The Local Officials’ Entrepreneurial Background And Economy Development

Successful leaders of state-owned enterpeices in China tend to start another careerin the government in recent years. This phenomenon makes it interesting andmeaningful to research and analyze the relevance between the entrepreneurialexperience of the local officials and the economic development in areas under theirgovernance. Yet the researches on this subject were neither comprehensive norsufficient.In this paper, quantitative analyzing method is used on the provincial panel data.We examine firstly the essential question of our research and find out that theentrepreneurial experience of local officials during market economic period hassignificant positive impact on the local economy while that during planned economicperiod has significant negative impact. By reducing the samples we exclude thepossibility of endogeneity. The results are conform to classical economic theories andthe existing research conclusions.Secondly, we make further analysis from three dimensions. We divide the samplesinto two groups for further examination: the ones from eastern China and the ones frommiddle and western China. The result is that the positive impacts of local officials withentrepreneurial experience in market economic period in the eastern regions areobviously stronger than officials in the middle and western regions. Whereas thenegative impacts of the local officials with entrepreneurial experience during plannedeconomic period are also stronger than that in the middle and western regions. Weexamine then the different times and see that before2000, entrepreneurial experienceplayed a stronger negative role than that during market economic period.While thesituation after2000is quite the opposite. Considering the positions of local officials, weuse deductive method to analyze different samples of party leaders and governors tofind out the reason. The conclusion is, the positive impacts of party leaders withentrepreneurial experience during market economic period are higher than governorswith same background. The negative impacts of governors with entrepreneurialexperience during planned economic period are also higher than party leaders. Theresults from these three dimension provide the end conclusion with robust proofs.In the end, we discuss the generation mechanism and the function paths. Through analyzing two cases with qualitative method we see that entrepreneurial experiencehelps boosting the economy in two ways. One is dominant and normative way of publicmanagement. Entrepreneurial background plays a role in planning, decision making andexecution. The other one is recessive way of mobilizing private resources of the localofficials, including knowledge, personal informations, and human resources in theenterprises before. Then we find out another two ways using quantitative analyze. Oneis that the officials with entrepreneurial experience during market economic period hasmore interest in investment whereas the local officials with entrepreneurial experienceduring planned economic period tend to suppress investments. The other one is thegreater interest of local officials of the first kind in secondary and tertiary industriesthan officials of the second kind.The results can give us some advice about policy making. Firstly, we should havemore officials with entrepreneurial experience during market economic period.Secondly, we need to consider the local conditions and times. Thirdly, theentrepreneurial background of party leaders and governors should be complementaryand interactive. Forthly, we should match the officials having a specific industrybackground with local specific development goals.