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Barriers to Entry and Industrial Performance in China

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  • Guo Biao Yang

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.

Suggested Citation

  • Guo Biao Yang, 1998. "Barriers to Entry and Industrial Performance in China," International Review of Applied Economics, Taylor & Francis Journals, vol. 12(1), pages 39-51.
    • Handle: RePEc:taf:irapec:v:12:y:1998:i:1:p:39-51
    DOI: 10.1080/026921719800000024
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    References listed on IDEAS

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    1. Louri, H. & Anagnostaki, V., 1995. "Entry and exit from Greek manufacturing industry: a test of the symmetry hypothesis," MPRA Paper 40575, University Library of Munich, Germany.
    2. Baldwin,John R. & Gorecki,Paul With contributions by-Name:Caves,Richard E. With contributions by-Name:Dunne,Tim With contributions by-Name:Haltiwanger,John, 1998. "The Dynamics of Industrial Competition," Cambridge Books, Cambridge University Press, number 9780521633574, January.
      • Baldwin,John R. & Gorecki,Paul With contributions by-Name:Caves,Richard E. With contributions by-Name:Dunne,Tim With contributions by-Name:Haltiwanger,John, 1995. "The Dynamics of Industrial Competition," Cambridge Books, Cambridge University Press, number 9780521465618.
    3. Berndt, Ernst R & Khaled, Mohammed S, 1979. "Parametric Productivity Measurement and Choice among Flexible Functional Forms," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1220-1245, December.
    4. -, 1986. "Agenda = Agenda," Series Históricas 8749, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
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    Cited by:

    1. Bei Luo & Terence Tai-Leung Chong, 2017. "Entrepreneurial activities and institutional environment in China," Economic and Political Studies, Taylor & Francis Journals, vol. 5(2), pages 179-194, April.
    2. Li, Hongbin, 2003. "Government's budget constraint, competition, and privatization: evidence from China's rural industry," Journal of Comparative Economics, Elsevier, vol. 31(3), pages 486-502, September.
    3. Lu, Ding, 2001. "Industrial policy and resource allocation: implications on China's participation in globalization," China Economic Review, Elsevier, vol. 11(4), pages 342-360.
    4. Hu, Jun & Fang, Qi & Wu, Huiying, 2023. "Environmental tax and highly polluting firms' green transformation: Evidence from green mergers and acquisitions," Energy Economics, Elsevier, vol. 127(PB).
    5. Li, Hongbin & Rozelle, Scott, 2000. "Saving or stripping rural industry: an analysis of privatization and efficiency in China," Agricultural Economics, Blackwell, vol. 23(3), pages 241-252, September.

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