Private business is booming in China and the entrepreneurial spirit sweeps through the country. However, the apparent contradiction between Marxist ideology and private ownership has not been satisfactorily resolved. The ideological problems of labor exploitation and income polarization associated with private business have serious repercussions on policy implementation and have constrained the entrepreneurial development. Operating in a hostile institutional environment, many private entrepreneurs in China demonstrate some peculiar behavior seldom found In other countries. By using the concept of legitimacy, it is argued here that the entrepreneurs behavior is the result of their strategic responses to their less-than-legitimate status.
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