State Versus Market: China's Infrastructure Investment

34 Pages Posted: 18 Feb 2024

See all articles by Shuoge Qian

Shuoge Qian

Nanyang Business School, Nanyang Technological University

Hong Ru

Nanyang Business School, Nanyang Technological University

Wei Xiong

Princeton University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: February 4, 2024

Abstract

Amid growing global interest in state interventions, this paper examines the impact of Chinese government infrastructure investments on improving firm productivity. It centers on a policy aimed at directing regional governments to foster a more conducive market environment for private enterprises. Our analysis reveals that the positive effect of infrastructure investment on firm productivity is increased by 42.5% for private firms in industries that benefitted from improved market entry opportunities and an even more striking 97.9% in provinces where arbitrary fines were curtailed. These findings underscore the complementary roles of state interventions and the development of market mechanisms in boosting firm productivity.

Keywords: State Intervention, Infrastructure, Marketization, Complementarity

JEL Classification: G21, G28, H54, E60

Suggested Citation

Qian, Shuoge and Ru, Hong and Xiong, Wei, State Versus Market: China's Infrastructure Investment (February 4, 2024). Available at SSRN: https://ssrn.com/abstract=4716167 or http://dx.doi.org/10.2139/ssrn.4716167

Shuoge Qian

Nanyang Business School, Nanyang Technological University ( email )

Singapore, 639798
Singapore

Hong Ru

Nanyang Business School, Nanyang Technological University ( email )

Singapore, 639798
Singapore
(+65) 67904661 (Phone)

HOME PAGE: http://https://hongru.mit.edu/

Wei Xiong (Contact Author)

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
53
Abstract Views
199
Rank
708,747
PlumX Metrics