Environmental uncertainty, entrepreneurial governance, and entrepreneurship activities: evidence from China, 2005 - 2019

Uncertainty has been a key concept in entrepreneurship literature. However, the relationship between uncertainty and entrepreneurship activities has been inclusive. In this dissertation, I attempt to contribute to this long-puzzling relationship by joining theories from management and economics literature to develop an integrative theoretical framework on the relationships between environmental uncertainty, entrepreneurial governance, entrepreneurial outcomes, and entrepreneurial strategic changes. I propose that environmental uncertainty can significantly affect entrepreneurial outcomes and entrepreneurial strategic changes, and entrepreneurial governance plays an important role in this process. To reconcile previous conflicting literature on uncertainty and entrepreneurship activities, I identify three different types of environmental uncertainty – macroeconomic uncertainty, economic policy uncertainty, and political turnover uncertainty. I develop an integrative framework to explain and predict how different types of environmental uncertainty can have distinct impacts on entrepreneurial outcomes and entrepreneurial strategic changes. Importantly, I propose that startups with distinctive ownership structures can leverage or mitigate the impacts of environmental uncertainty differently, underpinning the importance of ownership arrangements for startups. To test my theoretical framework, I collected a unique dataset covering 9 million Chinese startups registered after 2005. Moreover, I develop a novel measurement for economic policy uncertainty with an analysis of a proprietary dataset of more than 240, 000 Chinese policies. The empirical results indicate that both macroeconomic uncertainty and economic policy uncertainty can significantly decrease the likelihood of survival of startups, while political turnover uncertainty can significantly increase the likelihood of entrepreneurial survival. Moreover, I investigate the relationship between environmental uncertainty and two critical types of industry-related entrepreneurial strategic change – diversifying entry and change of the dominant business. I found that macroeconomic uncertainty and economic policy uncertainty will positively impact the likelihood of diversifying entries by startups but negatively impact the likelihood of changes of the dominant business by startups. Political turnover uncertainty, in contrast, can induce both types of industry-related entrepreneurial strategic change. Finally, three characteristics of ownership structures – number of shareholders, the existence of institutional shareholders, and the existence of supermajority shareholder – are investigated as moderators of the above relationships.

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Business Administration

Grantor

University of Illinois at Urbana-Champaign

Year dc:date

2022

Author dc:creator

• Zhang, Weiliang

Contributors dc:contributor

• Mahoney, Joseph
• Sakhartov, Arkadiy
• Schijven, Mario
• Yao, Kun

• Entrepreneurship
• Uncertainty
• China
• Entrepreneurial Governance

Statement dc:rights

• Copyright 2022 Weiliang Zhang

Language dc:language

en, eng

Handle dc:identifier

https://hdl.handle.net/2142/115883

OAI record oai:identifier

https://www.ideals.illinois.edu/oai-pmh?verb=GetRecord&metadataPrefix=etdms&identifier=oai%3Awww.ideals.illinois.edu%3A2142%2F115883