Industry competition and firm productivity: Evidence from the antitrust policy in China

Xiangyi Kong, Jian Xu and Yinge Zhang

Finance Research Letters, 2022, vol. 47, issue PB

Abstract: This study examines impacts of increased industry competition on firms’ productivity. We use the enacting of China's antitrust policy as a quasi-natural experiment, and find that the total factor productivity of firm with larger market power has a significant increase after the enacting of the Chinese Anti-Monopoly Law. The possible channels behind the effects are that the rising competition pressures, brought by the enacted antitrust policy, induce firms to increase their investment efficiency and innovation output. Our findings are more pronounced to firms in cities with lower regional marketization, firms under industries with less competition, and non-financial constrained firms.

Keywords: Industry competition; Total factor productivity; Natural experiment; China (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:47:y:2022:i:pb:s1544612322002434

DOI: 10.1016/j.frl.2022.103001

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