Document Type

Paper Series

Publication Date





Since the implementation of economic reforms in 1978 in the People's Republic of China, entrepreneurs have emerged as a new consumer group. With rising income and high consumption power, entrepreneurs have become major consumers for expensive goods and services. However, little research has been carried out to understand their consumption decisions. In this paper, we study the consumption patterns of small business .owners, getihu, in China by using a set of large-scale, nation-wide survey data. Their consumption is postulated to be affected by (1) risk factors which include failure risk and financial (leverage) risk, (2) household variables such as the household size, financial and labor resources in the family, (3) the future plans of their business, and (4) home ownership. The effects of these factors on consumption patterns are evaluated. Our empirical results, based on regression and Tobit analysis, showed that all these factors are important in the consumption decisions of the entrepreneurs' households. In particular, risk and household factors are statistically significant in accounting for the variations in their consumption patterns. The marketing implications are also discussed.


HKIBS Working Paper Series 034-989

Recommended Citation

Chow, K. W. C., Fung, K. Y. M., & Ngo, H. Y. (1999). Consumption patterns of entrepreneurs in the People's Republic of China (HKIBS Working Paper Series 034-989). Retrieved from Lingnan University website:

Included in

Business Commons