Review article

https://doi.org/10.10.18045/zbefri.2015.2.299

Industry regulation, competition, and the dynamics of productivity growth: evidence from China’s iron and steel industry

Jianbai Huang ; Business School, Central South University, Changsha, 410083, China
Chuan Liu ; Business school, Central South University, Changsha, 410083, China
Daguo Lü ; Institute of Industrial Economics, Jiangxi University of Finance Economics, Nanchang, 330013, China
Xiaoping Li ; Business School, Central South University, Changsha, 410083, China

Abstract

This study aims to investigate the characteristics of the efficient evolution of
China’s iron and steel industry against the backdrop of limited openness and
regulation and to discuss the important effects of regulatory policy and total factor
productivity (TFP) of China’s iron and steel industry. The method adopted the
Cobb–Douglas production function combined with a semi-parametric method to
decompose productivity. This study based on the micro-level dataset of iron and
steel enterprises in the database of China’s industrial enterprises between 1998
and 2007 that investigated the intrinsic correlation among corporate entry and
exit, market competition of existing enterprises, and TFP growth in the iron and
steel industry. The results of the research show that the entry-exit would promote
the growth of the aggregate productivity, while the low efficiency of resource
allocation would significantly inhibit the TFP growth. The basic conclusion is that,
with substantial government intervention in enterprise investments, market competition may not promote optimal resource allocation efficiency in China’s iron
and steel industry, but make the allocation less efficient.

Keywords

Productivity dynamics; industry regulation; market competition; China

Hrčak ID:

149851

URI

https://hrcak.srce.hr/149851

Publication date:

21.12.2015.

Article data in other languages: croatian

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