Does administrative monopoly affect enterprise innovation? An empirical analysis based on the perspective of factor mismatch in China

Abstract

In the process of reforming from planned economy to market economy, the phenomenon of administrative monopoly has had a far-reaching impact on the development of China’s economy. Based on the perspective of factor mismatch, this paper examines the impact of administrative monopoly on enterprise innovation and its realization path, utilizing panel data from 30 Chinese provincial regions spanning 8 years from 2008 to 2015. The results of the study show that administrative monopoly significantly hinders the innovation activities of enterprises, showing a negative impact on both the output and input sides of innovation. By triggering factor mismatch, administrative monopoly has a hindering effect on enterprise innovation activities. Specifically, the intervention of administrative monopoly in the market leads to the mismatch of capital and labor factors in the market. When the interaction terms of administrative monopoly with capital mismatch and labor mismatch are added to the empirical model of administrative monopoly, it is found that the hindering effect of these interaction terms on enterprises is greatly enhanced. In the case of a single factor of capital mismatch and labor mismatch or the co-existence of both factors, their hindering effect on firms’ innovation is significantly enhanced. In addition, it is also found that capital mismatch has a more serious hindering effect on firm innovation than labor mismatch.

Keywords

administrative monopoly factor mismatch enterprise innovation capital mismatch labor mismatch

Introduction

At this stage, China’s economy and society are in a “new normal” and are promoting high-quality development. In this context, innovation has been recognized as a key force for economic development. With increasing emphasis on knowledge, technology, and innovation, building an innovative country has become a common strategy for promoting socio-economic development in major countries around the world. 2012s 18th National Congress explicitly proposed the “innovation-driven development strategy,” elevating it to the national strategic level, and 2019s Fifth Plenum of the 19th Central Committee of the Communist Party of China (CPC) further emphasized the central role of innovation in China’s modernization and construction. In 2019, the Fifth Plenary Session of the 19th Central Committee further emphasized the central position of innovation in China’s modernization and stressed the need to “strengthen the position of enterprises as the mainstay of innovation, and promote all kinds of innovation factors to enterprises.” This shows that the Chinese government attaches great importance to innovation development and enterprise innovation.

The innovation-driven development strategy has penetrated into all fields of economy and society, and it is a major strategic decision based on the domestic and international political and economic environment. At present, how to promote the concentration of innovation factors to enterprises has become an urgent problem, and accelerating the construction of an innovative country is regarded as the key to solving the current and future development challenges. Compared with the early stage of reform and opening up, the demand for technology accumulation at that time had been satisfied by the introduction of advanced technologies, which realized rapid economic growth. However, in the face of current international trade barriers and technological blockades, the path of imitation and innovation is no longer feasible. Therefore, upgrading the capability of independent innovation has become a new driving force to promote the sustained and healthy development of China’s economy.

During China’s economic and social transition, the phenomenon of administrative monopoly has had a profound and wide-ranging impact on the flow of economic factors. Administrative monopoly interferes with resource allocation through non-market means, which in turn affects the production and operation activities of enterprises and their enthusiasm for innovation. Its existence of double standards, whereby enterprises in different industries, ownership systems, and regions are treated differently in the market, further exacerbates market unfairness. The administrative monopoly sector, utilizing the administrative power and economic resources at its disposal, interferes with the normal operation of the market mechanism, making it difficult for innovative factors of production to be effectively allocated in accordance with the market mechanism. This makes it difficult for innovation factors to cluster towards innovative enterprises, ultimately resulting in the mismatch of innovation production factors.

The main innovations of this paper are twofold. Firstly, building upon previous research, we delve deeper into the fundamental traits of administrative monopoly in the Chinese context. This analysis uncovers the profound consequences hidden beneath the superficial manifestations, thereby enhancing our comprehension of administrative monopoly’s reach and impact within China. Secondly, this study elucidates how administrative monopoly influences enterprise innovation in China, specifically through the lens of factor mismatch. We demonstrate that administrative monopoly, by inducing market factor mismatches, subsequently impedes corporate innovation in China. This revelation offers a fresh viewpoint on the intricate relationship between administrative monopoly and enterprise innovation within the unique economic and political landscape of China.

