Administrative monopoly and state-owned enterprise innovation: Evidence from the fair competition review system in China

Yang, Xingquan, Zhang, Kexin, Liao, Guanmin and Gao, Pengfei ORCID: https://orcid.org/0009-0008-7818-1231 2024. Administrative monopoly and state-owned enterprise innovation: Evidence from the fair competition review system in China. International Review of Financial Analysis 95 , 103463. 10.1016/j.irfa.2024.103463 Item availability restricted.

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Abstract

This study examines the impact of administrative monopoly on corporate innovation, specifically focusing on the Fair Competition Review System (FCRS) implemented in China. Based on Chinese A-share listed firms from 2012 to 2020, we use the implementation of the FCRS as a natural experiment to conduct a difference-in-difference test. Our findings show that the FCRS significantly increases the level of innovation among SOEs through the mechanisms of resource acquisition and market competition. The incentive effect is not only at the strategic innovation level but also promotes the improvement of the substantive innovation level of SOEs. The heterogeneity test indicates that improvements stemming from the FCRS are more pronounced in specific functional categories, regions with poor business environments, and state-owned enterprises in industries that receive key policy support. Finally, our study also reveals that the FCRS promotes the input-output efficiency of innovation among SOEs. This research contributes to the literature by filling the research gap on the impact of administrative monopoly on corporate innovation, providing novelty evidence on the economic consequences of regulatory administrative monopoly, and offering policy insights regarding the FCRS.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Publisher:	Elsevier
ISSN:	1057-5219
Funders:	National Natural Science Foundation of China
Date of First Compliant Deposit:	26 July 2024
Date of Acceptance:	14 July 2024
Last Modified:	09 Nov 2024 01:45
URI:	https://orca.cardiff.ac.uk/id/eprint/170948

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