Hi-tech Industrial Firms in Shanghai: Business Environment and Institutional Framework

Abstract

Innovation and institutional environment have been branded as two key issues related to hi-tech industrial development. This paper reports on a survey findings on local and multi-national hi-tech firms in Shanghai. The survey focuses on the firm’s behaviour and the rationale for the location choice: inside the hi-tech zones, science parks with state endorsed preference policy or in locations marketed by local governments. The study finds that firms agreed that the entrepreneurial climate is favourbale for enterprise investment. The physical and intellectual infrastructure and servicing sector in Shanghai are supportive to enterprises’ development strategy. Foreign firms agreed to the view that the institutional framework in Shanghai reinforces the hi-tech industry. However, state-owned enterprises compliant that the social and moral responsibilities are heavy burden for enterprises undergoing restructuring process. The findings are compared with similar surveys to provide a fuller picture of the investment environment for hi-tech industry in Shanghai.