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counterpart  in  China.  If  a  sector  closely  mirrored
             its  Chinese  counterpart,  it  was  classified  as  better
             “suited” to emulate China’s business models. Venture
             capital  investment  growth  in  emerging  markets
                           sectors,
                           A
             one  standard  deviation  increase  in  a  sector’s  China
                           in
                       sectors.
             These findings suggest that China’s rise inspired new
             venture  activity  in  developing  country  sectors  that
             share similar business challenges to those in China.
                                                                  Venture-backed firms that imitate business
                                                                   models of Chinese firms (by country type)


                                                               Emerging  market  entrepreneurialism  following
                                                               Chinese  examples  boosted  firm  growth  and
                                                               serial  entrepreneurialism  even  beyond  China-led
                                                               sectors.  Emerging  market  venture  backed  firms
                                                                           scores
                                                                                 All
                                                                             industry
                                                               also increased the number of serial entrepreneurs
               Average sector similarity to China versus the U.S.  in  emerging  markets,  and  their  venture  activity
                                                               later  spilled  over  into  sectors  not  led  by  China.
             Emerging market entrepreneurialism driven by      Researchers also observe that in cities with a higher
                     examples.  Only                           preexisting  share  of  firms  in  China-led  sectors,
             2.5% of emerging market deals outside China involve   there was substantial growth in business formation
             a  Chinese  investor,  and  just  0.5%  are  exclusively   and  patenting  activity,  including  in  sectors  with
             backed by Chinese investors. Instead, local investors   few existing Chinese firms. Finally, the researchers
             appear to be investing in local firms that learn from   offer suggestive evidence that the China-driven rise
             and adapt business ideas and models first developed   in  emerging  market  entrepreneurialism  in  sectors
             in  China.  Using  Natural  Language  Processing  tools             productivity
             to  measure  similarity  in  business  descriptions,  the               as
             researchers  show  that  the  growth  in  emerging          Indicators.
             market  entrepreneurship  following  China’s  rise  is
                         similarity                            New  entrepreneurial  hub,  wider  entrepreneurial
             between  the  description  of  new  emerging  market  diffusion.   The  unprecedented  growth  of
             firms and Chinese firms founded in the same sectors   entrepreneurship  in  China  has  spurred  business
             during  the  preceding  five  years.  For  example,  the               earlier
             educational technology startup Byju in India shares          emerging
             80%  textual  similarity  to  China’s  sector-leading           emulated
             Yuanfudao. This trend appears regardless of whether   Chinese  companies  confronting  similar  problems
             a  sector  was  strategically  prioritized  by  China’s               of
             government or whether a country was aligned with         entrepreneurialism
             China politically.                                            VCs.
                                                                         learn
                                                                             China.
                                                                             wide-ranging
                                                                         increased
                                                                         and
                                                                           suggest
                                                               there could be large benefits if emerging innovation
                                                               hubs (whether in China or elsewhere) shift the focus
                                                               of technology toward applications overlooked by the
                                                               U.S.-led system.








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