ABSTRACT
In this chapter, the authors construct an empirical model to estimate the effect of government intervention on entrepreneurship. Entrepreneurship has been widely studied as one of the key factors for economic growth and innovation, since Schumpeter's "gale of creative destruction" theory takes innovation and entrepreneurship as one of the main sources for economic growth. Research on entrepreneurship has attracted strong attention largely because of its significance in economic development. The close relationship between private enterprises and governments may create more opportunity for the growth of unproductive entrepreneurial behaviour. A crucial factor determining how entrepreneurs utilize their time in productive and non-productive activities is related to government intervention. In an emerging economy like China, the topic of government intervention on entrepreneurship is rather important. The Chinese government has been considered an authoritative government with strong governmental power; the baseline result shows that, from the perspective of entrepreneurial activities, the government does indeed have a strong behavioral effect.