Literature review

Factor mismatch hinders enterprises’ motivation to innovate

The intricate relationship between labor and capital factors within firms and their influence on innovation is evident in the reviewed literature. Numerous studies have brought attention to the detrimental effects of labor and capital factor mismatches on firms’ innovation. A range of factors contribute to the hindrance of innovation in firms, including uncertain outcomes, high innovation costs, lack of qualified labor, and inadequate financial resources. Strong labor rights, particularly in highly unionized industries, can also negatively impact the performance and survival of innovative firms. Capital misallocation has been found to distort competition, leading to lower exit rates of low-type firms and reduced entry rates of young and innovative firms, ultimately depressing patent applications. Additionally, a shortage of skilled labor can impede innovation activities, particularly in the case of professional occupations. Francis et al. further emphasized the negative impact of enhanced labor protection on corporate innovation, especially in firms heavily reliant on external financing and with high R&D intensity.¹ Collectively, these studies stress the importance of addressing labor and capital factor mismatches to foster innovation in firms. Derrien et al. provide additional support by demonstrating that firms in younger labor markets, where labor mismatch is likely less prevalent, tend to exhibit higher levels of innovation.² Bena et al. contribute to the understanding of labor mismatch impact on firm innovation by revealing that increased labor dismissal costs can lead to higher process innovation, especially in industries with high labor costs.³ In line with this, Derrien et al. observe that younger labor markets tend to foster more innovation, suggesting a potential mismatch between labor force demographics and innovation needs.² However, some scholars raise a cautionary note about the potential downsides of innovation, highlighting its role in increasing labor income risk, particularly for high-earning workers. This risk may be further amplified by employee-friendly labor reforms, as revealed by Francis, who found such reforms to negatively impact corporate innovation.¹ These findings underscore the intricate and nuanced relationship between labor mismatch and firm innovation, revealing potential trade-offs between labor protection measures and the promotion of innovation.

In summary, the literature review collectively underscores the complexity of the interplay between labor and capital mismatches and their impact on firm innovation. Understanding these dynamics is essential for policymakers and organizational leaders aiming to strike a balance between labor protection measures and fostering a culture of innovation. Further research is warranted to delve deeper into these complexities and explore potential strategies for mitigating the challenges posed by labor and capital mismatches on innovation in our economic context.

The relationship between factor misallocation (labor and capital) and firm innovation

In the realm of economic research, the efficient allocation of resources, particularly labor and capital, plays a pivotal role in driving the growth and development of firms. However, misallocation of these resources is a prevalent phenomenon that can have significant implications for firm-level innovation. Capital misallocation is prevalent in developing countries, primarily stemming from limited financial access, bureaucratic hurdles, and gender disparities, all of which compound the problem. This literature review aims to synthesize and analyze the existing research on the relationship between labor and capital misallocation and firm innovation, drawing from both domestic and international sources.

Labor misallocation, broadly defined as the inefficient allocation of labor resources across firms or sectors, has been identified as a potential impediment to innovation. Several studies have explored the mechanisms through which labor misallocation impacts firm-level innovation. One such mechanism involves the distortion of incentive structures within firms. When labor is misallocated, it may lead to a mismatch between workers’ skills and the tasks they are assigned, which can dampen workers' motivation to innovate and compromise the firm’s overall innovative capacity. The consequences of misallocated resources are wide-ranging and dynamic. Reducing entry barriers can stimulate growth, alleviate the negative impacts of misallocation, and consequently contribute to a more efficient and productive economy.⁴ Furthermore, labor misallocation can also hinder firms’ ability to attract and retain talent. Firms operating in sectors with high levels of labor misallocation may struggle to compete for skilled workers due to distortions in the wage structure that may not accurately reflect the true value of skilled workers' skills. This, in turn, can limit the pool of talent available for innovative activities and decrease the likelihood of breakthrough innovations emerging from within these firms.

