Market Entry and Economic Growth: Evidence from Chinese Manufacturing Industry
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| Title | Market Entry and Economic Growth: Evidence from Chinese Manufacturing Industry
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| Author | Li Kunwang and Jiang Wei |
| Organization | NanKai University |
| Email | likunwang@nankai.edu.cn；weijiang923@mail.nankai.edu.cn |
| Key Words | Market Entry; Economic Growth; Chinese Manufacturing Industry |
| Abstract | We studies the overall effects of market entry on economic growth and provide a microscopic interpretation of the economic growth process and mechanism in China from the perspective of dynamic resource reallocation. Using the manufacturing firms’ data in China from 1998 to 2007, the paper conducts an empirical analysis on the growth effect of market entry. The results finds that market entry is active in the Chinese manufacturing industry and the industries with higher entry rate grow faster. Although new entrants only contribute 7.5% to total value added for the manufacturing, the average contribution to economic growth is as high as 46.3%. New entrants rate grow faster than that of other enterprises in the post entry periods, but the slowing down growth rate convergences to the incumbent firms’ pace of growth. The last but not the least, the paper uses econometric model to identify the micro mechanism that entrants promote the Chinese economic growth. The results finds that market selection and learning effects are all important mechanism to promote economic growth in China. |
| Serial Number | WP834 |
| Time | 2015-03-10 |
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