Volume: 23, Issue: 1

Page: 75-90
International Journal of Science and Business
2023
Journal homepage: ijsab.com/ijsb

A Study of Spirit of Zhejiang Entrepreneurs,

Enterprise Innovation and Enterprise
Growth in China
HAN GANG
Abstract
The purpose of this paper is to take Zhejiang entrepreneurs as the object,
constructs a research model of "entrepreneurship-enterprise innovation-
enterprise growth", collects sample data by questionnaire survey, and makes
an empirical analysis to explore the influence of the Spirit of Zhejiang
Entrepreneurs on enterprise growth and the intermediary effect of
enterprise innovation between them. Based on the quantitative research
design, the main findings and conclusions of this paper are as follows: First,
each dimension of the Spirit of Zhejiang Entrepreneurs has a direct role in IJSB
Accepted 09 May 2023
promoting the growth of enterprises, and the spirit of innovation has the Published 11 May 2023
strongest role in promoting the growth of enterprises. In addition, the DOI: 10.58970/IJSB.2135

contractual spirit of private enterprises promotes the growth of enterprises

more strongly than that of state-owned enterprises. Secondly, each
dimension of the Spirit of Zhejiang Entrepreneurs has an obvious positive
promotion effect on technological innovation and business model innovation,
and the spirit of risk-taking has a stronger promotion effect on business
model innovation of state-owned enterprises than private enterprises. Third,
technological innovation and business model innovation have an obvious
role in promoting the growth of enterprises, which is more obvious in private
enterprises. Fourth, technological innovation and business model innovation
play an obvious intermediary role between the Spirit of Zhejiang
Entrepreneurs and enterprise growth. For the implication of this study,
among them, the Spirit of Zhejiang Entrepreneurs mainly influences the
growth of state-owned enterprises through the intermediary role of business
model innovation. Finally, combined with theoretical analysis and empirical
research, the research results are further discussed, and the corresponding
countermeasures to promote the healthy growth of Zhejiang enterprises are
put forward from the perspective of carrying forward the excellent the Spirit
of Zhejiang Entrepreneurs and promoting the innovation and development ISSN: 2520-4750 (Online) 2521-3040 (Print)

of enterprises.
Papers published by IJSAB International are
licensed under a Creative Commons Attribution-
NonCommercial 4.0 International License.

Keywords: Enterprise growth, the Spirit of Zhejiang Entrepreneurs, Enterprise innovation, Enterprise
Growth.
About Author (s)

HAN GANG, Asia Metropolitan University, Malaysia.

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Introduction
Research background
In today's China, Zhejiang Entrepreneurs is undoubtedly an entrepreneur group with the
largest number, the widest distribution, and the strongest strength, and its popularity,
reputation, and influence have far exceeded the provincial scope. Zhejiang is the most
economically developed province in China. According to China's unified preliminary
accounting, in 2022, Zhejiang Province ranked fourth in China with a total GDP of 7,771.5-
billion-yuan, accounting for 6.46% of the total GDP of China, with a GDP increase of 367.42
billion yuan and a nominal growth rate of 4.96%. In terms of industries, the added value of the
primary, secondary, and tertiary industries was 232.5 billion yuan, 3,320.5 billion yuan, and
4,218.5 billion yuan respectively, up by 3.2%, 3.4%, and 2.8% respectively over the previous
year, and the tertiary industrial structure was 3.0: 42.7: 54.3. The per capita GDP was 118,496
yuan (US $17,617 at the annual average exchange rate), an increase of 2.2% over the previous
year. In the rich list of mainland China published by Forbes over the years, the number of rich
people from Zhejiang ranks first. With the rapid economic development, the international
competitiveness of Zhejiang's economy is constantly emerging. (Drucker 1985; Dunford et al.
2010; Guan et al. 2019; Pedersen et al. 2020; Thomas 2021; Wei et al. 2014; Zahra & Covin
1995; Zhai et al. 2018; Sirmon et al. 2017; Subramaniam 2021). Fortune magazine (2022)
published the latest list of the worlds top 500. In 2022, the total operating income of 500
enterprises in the list reached 37.8 trillion US dollars, up 19.2% year-on-year, equivalent to
40% of the global GDP, close to the sum of the GDP of China and the United States; The total net
profit reached 3.1 trillion US dollars, up 88% year-on-year, the largest increase since 2004. The
threshold for entering the list (minimum sales revenue) jumped from US $24 billion to US $28.6
billion, which further increased the difficulty of entering the list.

There are 145 listed enterprises in China, ranking first in the world for four consecutive years,
with an increase of 2 over the same period of last year, including 99 state-owned enterprises
and 46 private enterprises. Although the shadow of the novel coronavirus pneumonia epidemic
hangs over the whole world and the world economy continues to slump, the leading enterprises
in Zhejiang still perform well. Nine enterprises in Zhejiang are listed on the list, namely Alibaba,
CUHK, Rong Sheng Holdings, Geely Holdings, Qingshan Holdings, Hengyi Group, Zhejiang
Jiaotou, Hangzhou Iron and Steel Group, and Hailiang Group, with one more (Hangzhou Iron
and Steel Group) than in 2021. The overall scale of listed enterprises in Zhejiang is growing and
their global competitiveness is strengthening. Statistics are both boring and the most
convincing. The above analysis shows that many entrepreneurs in Zhejiang are the main body
creating the miracle of Zhejiang's rapid economic development, the most precious resource,
the most important driving force, and the most obvious advantage to promoting Zhejiang's
rapid economic development, and the main force of Zhejiang's economic development. The
Spirit of Zhejiang Entrepreneurs is an important driving force for enterprise growth. At
present, scholars have carried out abundant research on the relationship between the the Spirit
of Zhejiang Entrepreneurs and firm growth from theoretical and empirical perspectives.
However, under the current background of vigorously promoting excellent entrepreneurship
and actively promoting the high-quality development of enterprises, it is of great theoretical
and practical significance to regain the research on the relationship between the the Spirit of
Zhejiang Entrepreneurs and enterprise growth.

