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Barriers to Entry and Industrial Performance in China


  • Guo Biao Yang


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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    Cited by:

    1. 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.
    2. Luo, Bei & Chong, Terence Tai Leung, 2016. "Entrepreneurial Activities and Institutional Environment in China," MPRA Paper 63395, University Library of Munich, Germany.
    3. 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.
    4. 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.

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