Cognitive legitimacy and ownership heterogeneity: impact of local incumbent firms on new private firm formation in China’s manufacturing sector
研究中国制造业中不同所有权类型的本地在位企业如何通过认知合法性影响新私有企业的形成，发现私有企业促进效果最强，外资企业次之，国有企业则抑制创业。
This study investigates the impact of local incumbent firms on new private firm formation in China by focusing on the cognitive legitimacy lent by different ownership types. We argue that new firm formation requires legitimacy spillover from local society. Based on the panel data of China’s manufacturing enterprises, we find that local ownership structure plays a vital role in new private firm formation. Incumbent privately owned enterprises enhance the legitimacy of private ownership naturally, and the effect from foreign-owned enterprises to new private firms is positive but weaker than that of privately owned enterprises, whereas state-owned enterprises discourage entrepreneurship due to their entirely different identities.