Problem Statement
The role of Spirit of Zhejiang Entrepreneurs in promoting enterprise growth has been generally
recognized by academic circles. However, to promote excellent Spirit of Zhejiang
Entrepreneurs at present, it is necessary to systematically study the internal mechanism and

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boundary conditions between Spirit of Zhejiang Entrepreneurs and enterprise growth, to

reveal the influence path of entrepreneurs on enterprise transformation, upgrading, and high-
quality development. (Drucker 1985; Dunford et al. 2010; Guan et al. 2019; Pedersen et al.
2020; Thomas 2021). Innovation is the important driving force of high-quality economic
development, and enterprises and entrepreneurs are the important subjects of innovation.
Therefore, promoting high-quality economic development requires entrepreneurs to actively
seek the growth path of innovation-driven enterprise transformation and upgrading. Based on
such practical needs, this study explores how Spirit of Zhejiang Entrepreneurs influences the
growth of enterprises through enterprise innovation and realizes the internal mechanism of
innovation, development, and transformation and upgrading of enterprises. Although scholars
have done abundant research on the Spirit of Zhejiang Entrepreneurs, enterprise innovation,
and enterprise growth, there is still a certain distance from the current practical requirements
of promoting excellent Spirit of Zhejiang Entrepreneurs and promoting high-quality
development of enterprises.

At present, scholars' research on the Spirit of Zhejiang Entrepreneurs mostly draws lessons
from Western research results and expands around two core spirits: innovation spirit and risk-
taking spirit. Carrying forward the strategy of excellent Spirit of Zhejiang Entrepreneurs to
promote high-quality economic development not only requires entrepreneurs to actively exert
their innovative spirit and adventurous spirit to realize the leap-forward growth of enterprises
but also requires entrepreneurs to uphold the spirit of contract and promote the sustained and
healthy development of enterprises. Therefore, it is necessary to redefine the new connotation
of entrepreneurship in combination with the realistic requirements of promoting excellent
Spirit of Zhejiang Entrepreneurs to promote the transformation, upgrading, and healthy
growth of enterprises, and reveal the internal path of Spirit of Zhejiang Entrepreneurs affecting
the growth of enterprises from the perspective of enterprise innovation. Although the relevant
research supports the direct promotion significance of Spirit of Zhejiang Entrepreneurs to
enterprise innovation and the important influence of enterprise innovation on enterprise
growth, it is different from the previous direct relationship between entrepreneur
entrepreneurship and enterprise creation, and between the company Spirit of Zhejiang
Entrepreneurs and enterprise innovation behavior. Whether entrepreneurs' personal values
and behavior tendencies can be successfully transformed into enterprise innovation behavior
and promote enterprise growth and high-quality development through enterprise innovation
behavior and innovation achievements, this practical problem needs to be further
demonstrated from theoretical and empirical perspectives. (Drucker 1985; Dunford et al. 2010;
Guan et al. 2019; Pedersen et al. 2020; Thomas 2021; Wei et al. 2014; Zahra & Covin 1995; Zhai
et al. 2018; Sirmon et al. 2017; Subramaniam 2021)

Research Questions
According to the above problem statement, this study puts forward the specific research
questions mentioned as: 1. Does the Spirit of Zhejiang Entrepreneurs positively affect the
growth of enterprises? 2. Does the Spirit of Zhejiang Entrepreneurs positively affect enterprise
innovation?

Research Objectives
This study mainly analyzes the relationship between Spirit of Zhejiang Entrepreneurs,
innovation spirit, and enterprise growth, discusses the internal and external factors of Spirit of
Zhejiang Entrepreneurs, and analyzes the influence mechanism of Spirit of Zhejiang
Entrepreneurs on enterprise growth from two perspectives of opportunity identification and
resource integration. The specific objectives are mentioned as: 1. Explore the influence of the

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Spirit of Zhejiang Entrepreneurs on the growth of enterprises. 2. Explore the influence of Spirit
of Zhejiang Entrepreneurs on enterprise innovation.

Scope of the Study

This study integrates Spirit of Zhejiang Entrepreneurs, enterprise innovation, and enterprise
growth into a research framework, discusses the influence of Spirit of Zhejiang Entrepreneurs
on enterprise growth by combining theoretical and empirical methods, and discusses the
intermediary role of enterprise innovation between them, revealing the internal mechanism of
Spirit of Zhejiang Entrepreneurs affecting enterprise growth, and providing a theoretical basis
for giving full play to Spirit of Zhejiang Entrepreneurs to promote enterprise transformation
and upgrading.

Literature review
The Spirit of Zhejiang Entrepreneurs
Existing scholars have defined entrepreneurship from different perspectives. Psychologists
mostly take entrepreneurs as their research object, aiming at summing up the personality traits
that are different from ordinary people from many entrepreneurs and defining them as
entrepreneurship. (Drucker 1985; Dunford et al. 2010; Guan et al. 2019; Pedersen et al. 2020;
Thomas 2021; Wei et al. 2014; Zahra & Covin 1995; Zhai et al. 2018; Sirmon et al. 2017;
Subramaniam 2021). However, many successful entrepreneurs have different personality
traits, and it is one-sided to define entrepreneurship with a series of personality traits.
Opportunity discovery is a cognitive process, and entrepreneurs are the main body of this
cognitive process, so lifeless enterprises cannot undertake the responsibility of opportunity
discovery (Audretsch, 1995). Therefore, the process of opportunity discovery, evaluation, and
utilization is the choice made by entrepreneurs under the leadership of entrepreneurship, and
the research on entrepreneurs gradually turns to the discussion of entrepreneurship. In the
early 18th century, Cantillon mentioned that entrepreneurship is the combination of
entrepreneurial spirit and skills. Mises (1949) thinks that entrepreneurship is a kind of ability,
which is the ability of individuals to discover and create opportunities that can generate profits
and actively utilize such opportunities. Mises (2010) strongly criticizes the wrong idea that
entrepreneurship is regarded as a risk-taking ability and production factor. From the
perspective of human resources, Schultz thinks that entrepreneurship is a kind of "ability to
achieve balance". With the continuous advancement of research, scholars have launched a rich
discussion on entrepreneurship from the perspectives of psychology, economics, management,
sociology, and even law, which is also the main reason for the fuzziness of the concept of
entrepreneurship. Based on the relevant literature, the typical concepts of entrepreneurship
are shown in Table 2-1.

