Li, Yongqiang, Armstrong, Anona and Clarke, Andrew (2011) Governance of Small Businesses in China: An Institutional Perspective. International Journal of China Studies, 2 (2). pp. 507-522. ISSN 2180-3250

Abstract

Governance reforms leave small businesses as a backwater. The purpose of this study was to analyze the governance of small businesses in China from an institutional perspective. Institutional theory suggests that corporations can be thought of as institutions in which their governance structures are moulded by the internal and external mechanisms found in their internal and external environments. These can be formal or informal, e.g. laws or social networks. The paper argues that there is a mismatch between the institutional governance mechanisms introduced in China and the governance of small businesses. It defines small business in China, identifies regulatory and financial reforms, and uses research supported by theories on business financing to explain how small business financial choices affects their governance. The paper concludes with a discussion of future research directions.

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