Promoting business excellence at local level: the case of Guangdong Province, China

The purpose of this paper is to explore the relationship between medium‐large firms' industrial performance, territorial factors and local development policies.

The paper is an empirical econometric investigation based on a panel dataset of county‐level data, carried out in the Guangdong Province for the period 2000‐2008.

Results suggest a positive and significant relationship between policies at the local level and business performance. The most important determinants of industrial performance appear to be development zones and specialized towns – on the policy side – as well as the presence of urban areas, investment in innovation and FDI. Given the complexity of the relationships, further research is called for in order to build more evidence for this and other Chinese provinces.

The analysis confirms the initial hypothesis that business excellence can be influenced by the specific characteristics of the territories where firms are located, among which there might be government policies aiming at local development and encouraging a better business environment.

Relevant to the policy‐making process, results suggest that business excellence should not be viewed as only a matter of business strategies. It can be a result of territorial excellence and effective local development policies.

In the international debate there are very few papers testing the relationship between policies and industrial performances in China. Even fewer explore this relationship at the local level. This paper offers a unique county‐level perspective and in‐depth view on local industrial policies.