In June 2016, the publication of the 'Opinions of the State Council on Establishing a Fair Competition Review System during the Development of Market-oriented Review System', (hereinafter referred to as 'Fair Competition Review System'), marks a new stage of the anti-monopoly cause in China. The determination and strength of this economic restructuring is unprecedented. At the critical stage of transformation and upgrading, administrative monopoly may lead to short-term business dilemma of enterprises with high efficiency that are just found but have no growth, and the survival of enterprises with low efficiency in a market environment with distorted entry and exit mechanisms. The quantitative evaluation of the relationship between administrative monopoly and enterprise strategy choice is of great importance to the promotion of the theory and practice exploration of 'Fair Competition Review System' and the improvement of institutional environment concerning enterprise survival. But the analysis of policy effect of administrative monopoly rarely goes deep into micro-firm level, especially in the view of enterprise survival. This paper uses PSM-Cox proportional hazard model to examine the effect of administrative monopoly on enterprise survival risk and its mechanism at micro-firm level. Our results indicate that in general, administrative monopoly has positive policy impact on the survival risk of manufacturing enterprises, i.e. government intervention represented by administrative monopoly aggravates the survival risk of enterprises. Furthermore, the effects of administrative monopoly on the survival risk of heterogeneous enterprises differ somewhat:firstly, administrative monopoly does not have significant effect on the survival risk of state-owned enterprises, but has significant effect on non-state-owned enterprises; secondly, administrative monopoly has significant positive effect on the survival risk of enterprises in mid-west China, but does not have significant effect in East China; administrative monopoly is positively correlated with the survival risk of labor-intensive enterprises, but does not have significant effect on capital-intensive and technology-intensive industries. Administrative monopoly raises the survival risk of enterprises by reducing survival rate and innovation, and really results in rent-seeking activities which weaken the effect of administrative monopoly on the survival risk of enterprises to some extent. And the joint effect of these three above provides an important explanation for the foregoing study. As for supply-side structural reform, the elimination of administrative monopoly through the competition policy, can improve the resource allocation efficiency in Chinese market, thereby creating a favorable supply-side institutional environment for enterprise survival and economic development. As for the development of small and medium-sized enterprises, the construction of a sound competition policy system, can strengthen the viability of non-state-owned enterprises, enterprises in mid-west China and labor-intensive enterprises, and offers systematic and mechanism support for the 'mass entrepreneurship'. The competition policy system focusing on 'Fair Competition Review System' is gradually being completed, and the development of socialist market economic system is bound to enter a new stage.
Dose Administrative Monopoly Aggravate the Survival Risk of Chinese Enterprises?
Journal of Finance and Economics Vol. 43, Issue 11, pp. 17 - 29 (2017) DOI:10.16538/j.cnki.jfe.2017.11.002
 Bao Z K. Innovative behavior and survival risk of Chinese enterprises: An empirical research[J]. Finance & Trade Economics, 2016, (2): 85–99. (In Chinese)
 Chen F X, Yu Z Y, JU L. Lock-in effect and Chinese industry structure evolvement: 1992-1996[J]. Economist, 2010, (6): 52-61. (In Chinese)
 Chen L. The dual characteristics and the actual dilemma of anti-administrative monopoly[J].Academics, 2015, (2): 14–23. (In Chinese)
 Chen L, Luo L Y, Kang N. Administrative monopoly and China’s factor-price distortions——An empirical test based on the whole industry data and the endogenous perspective[J]. China Industrial Economics, 2016, (1): 52–66. (In Chinese)
 Jin L Q, Lin J Z, Ding S S. Effect of administrative monopoly on resources misallocation caused by ownership differences[J]. China Industrial Economics, 2015, (4): 31–43. (In Chinese)