Table2- 1 Typical Entrepreneurship Concept

Research perspective Definition of the Connotation of Source
Entrepreneurship
Protestant ethics Puritan "dedication to the cause", Weber (2002)
including loyalty and
responsibility to the cause, hard
work, the pursuit of wealth and
frugality, or "capitalist spirit"
Achievement motivation theory Entrepreneurs' personality McClellan (1954)
survival theory characteristics that influence Hager (1960)
entrepreneurial activities are the
struggle of some disadvantaged
minority groups in society to
change their current situation

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Cultural values It is people's attitude towards Lynn (1991)

work, social interaction, money
and risks, and it is a value system
It is innovative action, not It is entrepreneurs' ability to find Schumpeter (1934)
personality characteristics opportunities in change, innovate Drucker (1985)
and integrate resources, and carry Covin and Slevin (1991)
out planned innovative actions.
It is the behavioral tendency of And the tendency to pursue
running a business, not the technological leadership and
personality trait actively participate in industrial
competition
Entrepreneur talent allocation The act of allocating Baumol (1990), Lv (2018)
theory entrepreneurial talents to the field Liu et al. (2013)
of innovative production
Entrepreneurial behavior Equate entrepreneurship with
entrepreneurs' entrepreneurial
behavior
It is an enterprise with personal Entrepreneurs' value system, risk
characteristics as its dominant preference, adventure and other
characteristics personal characteristics are the
dominant elements of
entrepreneurship. These
dominance
Source: collation of this study.
Schumpeter, the pioneer of modern entrepreneurship theory, thinks that innovation is the
essence of entrepreneurship, and entrepreneurship is a "creative destruction process". After
Schumpeter, American economists made outstanding contributions to entrepreneurship.
Knight (1916) directly defined entrepreneurship as the spirit of innovation and risk-taking to
open new paths with the most creative actions in the face of uncertainty. Drucker (1985)
believes that entrepreneurship is an innovative way to creatively utilize existing resources to
achieve innovation. Peter Senge, a contemporary management scientist, has a more pragmatic
understanding of entrepreneurship, believing that entrepreneurs are "a group with the
greatest power to change the world and create a fair and just society. When faced with human
survival crises such as hunger, poverty, environmental deterioration, and moral decay,
entrepreneurs should give up their responsibilities " Subsequently, the research on
entrepreneurship is becoming more and more detailed. Gartner, a well-known IT research and
consulting organization in the United States, has studied the understanding of
entrepreneurship in academic, business, and political circles, and found that entrepreneurship
should include entrepreneurs' personality characteristics and abilities, innovation, resource
reallocation and utilization, value creation, enterprise growth, unique thinking mode, strategic
vision, and the ability to develop potential opportunities.

Enterprise Growth
The concept of enterprise growth was once abstracted from mainstream economics to increase
or decrease production capacity. Finally, through the efforts of Penrose (1959) and other
scholars, the "black box" of the enterprise growth process and growth difference was gradually
uncovered, and the research on enterprise growth led to the exploration of enterprise
resources and capabilities. Traditional research measures the growth of enterprises with the
expansion of enterprise scale. Since Penrose (1959), the discrimination of enterprise growth is
no longer limited to scale expansion, but extended to scale expansion and capacity
improvement, thus more comprehensively reflecting the connotation of enterprise growth. The
theory of enterprise growth has also jumped from the equilibrium "theory" held by economics
school to the two mainstream theories of management: the resource-based view and the
capability-based view. In the research on enterprise growth, how to judge the growth of an
enterprise becomes a difficult point. (Pedersen et al. 2020; Thomas 2021; Wei et al. 2014; Zahra
& Covin 1995; Zhai et al. 2018; Sirmon et al. 2017; Subramaniam 2021). According to the needs

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of research, scholars judge the growth of enterprises from different angles, generally including
"quantitative change" and "qualitative change" of enterprise growth. "Quantitative change"
mainly refers to the expansion of enterprise scale, and "qualitative change" mainly refers to the
promotion of enterprise growth ability.
1. Expansion of enterprise scale
How to distinguish the growth of enterprises is the main difficulty in relevant research. The
most intuitive judgment of enterprise growth is economic scale expansion, including
production scale, market scale, and management scale, among which production scale
expansion is the main measure taken by scholars at present.
(1) Expansion of production scale
Adam Smith (1776), a representative of classical economists, believes that the improvement of
production division and specialization can promote the expansion of production scale, then
realize economies of scale with increasing returns to scale, and finally make the scale of
enterprises change from small to large, and realize the expansion. John Mill (1848), based on
Adam Smith's theory of production scale expansion and enterprise growth, further extended
the theory of production scale expansion to the scale expansion of capital stock. Scholars
mostly use indicators such as total assets and the number of employees to measure the
production scale of enterprises (Richardson, 2006; Hermuningsih, 2018), and use asset
increase rate or employee increase rate to measure the expansion of the production scale of
enterprises.
(2) Expansion of market scale
Marshall (1890) thought that the market scale of enterprises may reach a very large scale, and
it can continue to grow until the industry monopolizes. In the process, the market influence of
enterprises will be continuously strengthened. The economies of scale of monopoly enterprises
may also benefit the public, and the economies of scale generated by the large-scale production
capacity brought by monopoly may greatly reduce the unit cost of products. Most of them are
"oligopolies", that is, there is a limited monopoly. Therefore, the price increase brought by
monopoly may help attract new entrants, thus breaking the monopoly structure of the market
and promoting the growth of new entrants. Most scholars use market share or sales to measure
the market size of enterprises (Ray et al. 2018) and use market share increase or sales growth
rate to measure the market size expansion of enterprises (Jiao, & Yang, 2019).
(3) Increased management team
The bigger the management team, the stronger the management ability. Williamson (1975)
believes that the complicated hierarchical division of labor system is more effective than
vertical and holding structure systems, because the expansion of management scale reduces
the internal transaction costs of the organization, and the cost saved is greater than that
generated by the expansion of management scale. The complicated organizational form of the
business division system is to adapt to the expansion of enterprise production scale and market
scale and improve the efficiency of resource allocation. At present, the commonly used
indicators to measure the scale of enterprises are assets, sales, and the number of employees.
Although management scale is considered by Penrose (1956) as a restrictive factor of
enterprise growth, there are few empirical studies on measuring enterprise scale expansion by
management scale.