Capital misallocation, similarly, pertains to the inefficient allocation of capital resources across firms or sectors. Policy distortions and financial frictions are two key factors contributing to capital misallocation.⁵ The impact of capital misallocation on firm innovation has also garnered significant interest in academic circles. One of the primary channels through which capital misallocation affects innovation is by distorting investment decisions. This distortion can lead firms to either overinvest or underinvest in innovative endeavors, contingent upon whether the cost of capital is artificially depressed or inflated. Financial frictions play a pivotal role in explaining the capital misallocation observed in China, accounting for approximately 30% of the total misallocation. This underscores the importance of addressing these frictions to improve capital allocation efficiency and promote more sustainable economic growth in the country.^6,7 Moreover, capital misallocation can also hinder firms’ access to external financing for innovative projects. Firms in sectors with high levels of capital misallocation may encounter difficulties in obtaining financing from external sources, as investors may be reluctant to provide funds to firms operating in sectors perceived as high risk.⁸ This can constrain the firm’s ability to finance innovative projects and may force them to rely solely on internal funds, which may be insufficient to support high-risk, high-reward innovative activities.

The studies reviewed in this literature utilized various research methods, including empirical analysis of firm-level data, theoretical modeling, and case studies. In particular, empirical studies have been instrumental in providing quantitative evidence on the relationship between factor misallocation and firm innovation. By leveraging large datasets and advanced econometric techniques, these studies have been able to estimate the magnitude of the impact of labor and capital misallocation on innovation and pinpoint the key determinants of this relationship, such as firm size, sector, and country-specific characteristics.

In summary, both mismatch and improper allocation of labor and capital can significantly affect the innovative capacity and development of an enterprise. These problems involve multiple dimensions, including the match between employee skills and tasks, the rationality of investment decisions, and the difficulty of external financing, which together constitute a complex web of factors affecting the innovative activities of enterprises. In order to stimulate innovation in enterprises and promote sustained economic growth, these labor and capital allocation issues must be understood and addressed in depth. This requires policymakers, business leaders, and researchers to work together to optimize the allocation of resources by improving the operating mechanisms of the labor and capital markets, thereby creating a more conducive environment for enterprise innovation.

Theoretical analysis

There exist various classifications of innovation, which can be divided into basic innovation and applied innovation based on their level. Basic innovation serves as the starting point for all subsequent advancements, while applied innovation builds upon this foundation, often manifesting in the real world as basic and applied research. Basic research embodies the original capacity for knowledge innovation, whereas applied research explores ways to utilize the findings of basic research.⁹ Applied innovation primarily involves the invention and creation of new products, processes, and materials. The knowledge, technology, and methodologies underpinning applied innovation are all rooted in basic innovation.

The United States’ renowned innovation capabilities are closely tied to its investment in basic research, and this robust capacity for original innovation has propped up the entire U.S. innovation system. Enterprises, which provide end products and services to the market, predominantly focus on applied innovation in their endeavors. However, for enterprise innovation to flourish, it must rely on a strong foundation of basic innovation within the country. This crucial task is primarily carried out in colleges, universities, research institutes, and other scientific institutions, which are often state-supported.

The authoritative nature of administrative monopolies and their possession of substantial capital, technology, and other resources endow them with significant influence over society. Government actions have far-reaching consequences, and a single policy can impact multiple domains. Thus, administrative monopolies cast a long shadow over China’s economy and society. As key players in economic activity, enterprises are greatly affected by administrative monopolies. These non-market forces can undermine the market’s decisive role in resource allocation, preventing resources from reaching an optimal or even sub-optimal state.¹⁰ This results in a more pronounced mismatch of factors, further compounding the challenges faced by enterprise innovation activities, which are already constrained by a lack of human capital and capital resources.

Administrative monopoly refers to the abuse of administrative power by government agencies or their authorized organizations to restrict competition. This type of monopoly constitutes a special form of market control that arises from the combination of administrative power and market forces. To gain clarity on the relationship between administrative monopoly and enterprise innovation, two key questions must be addressed: Firstly, what role does administrative monopoly play in the generation of enterprise innovation? Secondly, how does administrative monopoly exert its influence?

