Barriers to Entry and Industrial Performance in China

Guo Biao Yang

International Review of Applied Economics, 1998, vol. 12, issue 1, 39-51

Abstract: This paper estimates an index of barriers to entry for each of the 40 Chinese industries by modelling entry as a function of various incentives to enter, relative to the level of barriers to entry. The estimated index was employed to analyse the relationship between barriers to entry and profitability and total factor productivity. The major finding is that an appropriate degree of barriers to entry,1but not free entry or high barriers to entry, is beneficial to Chinese industrial performance. This is in contrast to the conventional argument in mainstream industrial economics and the findings of most empirical research.

Date: 1998
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DOI: 10.1080/026921719800000024

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