From One to Many Central Plans: Drug Advertising Inspections and Intra-National Protectionism in China

40 Pages Posted: 3 Apr 2014

See all articles by Markus Eberhardt

Markus Eberhardt

University of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP)

Zheng Wang

De Montfort University; GEP, University of Nottingham

Zhihong Yu

University of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP)

Date Written: March 10, 2014

Abstract

This paper provides the first micro-level evidence for the existence and patterns of intra-national protectionism in China. We demonstrate that drug advertising inspections are used by provincial governments to discriminate against firms from outside the province and document how the degree of discrimination varies across firms: manufacturers with closer ties to rival provinces, from provinces with lower presence in the market, and smaller firms are more likely to be targeted. Our findings confirm that giving local governments strong incentives to compete with each other exacerbates the market distortions inherent in a partially reformed economy.

Keywords: intra-national protectionism, drug advertising, China

JEL Classification: F150, P260, L250

Suggested Citation

Eberhardt, Markus and Wang, Zheng and Yu, Zhihong, From One to Many Central Plans: Drug Advertising Inspections and Intra-National Protectionism in China (March 10, 2014). CESifo Working Paper Series No. 4682, Available at SSRN: https://ssrn.com/abstract=2419884

Markus Eberhardt

University of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP) ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

Zheng Wang (Contact Author)

De Montfort University ( email )

Faculty of Business and Law
The Gateway
Leicester, LE1 9BH
United Kingdom

HOME PAGE: http://zhengwang.weebly.com/

GEP, University of Nottingham ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

Zhihong Yu

University of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP) ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

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