Government Performance in the Eyes of Business: An Empirical Study of SMEs in China

ABSTRACT

In countries where evaluation of government performance is closely linked with economic growth, business perceptions of government and the business environment are critical to the local government. However, in the field of public administration, businesses’ perceptions of government performance and its determinants are largely overlooked. This article explores whether perceptions of small- and medium-sized enterprises (SMEs) of the business environment will be influenced by government’s effort to engage the business sector. SME participation and involvement in the policymaking process is likely to result in more connections with government officials and better understanding of government decisions that have a positive impact on firms’ perceptions of their business environment. Using data collected from 2,662 SMEs in China in 2013, it is found that SMEs tend to have a better view of the local business environment if they can participate more in public policymaking processes.

KEYWORDS:

• business perception
• China
• government performance
• ladder of participation
• small and medium enterprises

Acknowledgment

This study utilizes data collected by the 2013 Lien Chinese Public Service Project. The project is financially supported by the Lien Foundation in Singapore and carried out in the Nanyang Center for Public Administration (NCPA) at Nanyang Technological University, Singapore (NTU). The findings in this article are those of the authors and do not necessarily reflect the views of the Lien Foundation and NTU.

Notes

The categories used in the Doing Business project are: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency. The areas in the Business Environment Ranking and Index project are: the political environment, the macroeconomic environment, market opportunities, policy toward free enterprise and competition, policy toward foreign investment, foreign trade and exchange controls, taxes, financing, the labor market, and infrastructure.

Additional information

Notes on contributors

Jue Wang

Jue Wang is an Assistant Professor in the Public Policy and Global Affairs Program, School of Social Sciences at Nanyang Technological University, Singapore.

Wenxuan Yu

Wenxuan Yu is a Professor in the School of Public Affairs and School of Public Policy at Xiamen University, China.