Local Protection, Corporate Investment and Corporate Competitive Advantage: Evidence from Chinese Manufacturing Listed Companies
ZHANG Gong-fu,WANG Yong-qiang,LIU Zhen
1.School of Accounting Zhengzhou Institute of Aeronautical Industry Management, Zhengzhou 450015, China; 2.Henan Culture Film Co., Zhengzhou 45000, China
Abstract：
On the basis of listed company’s empirical data in China, this paper investigates the effect of local protection on corporate investment and its competitive advantage. The empirical evidence indicates that the locative companies where the province has a higher level of local protection over-invest more, especially the state-owned enterprise. We also find that in provinces with higher levels of local protection, the companies are more reluctant to investment outward, especially the private-owned enterprise. Finally, we find that the relationship between the degree of local protection and companies’ competitive advantage is negative,which indicates that local protection is harmful to the companies’ competitive advantage.
2013 
