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Competition Policy and Trade Barriers: Empirical Evidence from China

Authors
  • Liu, Yongzheng1
  • Ye, Guangliang2
  • 1 Renmin University of China, School of Finance, China Financial Policy Research Center, 59 Zhongguancun Street, Beijing, 100872, China , Beijing (China)
  • 2 Renmin University of China, Antitrust and Competition Policy Center, Hanqing Institute, National Academy of Development and Strategy, 59 Zhongguancun Street, Beijing, 100872, China , Beijing (China)
Type
Published Article
Journal
Review of Industrial Organization
Publisher
Springer US
Publication Date
May 22, 2018
Volume
54
Issue
2
Pages
193–219
Identifiers
DOI: 10.1007/s11151-018-9634-z
Source
Springer Nature
Keywords
License
Yellow

Abstract

This paper examines the impact of competition policy on inter-regional trade barriers among provinces in China. Using data from 28 Chinese provinces for the period 1994–2013, we show that the implementation of competition policy—as measured by a number of indices that we construct—can effectively reduce inter-regional trade barriers. We provide results that are based on both fixed effects and instrumental variables estimators to support the causal nature of the established link. The effect is found to be more salient for provinces with a less corrupt political environment. The results are also shown to be robust across alternative specifications, alternative measures of competition policy, and inter-regional trade barriers.

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