The fundamental role of administrative monopoly subjects on enterprise innovation

The government provides a good basic environment for enterprise innovation. Enterprises are mainly engaged in applied innovation activities, mainly for new products, new materials and new processes, and other innovations, and the final destination of the products is to realize the “thrilling jump,” completing the transformation from use value to value. From the beginning to the finalization of the innovation, every link has the shadow of the government. Basic innovation has the attribute of public goods, and public goods are non-competitive and non-exclusive, which makes the supply of basic innovation under the market mechanism seriously insufficient.^11,12 The uncertainty and high risk of basic innovation itself, coupled with the fact that basic innovation itself requires a large amount of capital, long investment time, and other characteristics, these characteristics make enterprises reluctant to carry out basic innovation, so basic innovation needs to be promoted by the government.^13,14 From the historical practice, basic innovation is mainly accomplished by state-led colleges and universities and scientific research institutes. In order to realize better economic and social development, the government will give policy support and financial subsidies to basic innovation, and the basic way is to support colleges and universities and scientific research institutes to carry out scientific research activities. Government support can promote innovation output of firms that have innovated in normal years, but in bad economic environments and intense competition, firms’ innovation probability rises as government support increases. Universities and research institutes have a good and strong scientific research foundation, together with the government’s policy and financial support, which makes their basic research advantages more obvious, and their strong basic innovation ability provides a good innovation infrastructure environment for the society. In such a good science and innovation environment, enterprises can get the required technical support and scientific research talents, and enterprises must rely on this basic environment to realize better innovation.¹⁵

At the same time, the factor inputs needed by enterprises for innovation are greatly influenced by the government. China’s market economy is constantly improving, and in this process, the government plays an important role in the allocation of market resources. The capital required for enterprise innovation needs exogenous financing in addition to its own internal funds, and the innovation activities of private enterprises often face difficulties in financing and insufficient innovation resources. State-owned enterprises (SOEs) or enterprises with ties to the government can easily obtain low-interest loans from banks, while other enterprises have difficulties in obtaining loans from formal financial institutions, and the government’s regulation of the financial market constrains the scale and cost of exogenous financing for enterprises. The government’s control of talent policy affects whether enterprises can get the right innovative talents, and it is difficult to get into the right position if talents cannot move freely. Some industries have strong administrative monopoly power, high entry and exit thresholds, and it is difficult for general enterprises to enter, and even more difficult to compete with them, resulting in high profit margins of enterprises in these industries, and enterprises tend to lack the incentive to innovate in an environment of lack of competition and high profits, so although enterprises in these industries have good innate conditions, the incentive to innovate is obviously insufficient. Finally, in the sales of innovative new products, local protectionism impedes the flow of goods between regions, affecting the realization of the value of innovative products, and puts enterprises in an embarrassing situation where there are products but no market.

Administrative monopoly of the main body of the innovation infrastructure environment, innovation resources, talent flow and product markets, affecting the smooth development of enterprise innovation activities, in the face of the government, enterprises often can only accept and lack of choice.

Ways in which the administrative monopoly exerts its influence

There are two main ways in which the administrative monopoly produces its effect. First, the administrative monopoly acts directly on enterprises. For example, high barriers to entry, discriminatory prices, discriminatory subsidies, and a large number of approval processes will directly affect corporate decision-making and ultimate profits. Differential treatment is applied to market participants of different ownership and regions, such as discriminatory conditions for franchises, differential treatment of subsidies for goods and services, and different treatment of foreign and local investors. Administrative monopoly affects the effective operation of the market price mechanism through discriminatory policies, as the nature of enterprises or different market treatment in different regions tends to be different, and the external forces of the market make the competitiveness of the products of certain enterprises strengthened, while foreign enterprises are prone to suffer from unfair treatment, which makes it difficult for innovative enterprises in foreign countries to compete with local enterprises. Entry standards for certain industries are too high, making it difficult for potential competitors to enter, and administrative monopolies enjoy the excess profits that administrative monopolies bring; the result of this unearned profit is that these enterprises have no incentive to carry out innovative activities, leading to relatively weak market competitiveness. This is a huge difference from operators that have gained a dominant market position by increasing productivity, investing more in scientific research, and improving their technological and innovation capabilities.

