Firms Quasi‐dynamics in Chinese Manufacturing Industry. Issue 5 (16th September 2022)

• Record Type: Journal Article
• Authors: Li, Lixing; Liu, Qihong; Ren, Changyu
• Is Part Of: China & world economy. Volume 30:Issue 5(2022)
• Page Start: 102
• Page End: 127
• Publication Date: 2022-09-16
• Subjects: entry and exit -- firm dynamics -- industrial shift -- labor cost -- market thickness; Economic indicators -- China -- Periodicals; China -- Economic conditions -- 1976- -- Periodicals; China -- Economic policy -- 1976- -- Periodicals; China -- Commerce -- Periodicals; Economics -- China -- Periodicals; 337.951
• DOI: 10.1111/cwe.12439
• Languages: English
• ISSNs: 1671-2234

Abstract

Abstract: We explore firm quasi‐dynamics (entry, exit, and growth) in Chinese manufacturing industry and investigate how these dynamics vary across regions. Our results show that relative to provinces with less developed economies, in provinces with more developed economies (i) there is a higher proportion of new firms; (ii) new firms are smaller and more labor‐intensive; (iii) firms exit at a quicker rate, and surviving firms grow faster. These results point toward cross‐region differences in market efficiency in terms of how much it costs a firm to enter or exit the market. Our findings shed light on how firms should adapt their strategies across regions and how the government should create sound policies on industrial upgrading and relocation.