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

Jun Du; Sourafel Girma

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

Jun Du
, Sourafel Girma

University of Nottingham

Research output: Unpublished contribution to conference › Unpublished Conference Paper › peer-review

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 language	English
Publication status	Published - 2009
Event	36th annual conference of the European Association for Research in Industrial Economics - Ljubljana, Slovakia Duration: 3 Sept 2009 → 5 Sept 2009

Conference

Conference	36th annual conference of the European Association for Research in Industrial Economics
Abbreviated title	EARIE 2009
Country/Territory	Slovakia
City	Ljubljana
Period	3/09/09 → 5/09/09

Keywords

firm growth
survival
political economy
industry dynamics

Cite this

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title = "The political economy of industry dynamics in China: a microeconomic investigation",

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{\textquoteright} 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.",

keywords = "firm growth, survival, political economy, industry dynamics",

author = "Jun Du and Sourafel Girma",

year = "2009",

language = "English",

note = "36th annual conference of the European Association for Research in Industrial Economics, EARIE 2009 ; Conference date: 03-09-2009 Through 05-09-2009",

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TY - CONF

T1 - The political economy of industry dynamics in China

T2 - 36th annual conference of the European Association for Research in Industrial Economics

AU - Du, Jun

AU - Girma, Sourafel

PY - 2009

Y1 - 2009

N2 - 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.

AB - 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.

KW - firm growth

KW - survival

KW - political economy

KW - industry dynamics

M3 - Unpublished Conference Paper

Y2 - 3 September 2009 through 5 September 2009

ER -

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

Abstract

Conference

Keywords

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Cite this