Scaffolds and Intermediaries: How Changing Institutional Infrastructure Can Alleviate Normative and Cognitive Barriers

(in cooperation with the DFG Workshop “INNOVATION IN CHINA”)

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Scaffolds and Intermediaries: How Changing Institutional Infrastructure Can Alleviate Normative and Cognitive Barriers to Regulatory Changes Supporting Entrepreneurship

Abstract

What institutional infrastructure helps overcome normative and cognitive barriers to regulatory change? We focus on two forms of infrastructure: institutional scaffolds that enhance the market relevance of technical knowledge and institutional intermediaries that link two or more disparate parties to bring about activities that would not occur otherwise. We use the case of the Chinese Academy of Sciences (CAS)’ Knowledge Innovation Program (KIP) to understand the role of such infrastructure on institutional change. Following KIP, CAS institutes tried to build scaffolding that  serves as cognitive support for regulatory change. Also following KIP, science parks help create   shared standards across the public and private sector regarding how to structure a high-tech venture, and, as intermediaries, serve as normative support for regulatory change. After KIP, founding rates increase, especially in provinces with more local CAS institutes. Moreover, those firms were more likely to subsequently locate inside science parks. Our study contributes to studies at the nexus between institutional change and entrepreneurship by highlighting the role of institutional infrastructure in linking cognitive and normative support to regulatory changes aimed at increasing entrepreneurship.