This research aims to investigate ethical values, social insurance, and start-up success inChina. Recent research into entrepreneurship, eg, Woiceshyn (2011), focuses on therelationship between ethics and the success of entrepreneurship, and proposes that anentrepreneur’s ethical values are a critical factor for his or her entrepreneurial success.However this critical success factor (“CSF”) belief has not been fully explored inscholarly discussion, in the context of the entrepreneurial world. The CSF belief isbased on rational egoism, which assumes ethics as a necessary guidance to long-termself-interest such as success in business. This thesis is intended to examine the validityof the CSF belief through elaborating a mediation model of how entrepreneurs’ ethicalvalues affect their start-up success in China.I will test whether or not an entrepreneur’s ethical values (familism, integrity, workethics, anti-individualism, and emphases on reputation, trust, and reciprocities) arerelated to his or her start-up performance (in terms of growth percentage of totalincomes/revenues) and success (in terms of survival time), through the mediation ofhis/her practices of social insurance to employees in start-up.I will draw on existing researches on the ethical decision-making of entrepreneurs, andin particular on Solymossy and Masters (2002), to propose a model of social insurancedecision-making by small business entrepreneurs. I suggest some ways (ie, the need forthe integration of cash or financial considerations, ethical tolerance, technologicalimpact, ethical implementation, and the relationship to performance and success) inwhich the social insurance framework of entrepreneurs may differ systematically fromthat of other businesses.The investigation of the social insurance decision-making model shows that Chineseentrepreneurs tend to follow rational or material (short term or long term), ideologicaland reputational criteria, when making social insurance decisions. However, cash orfinancial considerations seem to stand out but not to dominate ethical concerns withrespect to their impact on social insurance decisions. Aside from the considerations ofcash or financials, once the confounding effects of ethical tolerance and technologicalimpact are controlled, ethical values have a true effect on social insurance decisions.Furthermore, social insurance implementation can be influenced as a result of ethicalconsiderations in small and medium enterprises (“SMEs”) overall. My investigation hasdemonstrated that ethical values are related to social insurance decisions.An in-depth analysis of the research results has suggested that entrepreneurs’ ethicalvalues influence the performance or success of a new venture. Meanwhile, some lessethical implementation actions, eg, circumventing and escaping, and pushing for aminimum standard of social insurance have significant but negative correlations withthe growth rate, and/or with survival time. The mediation effects are thereforedependent on the implementation conditions.The analytic procedures have revealed a mediation model: the ethical value of workethics (rejecting others’ indolence and wallowing in luxuries and pleasures) arepositively related to the start-ups’ survival time, by means of not trying to lowerinsurance premiums through reducing employees’ total wages. Future studies willexplore this mediation model.My investigation has, to certain extent, validated the argument that entrepreneurs’ethical values are a critical factor in the success of entrepreneurship, although Iacknowledge that this mediation model will need future research in order to be fullyjustified.
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