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Intra-National Protectionism in China: Evidence from the Public Disclosure of ‘Illegal’ Drug Advertising

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  • Markus Eberhardt
  • Zheng Wang
  • Zhihong Yu

Abstract

This paper provides micro-level evidence that drug advertising regulations and inspections in China are used by local governments to discriminate against firms from outside the province. Furthermore, the degree of discrimination varies across firms in that drug manufacturers which have closer ties with rival provinces are more likely to be targeted. These findings demonstrate that giving provincial governments strong incentives to compete with each other may exacerbate the market distortions inherent in a partially reformed economy such as China.

Suggested Citation

  • Markus Eberhardt & Zheng Wang & Zhihong Yu, 2013. "Intra-National Protectionism in China: Evidence from the Public Disclosure of ‘Illegal’ Drug Advertising," CSAE Working Paper Series 2013-07, Centre for the Study of African Economies, University of Oxford.
    • Handle: RePEc:csa:wpaper:2013-07
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    Cited by:

    1. Herrmann-Pillath, Carsten & Libman, Alexander & Yu, Xiaofan, 2014. "Economic integration in China: Politics and culture," Journal of Comparative Economics, Elsevier, vol. 42(2), pages 470-492.
    2. Yulia Muratova & Jakob Arnoldi & Xin Chen & Joachim Scholderer, 2018. "Political rotations and cross-province firm acquisitions in China," Asian Business & Management, Palgrave Macmillan, vol. 17(1), pages 37-58, February.

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    More about this item

    Keywords

    China; intra-national protectionism; drug advertising;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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