Second, administrative monopoly interferes with market allocation of resources. Administrative monopoly through the control of resources to affect the market allocation of resources, resulting in factor mismatch and inefficient allocation of resources, such as SOEs and some “have relations,” enterprises can easily obtain land, capital, and other factors, while enjoying a lower cost, low-cost, or even zero-cost use of factors of production makes it difficult for other enterprises to compete with their fair competition. Administrative monopoly “protection” of enterprises due to low-cost use of market resources, with low-cost advantage, can bring rich profits and they do not have to increase investment in scientific research and improve innovation to meet the market demand for products and other ways to improve competitiveness, which directly leads to their weak sense of competition, poor innovation, competitiveness, and other problems. Problems. The impact of administrative monopoly on resource allocation, so that the market’s role in determining the allocation of resources is difficult to operate effectively, and the factors of production mismatch and inefficient allocation of resources are the most direct consequences of the capital market “rent-seeking” problem. Rent-seeking requires firms to incur some additional costs. However, compared with the high investment and high risk of failure required for firms' innovation activities, rent-seeking is less difficult and quicker to produce results. This makes firms more inclined to rent-seeking than to investing more in improving their technological innovation capabilities. Enterprises have a strong incentive to seek administrative monopolies, and the government has the will to provide administrative monopolies for some special purposes, so that the phenomenon of rent-seeking is difficult to disappear.

Administrative monopolies directly or indirectly affect the market environment and the flow of factors of production, and their impact on the economy is long, wide and deep. In order for the market to truly play a decisive role, administrative monopolies must be eliminated so that market players can participate in market competition on a fair basis, and the Government and relevant organizations and institutions should play a positive role of the visible hand, do a good job of serving the market, reduce unnecessary intervention in the market, and allow the invisible hand of the market to truly play a decisive role in the allocation of resources.

Institutional considerations of enterprise innovation: A reanalysis under double standards

The study of enterprise innovation should take into account the influence of China’s economic system and the special period of economic transition. Administrative monopoly is an important source of factor mismatch in the market, and breaking administrative monopoly can better promote the optimal allocation of resources and the agglomeration of all kinds of innovation factors to enterprises. Drawing upon the ISCP theoretical framework, this paper adopts an institutional lens to reevaluate innovation challenges.

To address administrative monopoly, it is essential to differentiate between its fundamental characteristics and superficial manifestations. Simplistic observations or a company’s ownership status alone cannot fully encapsulate administrative monopoly. Prior research linking SOEs or public ownership to administrative monopoly, while partially accurate, lacks comprehensiveness. For instance, SOEs dominate upstream industries, yet their monopoly often manifests as natural rather than administrative. This suggests that current SOE reforms are effective in mitigating administrative monopoly.

Administrative monopoly frequently exhibits geographical bias, favoring certain enterprises over others and prioritizing specific regions, leading to unequal treatment among economically comparable entities. This differential protection undermines market fairness, overly favors some enterprises at the expense of others, and threatens long-term economic sustainability.

This paper argues that the core attribute of administrative monopoly lies in its “dual standards,” referring to the discriminatory treatment of economic actors and entities. Under these dual standards, the manifestations of administrative monopoly vary across industries, regions, and enterprise types. Industries such as electricity, petroleum, telecommunications, steel, and automobiles are widely perceived to be plagued by severe administrative monopoly, closely linked to China’s economic system and the legacy of the planned economy. In these industries, SOEs occupy a substantial share and often receive preferential treatment from the government, including subsidies and barriers to entry and exit.

Regional administrative monopoly manifests as protectionist policies employed by local governments to safeguard their economies. This is evident in increased administrative approvals for foreign goods, discriminatory pricing, and subsidy policies. These issues extend beyond ownership, particularly when dual standards are applied to non-regional enterprises or goods. Additionally, enterprises of different ownership structures face varied treatment from government departments during administrative approvals, highlighting the interconnectedness of administrative monopoly across enterprises, industries, and regions.

Underlying the dual standards is the division of interests, where improper or illegal administrative means are utilized to safeguard a portion of the pie. This protection overlooks the importance of growing the pie, distinguishing it fundamentally from state macro-control, industrial policies, and economic policies. Administrative monopoly leverages local government authority without national will, aiming to safeguard regional or industry interests, ultimately undermining the unified national market. In contrast, the national goal is to expand and enhance the pie, with a focus on the future. Administrative monopoly, however, strives for each region or sector to claim a larger share, compromising national economic sustainability for short-term gains.