Enterprise Innovation
Since Schumpeter (1934) put forward the theory of "innovation" completely and systematically
for the first time in his book "Economic Development Theory", innovation has been a hot topic
that scholars generally pay attention to. Schumpeter thinks that innovation is a process of
"creative destruction". In the dynamic process of innovation, when new equipment and
technology are introduced, old equipment and technology will be eliminated. Innovation

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implies destruction at the same time, which is an important force of technological progress.
Schumpeter believes that the key to innovation is to create or introduce new things for the
production and operation of enterprises, which has been the mainstream of innovation theory
research for many years. Schumpeter innovation is mainly aimed at manufacturing enterprises.
Schumpeter-style innovation holds that innovation is a "new combination" of new production
factors and production conditions, which includes five types: new products, new production
methods, new markets, new raw material supply sources, and new organizational forms. After
Schumpeter, scholars began to study innovation from different perspectives, and a large
number of academic literatures on market innovation, process innovation, management
innovation, and product innovation emerged, among which technological innovation is the
focus of innovation research. With the rise and rapid development of the tertiary industry and
the Internet, some scholars have further expanded the connotation of innovation and put
forward service innovation (Lusch and Nambisan, 2015) and business model innovation (Guo,
2019 & ClauG, 2017), and other concepts. Some scholars believe that innovation is a process
from creativity to commercialization (Utterback, 1974; Roberts, 1988; Zhang, et al., 2019).

Enterprise innovation is a multi-dimensional concept. Scholars have divided the dimensions of

enterprise innovation into three aspects: innovation object, innovation intensity, and
innovation method. According to different innovation objects, scholars divide enterprise
innovation into technological innovation, product and service innovation, process innovation,
strategic innovation, management innovation, organizational innovation, and business model
innovation (Zhang, et al. 2019; Daman Pour, 2014; Casadesus-Masanell Zhu, 2013; Rennings et
al. 2013; James and Leiblein, 2013; Schumpeter, 1934). According to whether the object of
innovation includes technological change, innovation can be generally divided into
technological innovation and non-technological innovation. Schumpeter's (1934) concept of
innovation includes technological innovation and non-technological innovation. Some scholars
emphasize the importance of technical innovation. For example, in his book Invention and
Economic Growth, Schmookler (1966) thinks that understanding the technological innovation
of products and processes is the key to understanding the innovation of enterprises. Grossman
(1991) believes that all innovation of enterprises can be explained by technological innovation
and other forms of innovation are all aimed at realizing the value of technological innovation.
However, Drucker (1985) believes that innovation is to invent and create new things or change
the value of original things, open new markets and develop new customer groups, improve
labor productivity, and increase resource output, and it is not limited to whether it includes
technology. In addition, according to the different innovation intensity, scholars divide
enterprise innovation into two dimensions: gradual innovation and breakthrough innovation
(Qi, et al. 2020; Li, & Zeng, 2019; Yang Fei, 2018; Forees and Camison, 2016; Dang, et al. 2016;
Subramaniam and Youndt, 2005). According to different innovation models, scholars divide
innovation into integrated innovation (Li, & Yang, 2019), combined innovation (Li, et al. 2019),
cooperative innovation and independent innovation (Zhang, & Li, et al. 2020), closed
innovation and open innovation (Schumpeter, 1947; Gao, & Ma, 2014).

Methodology
Research Design
Firstly, this paper constructs a theoretical model of the relationship among the main variables,
such as the Spirit of Zhejiang Entrepreneurs, firm growth, and firm innovation. Based on the
theoretical analysis and local context, this paper defines the connotation of the Spirit of
Zhejiang Entrepreneurs from three dimensions: innovation spirit, risk-taking spirit, and
contract spirit, and puts forward research hypotheses. Secondly, it quantitatively measures the
Spirit of Zhejiang Entrepreneurs from three dimensions: innovation spirit, risk-taking spirit,

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and contract spirit, and comprehensively evaluates enterprise growth from three aspects:
economic value, social value, and ability improvement. Drawing on the relevant research of
scholars, the questionnaire is designed according to the standard process, and the data is
collected by the questionnaire. Through SPSS 25.0 software and AMOS 7.0, the reliability and
validity of the collected first-hand data are analyzed to test the validity of the sample data and
lay a foundation for hypopaper testing. Finally, the correlation analysis of the sample data is
used to judge the relationship among the variables, and linear regression analysis is used to
test the relationship between the dimensions of the Spirit of Zhejiang Entrepreneurs,
enterprise innovation, and enterprise growth; Secondly, Bootstrap method is used to test the
mediating effect of enterprise innovation between the Spirit of Zhejiang Entrepreneurs and
enterprise growth. Finally, the inconsistencies between the empirical test results and research
hypotheses are further discussed.

