Research On The Influence Of Resource Endowment And Institutional Environment On New Ventures Growth

Enterprise is the principal part of market,and the growth of venture is the foundation of economic growth and industrial evolution.The establishment and growth of newly founded ventures is one of the important drivers for economic transformation and high-quality development.However,it is an indisputable fact that the newly founded ventures last only a short time and have a small survival rate.New ventures have insufficient initial resources,low organizational legitimacy,weak external relations,and limited access to resources.They are deeply troubled by resource constraints and the threshold of legality,so there is "the liability of newness".Why do some new ventures thrive while others struggle or die?What factors determine the growth of new ventures?It is urgent to analyze the motivation and the law of new ventures growth in order to promote their healthy development under the background of economic transition and "mass entrepreneurship and innovation".This paper takes the growth of new enterprises as the research object and studies the motivation of their growth from two aspects of resource endowment and institutional environment.Through reviewing previous studies,this paper interprets the growth process of new enterprises as the "locking" and "unlocking" of growth path in order to analyze the mechanisms of resource endowment and institutional environment influencing the growth of new enterprises and the differences of mechanisms coming from the different industries.According to the definition of core concepts,it measures the growth rate and the resource endowment level of new enterprises,and analyzes the growth characteristics of them.Based on the theory of mechanism and characteristics of the status quo,it builds a model to investigate the influence of resource endowment and institutional environment on the growth of newly founded ventures.The model not only carries an empirical analysis on the effects of resource endowment and institutional environment,but also carried on an inspection to the mechanism of interaction between them.In addition,two aspects of heterogeneity are analyzed from the subdivision level of institutional environment and ownership structure.According to the differences in growth of new enterprises due to the evolution of different industries,this paper further empirically analyzes the heterogenous influence of resource endowment and institutional environment under different industrial characteristics from three aspects:industrial policy orientation,industrial competition intensity and industrial scale barrier As incremental institution is a typical representation of institutional environment changes in the reform process,this paper takes the establishment of development zones as a quasi-natural experiment and identify the relationship between incremental institution and growth of new enterprises by using the method of differences in differences based on the propensity score matching(PSM-DID).The main conclusions obtained from this study include as follows.First of all,new ventures growth not only relies on resource endowment,but also is influenced by institutional environment.Empirical study shows that resource endowment and institutional environment have positive effects on the growth rate of new enterprises,and those two factors have complementary relation.In terms of heterogeneity on the ownership structure,the effects of resource endowment and institutional environment on the growth of state-owned enterprises are different from that of non-state-owned enterprises.Relative to non-state-owned,the growth of state-owned enterprises is more dependent on resource endowment,and the improvement of institutional environment show the effect of inhibition instead.Those results come from the situation that state-owned enterprises have natural connections with the government and can obtain resources through non-market channels,so the improvement of institutional environment helps to adjust the unbalanced resource allocation.In terms of heterogeneity on the institutional environment,the influence direction of the three subdivisions of institutional environment is consistent with the overall impact of institutional environment,but the effects intensity of them are different.The effects of economic institutional environment and legal protection system are greater than that of government administrative system.Secondly,as the growth of new enterprises should follow the rules of industrial evolution,different industrial characteristics may affect the role of resource endowment and institutional environment.In terms of industrial policy orientation,the heterogeneous results are shown that the improvement of institutional environment is more conducive to the growth of new enterprises in guided industries,but it has an inhibiting effect on new enterprises in regulated industries.This means that the guiding policy provides resource preference for enterprises in target industries,whiles the regulatory policy reduces the resource availability of enterprises in target industries,so the industrial policy orientation affects the resource allocation of new enterprises.In terms of industrial competitive intensity,the lower the industrial competitive intensity,the stronger the promoting effect of resource endowment on the growth of new enterprises is;and the higher the competitive intensity of the industry,the stronger the promoting effect of institutional environment on the growth of new enterprises is.This is because in the market with low competitive intensity,enterprises can charge monopoly price,and the rate of return on resources is higher In terms of industrial scale barriers,the higher the industrial scale barriers,the more the growth of new enterprise dependence on resource endowment;and the lower the barriers of industry scale,the stronger the promoting effect of institutional environment on the growth of new enterprises is.Thirdly,the quasi-natural experiment of development zone shows that the increment system construction promotes the growth of newly founded ventures.The establishment of development zone has increased new firms' scale.In terms of the heterogeneity of development zones,the promotion effect of development zones on the growth of new enterprises is related to the level of development zones:the national development zones and provincial development zones can promote the scale expansion of new enterprises,while the impact of those at municipal level and below is not significant.At the meantime,the influence intensity of the national development zones is stronger than that of provincial development zones.Those results come from the fact that establishment of the development zone attracts enterprises to settle in through the incremental institutional environment.Different policy may have different effects of attraction,and the quantity and quality of enterprises inside the development zone further influence the intensity of agglomeration effect.In terms of industry heterogeneity,the industrial difference based on factor density does not affect the promoting effect of the development zones on the expansion of new enterprise.This shows that the universality fact that newly founded ventures are lack of resources and hungry for resources,and it make the establishment of development zones have a general promoting effect on new enterprises.This paper not only analyzes the average effect of development zone,but also find the two important channels of policy effect and agglomeration effect by introducing the mediation effect model.Finally,resource endowment and institutional environment affect new enterprise growth through "locking" and "unlocking" processes on the growth path,and they have interaction in the influencing mechanism.The impact of resource endowment on the growth of new enterprises mainly includes the following aspects:the initial resource endowment can strengthen the "imprint" effect of organization;the abundance of resource endowment is conducive to the "transition" of the growth path of new enterprises;and resource endowment support the process of resource bricolage in order to ease the resource constraint and improve the problem of "the liability of newness".The impact of institutional environment on the growth of new enterprises mainly includes the following aspects:the improvement of institutional environment helps new enterprises improve the efficiency of resource and acquire follow-up resources,and strengthen the "locking" process of the growth path;the improvement of regional institution can trigger the process of "unlocking" of the evolution path of new enterprises by creating a more fair environment;and the improvement of institutional environment helps new enterprises to gain identity,improve the degree of legality,break through the "threshold of legality".At the same time,the incremental institutional arrangement,such as the development zone,creates the local environment conducive to enterprise growth,which has the "policy effect" and“cluster effect" can support the growth of new firm.The internal and external conditions at the initial stage of establishment have a path-dependent "locking" effect on the evolution of new enterprises,while the subsequent special events,external changes and further strategic behaviors have an "unlocking" effect of path change.The resource efficiency and resource acquisition are two important aspects of the growth of new enterprises,and link the relationship between resource endowment and institutional environment.The role of resource endowment and institutional environment in the "locking and "unlocking processes of enterprises growth and their mutual relations constitute the dynamic development of new enterprises.