Microenterprise performance and microenterprise zones (MEZOs) in China

Abstract

PurposeThe purpose of this exploratory study is to examine whether performance of microenterprises located in a microenterprise zone (MEZO) in China is positively related to key management practices, entrepreneurial orientation, marketing capability, and technology capability. The paper aims to introduce the concept of MEZOs as a supplemental tool for governments to strengthen microenterprise activity.Design/methodology/approachA total of 150 randomly selected microenterprises located in a MEZO in Changchun, an industrial city in Northeast China, completed a survey consisting of a three‐part measure of microenterprise performance developed by Zinger et al. and entrepreneurial orientation. Factor analysis was performed on 11 management issues and correlation analysis was performed.FindingsThe study found that key management practices, marketing capability, and technology capability of microenterprises in MEZOs do have a positive impact on performance sales, net profit, and growth.Research limitations/implicationsThe study's results are limited by a sample in one city in one province of China collected in one month. The data are cross‐sectional rather than longitudinal. Sample bias may exist.Practical implicationsThis study is valuable to government officials, policy makers, non‐government organizations and consulting firms as they examine new measures to unleash the economic power of microenterprises.Social implicationsMEZOs need to be explored as one solution to aide microenterprise development to improve the poverty level, create jobs, and stimulate economic activity.Originality/valueTo the authors' knowledge, this is the first exploratory study of the performance of microenterprises located in a MEZO in China. Through research, the factors that contribute to microenterprise performance and success can be better understood and the impact that the MEZO model has on microenterprises can be better delineated.