Measurement of Variables
1. Enterprise growth
Enterprise growth is a comprehensive index, and most of the research on enterprise growth
takes enterprise growth as a single dimension. With the continuous advancement of research,
the evaluation of enterprise growth has shifted from single index to multi-index. At present,
empirical research mostly adopts some indicators that comprehensively reflect the
performance and ability of enterprises to measure growth of enterprises (Sun, 2017), and the
measurement methods include objective indicators and subjective surveys. Combined with
previous research results, this study also takes enterprise growth as a single dimension, adopts
a subjective survey method to design indicators, and evaluates the change of comprehensive
strength of enterprises from three aspects: economic value growth, social value growth, and
capacity improvement, to measure the growth of enterprises.
2. The Spirit of Zhejiang Entrepreneurs
Drucker (1985) believes that the core of entrepreneurship is the spirit of innovation. Covin and
Slevin (1991) divided the entrepreneurial spirit into the innovative spirit, adventurous spirit,
and competitive spirit. Based on this dimension division of entrepreneurship, foreign scholars
have expanded the dimension of entrepreneurship in many ways around the spirit of
innovation and adventure, but there is no unified standard for dividing the dimension at
present. Domestic-related research mainly refers to the research results of the West. This paper
holds that the Spirit of Zhejiang Entrepreneurs is inseparable from the specific social
environment and economic development level, and the existing scholars' dimension division of
the Spirit of Zhejiang Entrepreneurs is difficult to reflect the special background of our country.
At present, to promote high-quality economic development and healthy growth of enterprises,
Zhejiang entrepreneurs need not only to carry forward the spirit of innovation and adventure
but also to vigorously carry forward a series of other excellent qualities including dedication,
honesty, cooperation, dedication, and self-worth realization. According to the definition of the
Spirit of Zhejiang Entrepreneurs (The Spirit of Zhejiang Entrepreneurs is composed of a value
system and behavior tendency, its essence is innovation, and its main content includes
pursuing innovation and excellence, being brave and taking risks, and abiding by contracts),
this paper sums up these excellent qualities of entrepreneurs as contract spirit and combines
the core content of the Spirit of Zhejiang Entrepreneurs, divides the dimension of the Spirit of
Zhejiang Entrepreneurs into three dimensions: innovation spirit, risk-taking spirit, and
contract spirit.
(1) Innovative spirit
Innovative spirit is the behavioral tendency of entrepreneurs to pursue new opportunities
(Lumpkin and Dess, 1996). Entrepreneurs often purposefully seek innovation opportunities in
environmental changes and a series of signs and actively formulate and implement innovative

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plans to seize new opportunities, which is the embodiment of the entrepreneurial innovation
spirit (Drucker, 1985). An innovative spirit is embodied in the whole process of entrepreneurs
finding, evaluating, and utilizing opportunities and creating new products and services (Shane
and Venkataraman, 2000). Innovative spirit includes entrepreneurs' innovative thinking mode,
innovative behavioral tendency, and a series of actions to take innovative actions.
(2) Risk-taking spirit
Risk-taking is the nature of entrepreneurs. Entrepreneurs' innovative and entrepreneurial
activities are accompanied by many uncertainties, and there are unpredictable risks at any
time. Drucker (1985) thinks that when entrepreneurs transfer resources from low productivity
to high productivity, there is a risk of failure. Lee and Peterson (2000) think that a risk-taking
spirit is the entrepreneur's acceptance of risk. Cantillon and Knight also associate the Spirit of
Zhejiang Entrepreneurs with risk-taking and uncertainty. Knight (1916) believes that people
who cannot take risks independently cannot become entrepreneurs. Entrepreneurs must be
brave enough to take risks to seize the fleeting opportunities for development. Miller and
Friesen (1983) believe that risk-taking refers to the willingness to invest important resources
in uncertain opportunities and the degree of commitment to large-scale high-risk projects.
Therefore, the spirit of taking risks should be the attitude towards risks and uncertainties, the
active and bold actions taken, and the corresponding degree of risks and uncertainties.
(3) The spirit of contract
Contract spirit is the product of the transition from a natural economy to a commodity economy
and identity society to a contract society, and it is a spiritual culture that grows with a market
economy, commodity economy, and democratic politics (Li, 2018). The spirit of a contract
comes from a contractual relationship. The enterprise itself is a collection of a series of
contractual relationships (Wang, 2014), including explicit contracts such as written laws and
regulations and commercial contracts, and implicit contracts such as unwritten social contracts
and psychological contracts. Honesty is the ethical basis of contract spirit, and law is the
bottom-line requirement of contract spirit. Violation of explicit contracts or implicit contracts
will affect the long-term survival and sustainable development of enterprises (Diao, 2013).
Entrepreneurs are agents of enterprises internally and represent enterprises externally.
Therefore, entrepreneurs not only need to fulfill the obligation of agency management but also
need to abide by explicit contracts such as written laws and regulations and commercial
contracts, as well as implicit contracts such as non-becoming moral norms and conventions.
The spirit of contract is the consciousness and action of entrepreneurs to abide by various
contractual relationships.
3. Enterprise innovation
Existing studies usually discuss enterprise innovation as a single dimension or discuss the
influence of a certain aspect of enterprise innovation. Enterprise innovation is a comprehensive
enterprise innovation faced by enterprise management. To guide for optimizing the current
business environment, this study discusses enterprise innovation as a single dimension.
Combined with the discussion of enterprise innovation content in this study, this paper draws
lessons from the research of Fan Gang and Wang (2016) to evaluate enterprise innovation from
the aspects of the relationship between government and the market, the market competition
environment, and the level of rule of law. A scale is a tool that transforms abstract conceptual
variables into measurable items and carries out quantitative measurement. To test the
theoretical model proposed in this paper, it is necessary to quantitatively measure the
conceptual variables involved in the model, so it is necessary to design a scientific,
standardized, and reasonable scale. Scale design is an important link in sample selection and
data quantitative tests, and its accuracy directly determines the effectiveness and reliability of
the hypothesis test results of the relationship between quantities. In the process of variable
selection and use, except that the contract spirit scale is developed by us, other scales all draw

