Evaluating Small Business Development in China's Retail Sector: An Empirical Analysis

A quantitative study examines the socio-economic factors that determined the retail structure of individual enterprises during the years of economic reform (1985-1992). The approach adopted follows the macro-marketing research developed by Bucklin (1972, 1978), Takeuchi and Bucklin (1977), and Ingene and Lusch (1981). The sales per store and sales per worker statistics for individual enterprises were chosen as indicators of retail structure (dependent variables). Since China has frequently suffered from inflation, these variables (and per capita provincial national income) are deflated by the corresponding provincial retail price indices to obtain the value in real terms. A regression analysis was conducted to examine the effects of predictor variables on the dependent variables. The empirical results suggest that the level of competition is very important in determining the performance of individual enterprises. Changes in this factor induced by entries or exists of retailers significantly affect the retailers' sales.