relationship between firm growth rates and other relevant factors changes between 2007/2008 and 2008/2009: privatized companies outperform the others before the crisis, whereas joint-stock enterprises and companies with articulated systems of corporate governance do better in the crisis period. These and other novel results contribute to the understanding of the heterogeneous performances of the private firms in China and of the evolution of entrepreneurship during its transition toward a market-oriented economy.