Antitrust Platform Regulation and Entrepreneurship: Evidence from China

29 Pages Posted: 17 Jan 2024 Last revised: 2 Apr 2024

See all articles by Ke Rong

Ke Rong

Institute of Economics, School of Social Sciences, Tsinghua University

D. Daniel Sokol

USC Gould School of Law; USC Marshall School of Business

Di Zhou

Tongji University

Feng Zhu

Harvard University - Harvard Business School

Date Written: January 1, 2024

Abstract

Many jurisdictions have launched antitrust enforcement and brought in regulation of large tech platforms. The swift and strict implementation of China’s Anti-Monopoly Guidelines for the Platform Economy (Platform Guidelines) provides a quasi-natural experiment to evaluate the impact of antitrust regulation on platform competition. We adopt a difference-in-differences approach to empirically explore the impact of China’s Platform Guidelines on the number of investments and the entry of startups in platform markets. The results show that the Platform Guidelines did not increase competition in these affected markets. Rather, competition weakened in these markets, with less venture capital investment flowing into them and fewer startups entering these markets. Our study suggests that governments should consider more carefully the potential unintended consequences of antitrust platform regulation.

Suggested Citation

Rong, Ke and Sokol, D. Daniel and Zhou, Di and Zhu, Feng, Antitrust Platform Regulation and Entrepreneurship: Evidence from China (January 1, 2024). Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 24-039, USC CLASS Research Paper No. 24-16, Available at SSRN: https://ssrn.com/abstract=4697283 or http://dx.doi.org/10.2139/ssrn.4697283

Ke Rong

Institute of Economics, School of Social Sciences, Tsinghua University ( email )

MingZhai Building
Beijing, 100084
China

D. Daniel Sokol

USC Gould School of Law ( email )

699 Exposition Boulevard
Los Angeles, CA 90089
United States

USC Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA California 90089
United States

Di Zhou

Tongji University ( email )

1239 Siping Road
Shanghai, 200092
China

Feng Zhu (Contact Author)

Harvard University - Harvard Business School ( email )

Soldiers Field Road
Morgan 431
Boston, MA 02163
United States

HOME PAGE: http://www.hbs.edu/faculty/Pages/profile.aspx?facId=14938

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