| Summary: | Using a unique census dataset on all industrial firms (with more than 5 million yuan
in sales), we document a phenomenon of missing entrepreneurship in Shanghai.
Entrepreneurship is defined as private, new entrants in our paper. Specifically, in terms of business density, the size of employment and a host of other measures, the relative ranking
of Shanghai was always near the bottom in the country. All these empirical findings took place against a backdrop of the presumably huge locational advantages of Shanghai -- the substantial human capital, rapid GDP growth, and a long and stellar -- but pre-communist --
history of entrepreneurship. We propose a hypothesis that Shanghai adopted a particularly
rigorous version of industrial policy model of economic development and this industrial
policy proclivity may have led to the atrophy of entrepreneurship in Shanghai.
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