Evaluating Small Business Development in China's Retail Sector: An Empirical Analysis
定量研究1985-1992年中国经济改革期间影响个体零售企业结构的社会经济因素，使用回归分析考察滞后变量对销售额的影响，适合关注中国零售业发展和小企业政策的学者。
The Chinese reform strategy emphasizes competition over privatization. The loss-making state enterprises are replaced not by extensive privatization in the short run, but by being gradually outcompeted and outgrown by other non-state enterprises in the long run. Since 1978, the Chinese government has introduced different types of ownership to the economy: collective enterprises, individual enterprises, joint enterprises (state and collectives, state and individuals, collectives and individuals, Chinese and foreign investors), and foreign enterprises (mainly overseas Chinese or Chinese from Hong Kong, Macau, and Taiwan). This policy allows these enterprises to compete with and complement one another. Because the start-up costs of small retailers are relatively low, retailing is one of the easiest businesses for individuals to start. As the government allowed free markets to operate at the margin, numerous retail enterprises developed rapidly, initially in rural areas and later in urban areas. The market share and labor share of individual enterprises in the retail sector has increased from close to zero and 5 percent, respectively, in 1978 to more than 20 percent and 50 percent in 1992. Moreover, these enterprises' sales per worker (after adjustment for inflation) also increased by seven times during the same period (State Statistical Bureau 1985-1993). Despite the rapid growth of Chinese businesses, the academic research in this area has not grown proportionately. Wortzel and Wortzel (1987) provide a detailed qualitative analysis of the development of free market retailing and its associated functions. Qiang and Harris (1990) review the development of retailing reform in general. Chow and Tsang (1994) construct an overall picture of the development, functions, and problems of small businesses; however, their discussion is general and their focus is not on the retail sector. This article presents a quantitative study that examines the socio-economic factors that determined the retail structure of individual enterprises during the years of economic reform (1985-1992). The approach adopted follows the macro-marketing research developed by Bucklin (1972, 1978), Takeuchi and Bucklin (1977), and Ingene and Lusch (1981). The sales per store and sales per worker statistics for individual enterprises were chosen as indicators of retail structure (dependent variables). Since China has frequently suffered from inflation, these variables (and per capita provincial national income) are deflated by the corresponding provincial retail price indices to obtain the values in real terms. A regression analysis was conducted to examine effects of predictor variables on the dependent variables. The predictor variables on retail structure are outlined below. Lagged Dependent Predictor Variables In addition to concurrent variables, some lagged dependent variables and predictor variables were used because of the probable presence of an adjustment lag. There are at least two reasons for this presence. First, given the bureaucracy problem in China, entries and exits are not instantaneous. All individual enterprises in retail business are required to apply for permits from the government. Some provinces may be faster in processing applications, some may be very slow, much depends on the attitude of provincial governments to economic reform. Because of this institutional restriction, entry and exit processes will be slowed down. Second, in making decisions to enter or exit, past history, especially enterprises' performance in the last period, is crucial for finalizing the decision. As a result, retail structure may respond to lagged variables. One of our predictor variables is the number of stores per capita in the province. We use both concurrent and lagged measures of this variable. Total stores per capita indicates the level of competition in the retail sector; keener competition should reduce sales per store/worker unambiguously. …