 Market entry deregulation and corporate vertical specialization: Evidence from ChinaChangchun Pan, Yuzhe Huang and Long Jin Economic Modelling, 2023, vol. 129, issue C Abstract: Market entry deregulation can contribute to a freer and more dynamic market environment. It not only increases entry opportunities for market participants but also has the potential to stimulate multi-node investments by firms in the industry chain. However, the effect of these market changes on the selection of the division of labor mode remains relatively unknown. Leveraging a quasi-experiment on the negative market entry list system, we utilize a staggered difference-in-differences approach to investigate the impact of market entry deregulation on corporate vertical specialization. Our findings robustly demonstrate that market entry deregulation increases corporate vertical specialization. This effect is primarily achieved through the reduction of entry barriers, the increase in sources of information, and the enhancement of the competition mechanism to reduce external transaction costs. Further, this effect is particularly pronounced among firms with higher asset specialization, operating in more competitive industries, and situated in regions with well-developed informatization system. Keywords: Market entry deregulation; Corporate vertical specialization; External transaction costs (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:129:y:2023:i:c:s0264999323003462 DOI: 10.1016/j.econmod.2023.106534 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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