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The growth of firms, markets and rents: Evidence from China

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  • Berkowitz, Daniel
  • Nishioka, Shuichiro

Abstract

The evidence for whether China become more competitive following its accession to the World Trade Organization (WTO) is mixed. Using recent methods for estimating markups and profit shares, this paper documents that Chinese manufacturing firms on average collected more rents after the accession because the rate of net entry of firms lagged the rapid growth of the domestic market. While the selection on large productive firms drove the rise in the aggregate markups in the United States (De Loecker et al., 2020), these competitive forces played a secondary role in China.

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  • Berkowitz, Daniel & Nishioka, Shuichiro, 2024. "The growth of firms, markets and rents: Evidence from China," Journal of Comparative Economics, Elsevier, vol. 52(2), pages 383-399.
    • Handle: RePEc:eee:jcecon:v:52:y:2024:i:2:p:383-399
    DOI: 10.1016/j.jce.2023.12.006
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    More about this item

    Keywords

    Markups; Profit shares; Net entry; Market expansion; Trade liberalization in China;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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