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lessons from foreign maturity scales. To better express the meaning of research ideas and
items, this study follows the procedure and principle of "translation-back translation” and
revises the scale according to the actual situation and Chinese expression habits, combined
with the results of expert discussion, to make the scale design as effective and reasonable as
possible.
1. Dependent variable: Enterprise growth
Enterprise growth is the dependent variable of this paper. Based on the relevant research of
Haber and Reichel (2005), Zhao (2019), etc., this paper comprehensively evaluates the change
of comprehensive strength of enterprises from three aspects: economic value, social value, and
ability improvement, to measure the growth of enterprises. Based on this, a scale containing 13
items is designed, as shown in Table 3-1 for details. The scale covers the expansion of
"quantity" and the improvement of "quality" of enterprises, which is in line with Penrose
(1959)
Table3- 1 Enterprise Growth Scale

Numberin
Measurement plane g Measurement item Source
The total fixed assets of the company have Haber and
CZ1 increased obviously Reichel (2005), Zhao
The market share of the company has increased (2019)
CZ2 significantly
The company's sales revenue has increased
CZ3 significantly
The profit margin of the company has increased
CZ4 significantly
Economic value The company's consumer satisfaction has
increase CZ5 improved significantly
The market value of the company has been
CZ6 significantly improved
The social image of the company has been
CZ7 significantly improved
The industry status of the company's main
CZ8 products has been significantly improved
The asset structure of the company has been
Increased social value CZ9 significantly improved
The risk management level of the company has
CZ10 been significantly improved
The company's ability to cope with environmental
CZ11 changes has been significantly improved
The ability of the company to identify
CZ12 development opportunities has been significantly
Enterprise capability CZ13 improved
The overall competitiveness of the company has
improvement been significantly improved
Source: Author's collation

2. Independent variable: The Spirit of Zhejiang Entrepreneurs

The Spirit of Zhejiang Entrepreneurs is the driving force for Zhejiang enterprises to overcome
internal and external difficulties and last forever, and it is also the source of power for
successfully building Zhejiang enterprises. The Spirit of Zhejiang Entrepreneurs is manifested
as an innovative spirit, risk-taking spirit, contract spirit, etc., which is embodied as
entrepreneurs' never-ending value pursuit. Based on the previous definition of the Spirit of
Zhejiang Entrepreneurs, this paper measures the Spirit of Zhejiang Entrepreneurs from three
dimensions: innovation spirit, risk-taking spirit, and contract spirit. The specific measurement
process is described as follows:
(1) Innovative spirit
Covin and Slevin (1989) first developed entrepreneurship from three dimensions: innovation,
risk-taking, and pioneering. The internal consistency of this scale is 0.937, and the consistency

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of innovation, risk-taking, and pioneering is 0.857, 0.853, and 0.842, respectively, which has
good constructive validity. This scale is generally adopted by scholars at home and abroad. This
paper also uses the scale developed by Covin and Slevin (1989) to measure the innovative spirit
of Zhejiang entrepreneurs. See Table 3-2 for specific measurement items.

Table3- 2 Zhejiang Entrepreneur Innovation Spirit Scale

Dimension Numberin Measurement item Source
Innovative spirit gCXJS1 I always consider introducing new products and services to the market Covin and
Slevin
CXJS2 I always consider pushing products and services to new markets (1989)
CXJS3 I always consider adopting new ways and means to conduct business
CXJS4 I like to try new ways to achieve my goals
CXJS5 I like to solve problems in innovative ways
CXJS6 I often see problems and changes as opportunities
CXJS7 I am good at integrating thought problem resources from different
Source: Collation of this study sources and applying them to new fields

(2) Risk-taking spirit

A risk-taking spirit is an entrepreneur's risk preference and attitude toward uncertainty. Based
on the maturity scale developed by Covin and Slevin (1989), this paper measures Zhejiang
entrepreneurs' risk-taking spirit from the aspects of entrepreneurs' attitude towards
uncertainty, risk-taking, and the degree of risk-taking. See Table 3-3 for specific measurement
items.

Reliability and Validity Test

When using a questionnaire to collect data, only when the reliability and validity of the scale
are convincing can we get valuable research results. The research items come from literature
research and expert discussion. Although the scale has a certain validity guarantee, it still needs
to carry out internal consistency tests, reliability, and validity analysis on the recovered sample
data to further test its effectiveness. This study is based on the results of expert interviews and
discussions to develop the entrepreneur contract spirit scale, so we need to use exploratory
factor analysis to test the effectiveness of the contract spirit scale. Because the spirit of contract
is a dimension of the Spirit of Zhejiang Entrepreneurs, this study uses 58 sample data collected
in the pre-investigation stage to conduct exploratory factor analysis on all measurement items
of the Spirit of Zhejiang Entrepreneurs variables. The internal consistency of the Spirit of
Zhejiang Entrepreneurs was 0.911.
1. Reliability analysis of the Spirit of Zhejiang Entrepreneurs scale
(1) Reliability analysis of items of innovative spirit scale
Reliability analysis of seven items of the innovative spirit scale is carried out, and the results
are shown in Table 3-9. The analysis results show that Cronbach's A of innovative spirit factor
is 0.837, which is greater than 0.8, indicating that its reliability is good and meets the research
needs. According to Cronbach's A after deleting items, deleting any items can not increase the
overall reliability of the scale, so it is not recommended to delete them, and finally keep the
seven items with innovative spirit.

Table3- 3 Reliability analysis results of innovative spirit scale (N=58)

Scale Question Scaled average Scale side after Correlation After deleting the Cronbach's
Innovative item after deleting deleting item between item A
CXJS1 24. 66
items 14. 393
Difference 0.432
revised items 0.831
Cronbach's 0.837
spirit
CXJS2 24. 66 15.312 0. 350
and totals 0.830
A
CXJS3 24. 34 14. 664 0.659 0.810
CXJS4 24. 47 14. 040 0.676 0.804

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CXJS5 24. 97 12.243 0.692 0.797

CXJS6 24.87 12.280 0.724 0.791
CXJS7 24. 76 13.915 0.686 0.802

Findings
Summary of Respondents
1. Distribution characteristics of samples
A total of 323 samples were collected in the formal investigation stage of this study, and the
distribution characteristics of the samples are shown in Table 4-1. According to the distribution
characteristics of samples, the samples collected in this paper are close to the actual situation
and can meet the requirements of empirical research.

