Abstract: Based on Chinese annual provincial data from 2006 to 2010, this paper explained how “Chinese puzzle” and differences among regional economic development happened through empirical study byusing regional viability of firms (RVF) as the proxy variable of regional economic development. The results suggest that government governance and social capital are the two significant decisive factors for RVF. While the latter one’s effect can be described by the inverse U curves, the former one has both direct effects and indirect effects on RVF through adjusting the latter one’s effects. Meanwhile, there are asymmetric interactive relationships between government governance and social capital in shaping RVF. For example, government governance has significantly adjusting influence on the effects of political connection, while internal social capital and business intermediary network of firms can partly substitute the effects of government governance.
Keywords: Social Capital, Government Governance, Viability of Regional Firms
source:Finance & Trade Economics ,No9,2013