The political economy of industry dynamics in China: a microeconomic investigation

Jun Du, Sourafel Girma

Research output: Contribution to conferencePaper

Abstract

Using a unique firm level data, this paper analyses the role of political connections in the post-entry performance of private start-up companies in China. It documents robust evidence that political affiliation enhances firms’ survival and growth prospects. But interestingly politically neutral start-ups enjoy faster productivity improvements conditional on survival.. We conclude that the close association between the state and a segment of the business community is leading to sub-optimal resource allocation in the economy by interfering with the process of market selection.
Original languageEnglish
Publication statusPublished - 2009
Event36th annual conference of the European Association for Research in Industrial Economics - Ljubljana, Slovakia
Duration: 3 Sep 20095 Sep 2009

Conference

Conference36th annual conference of the European Association for Research in Industrial Economics
Abbreviated titleEARIE 2009
CountrySlovakia
CityLjubljana
Period3/09/095/09/09

Keywords

  • firm growth
  • survival
  • political economy
  • industry dynamics

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