Table4- 1 Sample Distribution Characteristic Distribution (N=323)

Project Classification Quantity Proportion Project Classification Quantity Proportion (%)
(%)
Within 3 years 26 8 Male 220 68.10
3 ~ 5 years 32 9.9 Female 103 31.90
5 ~ 10 years 67 20. 7 Under 20 5 1.50
Company 10-20 years 101 31.3 years
20-30oldyears 62 19.20
Establish old
Years Over 20 years 97 30 30-45 years 178 55.10
old
45 to 55 years 75
Less than 1 million 27 8.4 Gender 23.20
old
Over 55 years 3
1 million to 5 million 40 12.4 Age 0.90
5 million to 30 million 88 27.2 Highest old
Junior college 19 5.90
Company 30 million to 100 47 Educational or below
Registration million 14.6 background Junior college 33 10.20
Capital More than 100 121 37.5 Undergraduat 138 42.70
million eMaster
course
Under 100 persons 90 27.9 113 35.00
graduate
Doctoral
100 to 200 persons 34 10.5 student 20 6.20
200 to 500 people 48 14.9 In Ben students
Within 3 years 90 27.90
Company
Employees Company
Number of 500 ~ 1000 people 28 9.7 Work 3 ~ 5 years 76 23.50
people More than 1000 123 38.1 Years 5 ~ 10 years 95 29.40
people
State-owned 72 22.3 Over 10 years 62 19.20
enterprises
Non-state-owned 251 77.7
enterprises
Traditional 99 30.7
manufacturing
Company Service
industryindustry 85 26.3
Nature
Belonging to High-tech industry 96 29.7
Industry Other industries 43 13.3

2. Descriptive statistical analysis

In this study, SPSS25.0 software is used to analyze the correlation of the variables involved in
this study. The analysis results of the mean value, standard deviation, and correlation
coefficient of all variables are shown in Table 4-2. The analysis results show that there is a
significant positive correlation among the variables such as entrepreneurial innovation spirit,
risk-taking spirit, contract spirit, enterprise innovation and enterprise growth, which is
consistent with some assumptions of this study, and lays the foundation for the next hypopaper
testing process.

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Table4- 2 Descriptive and Correlation Analysis (N=323)

CZ CXJS FXJS QYJS JSCX SYMS YSHJ Age Scale

Average 3.60 3.94 3.71 4.13 3.97 3.96 7.88 3.65 3.19
Standard 0.66 0.64 0.63 0.50 0.83 0.66 2.70 1.23 1.67
deviation
CZ 1
CXJS 0.45** 1
FXJS 0.38** 0.51** 1
QYJS 0.27** 0.31** 0.40** 1
JSCX 0.39** 0.36** 0.30** 0.25** 1

SYMS 0.46** 0.32** 0.23** 0.44** 0.36** 1

YSHJ 0.04 0.03 -0.05 0.17** 0.04 0.08 1
Age 0.02 -0.12* -0.09 -0.08 -0.01 -0.08 0.07 1
Scal 0.17** -0.16** -0.03 -0.08 0.09 -0.06 0.05 0.64** 1

Note: * means P < 0.05, * * means P < 0.01, Where P is double-tailed

significance

Table4- 3 Regression Results of the Relationship between the Spirit of Zhejiang

Entrepreneurs and Enterprise Growth (N=323)
Enterprise growth Enterprise Technological innovation Business model
growth innovation
A1 A2 A3 B1 B2 C1 C2 C3 D1 D2 D3
CXJS 0.50** 0.71** 0.65*
* * **
FXJS 0.40* 0.60*** 0.65**
** *
QYJS 0.37** 0.75** 0.73**
* * *
JSCX 0.30**
*
SYMS 0.46*
**
Natru -0.02 0.06 -0.07 0.04 0.09 - -0.24* - - - -
e 0.12** 0.32** 0.16* 0.26** 0.34**
* * *
Scale 0.10** 0.13* 0.11** 0.09** 0.10* 0.10
0.05 0.08 0.04 0.01 0.03
* ** * **
Age -0.07* -0.05 -0.07 -0.06 -0.06 -0.05 -0.02 -0.04 -0.03 0.01 -0.02
Indust Contr Contr Contro Contr Contr Contr Contro Contr Contr Contro Contr
ry ol ol l ol ol ol l ol ol l ol
R2 0.53 0.46 0.34 0.44 0.27 0.63 0.57 0.57 0.64 0.57 0.59
F 17.99 11.95 7.85 10.88 16.78 29.81 21.18 21.13 31.09 21.63 24.18
Note: * means P<0.05, * * means P<0.01, where P is two-tailed significance.

