Topic: Policy Uncertainty and Management Time Redistribution of Private Entrepreneurs
Lecturer: Liu Yiming, Wang Yanan Institute of Economics, Xiamen University
Time: 15:30-17:00 p.m. 25th of October 2018（Thursday）
Venue:B423, Zhixin Building
Abstract: In transitional China, the fiscal decentralization system determines the political centralization of the central government, but the local decentralization system is implemented economically. As a local "leader", the Secretary of the Municipal Committee of the CPC has brought a strong external impact on micro-enterprises, and has affected strategic decisions such as enterprise innovation investment and time allocation of entrepreneurs. This paper empirically examines the changes in the time allocation of entrepreneurs' management labor when official turnover occurs, using the data of 2002-2010 Municipal Party Committee Secretary turnover and the survey data of private enterprises. It measures policy uncertainty from three perspectives: whether or not officials are replaced, whether or not they are replaced after the expiration of their term of office and the source of new officials. The study finds that policy uncertainty significantly reduces the time allocation of entrepreneurs' outgoing business contacts, meetings, public relations and hospitality; furthermore, policy uncertainty significantly increases the economic cost of corporate social activities. This shows that, to a certain extent, the restriction of official tenure and the system of exchange between different places can reduce the rent-seeking activities of entrepreneurs.