Spatial distribution and business environment of specialized and sophisticated Little Giant enterprises in Zhejiang Province

Abstract

“Little Giant” Enterprises (LGEs) are leading exemplars of China’s specialized and sophisticated small and medium-sized enterprises, playing a critical role in national industrial upgrading and innovation. Understanding the specific business environment configurations that foster these high-potential firms is a significant and practical research question. This study investigates the spatial distribution of LGEs and the characteristics of the regional business environment in Zhejiang Province, which hosts the largest number of LGEs in China. Based on adaptation theory, we employ a multi-method approach, integrating Qualitative Comparative Analysis (QCA) and Data Envelopment Analysis (DEA). Our analysis of 90 districts and counties reveals that the spatial distribution of LGEs is unbalanced and can be categorized into three distinct groups. The QCA results show that no single business environment element is a necessary condition for high LGE density; instead, we identify nine distinct configuration paths that lead to this outcome across the different groups. A key finding is that good financial services and a robust market environment are common core conditions across most paths. Furthermore, DEA results indicate that the traditional approach of optimizing individual elements is inefficient, underscoring the necessity of strategic, synergistic combinations. This research provides a novel configurational perspective on regional development policy, offering valuable theoretical insights and practical guidance for municipal authorities seeking to cultivate specialized and sophisticated enterprises.