Table4- 4 Regression Results of the Relationship between the Spirit of Zhejiang

Entrepreneurs and Enterprise Growth-Comparison of Different Company Properties
(N=323)
Enterprise growth Enterprise Technological innovation Business model
growth innovation
A1 A2 A3 B1 B2 C1 C2 C3 D1 D2 D3
CXJS 0.53** 0.68** 0.61*
* *
FXJS 0.57*** 0.51**
*
QYJS 0.77** 0.75**
* *
JSCX
SYMS

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Natur 0.54 0.29 1.01 0.98** 0.76 -0.65 -0.84 0.05 0.77 -1.25 0.01
e
Natur -0.13 0.14 0.16
eCXJS
Natur 0.07 0.16 0.27*
eFXJS
Natur -0.26* -0.07 -0.08
eQYJS
Natur -
e 0.25**
JSCX
Natur -0.17*
eSYMS
Contr Contro Contr Contro Contr Contr Contr Control Contr Contr Contr Contro
ol l ol l ol ol ol ol ol ol l
R2 0.54 0.46 0.49 0.46 0.53 0.63 0.57 0.57 0.65 0.58 0.55
F 15.89 10.46 10.19 10.74 15.11 26.22 18.65 18.47 27.59 19.65 21.09
Note: * means P<0.05, * * means P<0.01 and * * * means P<0.001.
According to the above assumptions, enterprise innovation not only has a direct impact on
enterprise growth but also plays a bridge role between the Spirit of Zhejiang Entrepreneurs
and enterprise growth. In this paper, the Bootstrap method is used to test the mediation effect,
Bootstrap=5000, and the confidence level is set at 95%. If the 95%CI (confidence interval) of
the mediation effect does not contain 0, it indicates that the mediation effect is significant; If
the 95%CI of the mediation effect includes 0, the mediation effect is not significant. This paper
constructs a theoretical model of the influence of the Spirit of Zhejiang Entrepreneurs on
enterprise growth, discusses the influence mechanism of the Spirit of Zhejiang Entrepreneurs
on enterprise growth, and the intermediary role of enterprise innovation, and makes an
empirical analysis and hypothesis test on the theoretical model through 323 sample data. See
Table 4-8 for a summary of hypothetical test results. This paper puts forward 21 research
hypotheses, and through empirical analysis, 21 of them are supported. The research results
show that both the Spirit of Zhejiang Entrepreneurs and enterprise innovation can obviously
promote the growth of enterprises, and enterprise innovation plays an obvious intermediary
role between the Spirit of Zhejiang Entrepreneurs and enterprise growth, and enterprise
innovation has a partial intermediary role in its mechanism. (Wei et al. 2014; Zahra & Covin
1995; Zhai et al. 2018; Sirmon et al. 2017; Subramaniam 2021).

Conclusion
With the globalization of the economic market and the rapid development of science and
technology, the upgrading of products is accelerating day by day. High-quality development of
the economy puts forward higher requirements for the growth of Zhejiang enterprises.
Carrying forward the excellent the Spirit of Zhejiang Entrepreneurs and promoting the high-
quality development of Zhejiang enterprises have been mentioned at a strategic height. Based
on this, this study analyzes the relationship among the Spirit of Zhejiang Entrepreneurs,
enterprise innovation, and enterprise growth in theory by combing the relevant literature and
constructing a theoretical model of the influence of the Spirit of Zhejiang Entrepreneurs on
enterprise growth with enterprise innovation as the intermediary variable. The Spirit of
Zhejiang Entrepreneurs is defined as innovation spirit, risk-taking spirit, and contract spirit,
and enterprise innovation is defined as technological innovation and business model
innovation. (Drucker 1985; Dunford et al. 2010; Guan et al. 2019; Pedersen et al. 2020; Thomas
2021; Wei et al. 2014; Zahra & Covin 1995; Zhai et al. 2018; Sirmon et al. 2017; Subramaniam
2021). This paper analyzes the internal mechanism that affects the growth of enterprises and
puts forward research hypotheses. First-hand data obtained through a questionnaire survey is
used to test the conceptual model and research hypothesis, and the following conclusions are
drawn. The Spirit of Zhejiang Entrepreneurs plays an important role in promoting enterprise

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growth. The Spirit of Zhejiang Entrepreneurs is an important driving force for enterprise
growth. Although many theoretical studies have confirmed this influence, the existing studies
mostly focus on the two core elements of innovation spirit and risk-taking spirit, and extend
them to other elements such as competition spirit, cooperation spirit, sense of responsibility,
dedication spirit, enterprising spirit, etc. And there is no research involving the entrepreneur's
contractual spirit. Based on the needs of the times to promote the excellent the Spirit of
Zhejiang Entrepreneurs and promote the transformation and upgrading of enterprises and
high-quality development, this study puts the spirit of contract into the study of the Spirit of
Zhejiang Entrepreneurs and divides the spirit of Zhejiang Entrepreneurs into three
dimensions: innovation spirit, risk-taking spirit, and contract spirit to study its influence
mechanism on enterprise growth. It is found that entrepreneurs' innovative spirit, risk-taking
spirit, and contractual spirit have a significant direct role in promoting the growth of
enterprises. The more innovative entrepreneurs are, the more conducive they are to the
growth of enterprises (Guan et al. 2019; Zhai et al. 2018). The innovative spirit of
entrepreneurs affects the business dynamics and strategic orientation of enterprises and urges
enterprises to pay more attention to the acquisition and utilization of external resources and
the optimal allocation of internal resources. The innovative spirit of entrepreneurs promotes
enterprises to collect market information quickly, sort out and analyze valuable information,
find market gaps, and identify new growth opportunities. The innovative spirit of
entrepreneurs will also stimulate the external resource demand of enterprises and improve
their resource acquisition ability (Liu, 2019). The enterprise's strong demand for resources can
urge enterprises to actively seek external resources and devote themselves to obtaining and
distributing these resources to meet the needs of enterprise growth. Entrepreneurial risk-
taking spirit has a significant role in promoting the growth of enterprises. There are many
uncertain factors and risks in the growth process of an enterprise. Entrepreneurs with high
risk-taking spirits usually have a positive and optimistic attitude and dare to face uncertainty
and take business risks. (Drucker 1985; Dunford et al. 2010; Guan et al. 2019; Pedersen et al.
2020; Thomas 2021; Wei et al. 2014; Zahra & Covin 1995; Zhai et al. 2018; Sirmon et al. 2017;
Subramaniam 2021).

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Cite this article:

HAN GANG (2023). A Study of Spirit of Zhejiang Entrepreneurs, Enterprise Innovation and
Enterprise Growth in China. International Journal of Science and Business, 23(1), 75-90. doi:
https://doi.org/10.58970/IJSB.2135

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