 Lu Y D, Yu J, Liu H Y. Study on the cardio tonic effect of export behavior on firm survival——Empirical analysis from China enterprise panel data in the year of 1999-2008[J]. Economic Theory and Business Management, 2013, (8): 60–71. (In Chinese)
 Qi W D, Liu J. The unexpectedly mission and strategic design of reform of state-owned-enterprises in China[J]. Academic Journal of Zhongzhou, 2015, (2): 24–29. (In Chinese)
 Wang J H, Wang J M. Administrative monopoly in China’s natural monopoly industries and its regulatory policy[J]. China Industrial Economics, 2007, (12): 30-37. (In Chinese)
 Garyh J, Thomasg R, ZHANG Y F. Productivity growth and convergence across China’s industrial economy[J]. China Economic Quarterly, 2008, (3): 809-826. (In Chinese)
 Yan N H, Wang H M. The source of profit for state-owned enterprises: administrative monopoly or technological innovation[J]. Reform, 2009, (11): 128–133. (In Chinese)
 Yang J S, Yang J H. Administrative monopoly, political patronage and the extra-cost of the state-owned firms[J].Economic Research Journal, 2015, (4): 50–61. (In Chinese)
 Yi C J, Li S, Zhang J P. Institutional environment, absorptive capacity and reverse technological spillovers of OFDI in emerging economies: A threshold test based on inter provincial panel data in China[J]. Journal of Finance and Economics, 2015, (11): 4–19. (In Chinese)
 Yin Z F, Ye J Y, Huang Y H, Qin X Z. Intellectual property right protection and enterprise innovation: transmission mechanism and test[J]. The Journal of World Economy, 2015, (4): 25-49. (In Chinese)
 Yu J, Lu Y D, Liu H Y. Export behavior and survival probability of Chinese enterprises: An empirical research[J]. The Journal of World Economy, 2015, (4): 25–49. (In Chinese)
 Yu L C, Yu D H. The Measurement of local administrative monopoly degree in China[J]. Economic Research Journal, 2009, (2): 119–131. (In Chinese)
 Yu L C, Zhang W. Intensity and efficiency loss of industry administrative monopoly in China[J]. Economic Research Journal, 2010, (3): 16–27. (In Chinese)
 Zhang W, Yu L C. Study on the formation and governance mechanism of administrative monopoly[J]. China Industrial Economics, 2011, (1): 69–78. (In Chinese)
 Zhang Y, Sun P Y. Bilateral Business Environment, Contract Dependence and Duration of Trade: Evidence from Firm-level Data in China[J]. Journal of Finance and Economics, 2016, (4): 49–60. (In Chinese)
 Zhou Q R. Competition, monopoly and regulation——The background report of antitrust policy[M]∥Wang X Y. Property and system transition. BEI Jing: Peking University Press, 2004. (In Chinese)
 Acemoglu D, Robinson J A. Economic backwardness in political perspective[J]. American Political Science Review, 2006, 100(1): 115–131. DOI:10.1017/S0003055406062046
 Baron R M, Kenny D A. The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations[J]. Journal of Personality and Social Psychology, 1986, 51(6): 1173–1182. DOI:10.1037/0022-35220.127.116.113
 Becker S, Ichino A. Estimation of average treatment effects based on propensity scores[J]. The Stata Journal, 2002, 2(4): 358–377.
 Coase R H. The task of the society[R].International Society for New Institutional Economics Newsletter, 1999.
 Cockburn I M, Wagner S. Patents and the survival of internet related IPOs[R]. NBER Working Paper No, w13146, 2007.
 Davis L, North D C. Institutional change and American economic growth[M]. Cambridge: Cambridge University Press, 1971.
 Namini J E, Facchini G, Lopez R A. Export growth and firm survival[J]. Economics Letters, 2013, 120(3): 481–486. DOI:10.1016/j.econlet.2013.05.025
 Rodrik D, Subramanian A, Trebbi F. Institutions rule:The primacy of institutions over geography and integration in economic development[J]. Journal of Economic Growth, 2004, 9(2): 131–165. DOI:10.1023/B:JOEG.0000031425.72248.85
 Rosenbaum P R, Rubin D B. Constructing a control group using multivariate matched sampling methods that incorporate the propensity score[J]. American Statistician, 1985, 39(1): 33–38.
Cite this article
Kang Ni, Chen Lin. Dose Administrative Monopoly Aggravate the Survival Risk of Chinese Enterprises?[J]. Journal of Finance and Economics, 2017, 43(11): 17–29.
Previous: Does State-owned Venture Capital Play a "Crowding-in" Role? An Empirical Research Based on Certification Mechanism