Coupled with the mixed ownership reform of SOEs implemented over the years and the diversification of the main body of investment in SOEs, the judgment of the nature of the enterprise has become a question of what kind of nature of the shares accounted for more. Administrative monopoly often exhibits a geographical bias, favoring certain enterprises over others and prioritizing specific regions while excluding others, thereby implementing differentiated treatment among economically equivalent entities. Administrative monopoly tries to use administrative power to “protect” the interests of a part of the market players, because this part of the market players is not through increasing R&D investment, improve their own innovation ability, and increase the competitiveness of the products to expand their own market advantage, so they can not actively adapt to the changes in the market, so as to lack of motivation to carry out innovative production activities. This kind of differential protection by administrative monopoly seriously jeopardizes the principle of fair competition in the market, over-protects the interests of some enterprises to the detriment of others, and causes long-term losses to the sustainable development of the economy (see Figure 1).

Figure 1.

Administrative monopoly leads to resource mismatch.

This paper argues that the most essential feature of administrative monopoly is the double standard of administrative monopoly (referred to as double standard), that is, the administrative monopoly subject’s differentiated treatment of the participants in economic activities as well as the subjects of economic activities. Under the double standard of administrative monopoly, the performance of administrative monopoly varies from industry to industry, region to region, and nature to nature. It is generally believed that certain industries in China, such as electric power, petroleum, telecommunications, iron and steel, automobile, and other industries, administrative monopoly is more serious, which is inextricably linked to China’s basic economic system plus the economic layout of the planned economy period; these industries SOEs account for a large proportion of the government and the relevant departments to give them “special care”; generally these industries National policies are tilted, such as the administration to give more subsidies and set up barriers to entry and exit of the industry. It is easy to see that the degree of administrative monopoly industry enterprise treatment is higher than the general industry. The “protection” afforded to incumbent enterprises by sectoral administrative monopolies undermines the mechanism of market competition. By reducing the competitive pressure on incumbent firms, this protection increases the additional income of these industries, thereby reducing their incentive to engage in innovative research. Regional administrative monopoly is the behavior of local governments and related departments to protect their regional economy, such as local protectionist policies often used by local governments to protect their regional economy, mainly manifested in the failure of the administrative departments to increase the administrative examination and approval links and raise the examination and approval thresholds for foreign and imported goods in accordance with laws and regulations or the State Council’s regulations, and the implementation of discriminatory pricing and discriminatory subsidy policies, services, and services. These issues are not simply a matter of ownership, when the double standard is reflected in the differentiated treatment made by government departments for non-regional enterprises or commodities. At the same time, enterprises of different natures will be treated differently by government departments when dealing with specific administrative approvals or other acts, so the administrative monopoly problems manifested by enterprises, industries, and regions are intertwined, only that administrative monopoly is more microscopic among enterprises of different natures and more macroscopic in the scope of industries and regions.

Behind the double standard is the division of the cake of interests and the use of improper or illegal administrative means to protect the interests of a part of the cake of interests, and this protection precisely ignores an important issue—to make a bigger cake, which is the administrative monopoly intervene in the economy and the state macro-control, industrial policy, and economic policy and so on the most essential difference. Administrative monopoly is realized through the use of local government organs of administrative power, does not have the national will, its purpose is to safeguard the local interests of the region or industry sector, and the result is to destroy the national unified big market. The goal of the state is to make the cake bigger and better, with a greater focus on the future; whereas the goal of administrative monopoly is for each locality or sector to share more of the cake itself, which, although it can bring momentary economic benefits to individual localities, comes at the cost of jeopardizing the sustainable development of the nation’s economy.

Data selection and measurement

The administrative monopoly intensity is set as follows.

The methods of measuring regional administrative monopoly are relatively rich, ranging from the ISCP comprehensive indicator method of Yu team to the method of estimation through single indicators such as state-owned output value. Because the ISCP method involves overly complex indicators and is quite difficult to operate in practice, this method is not used in this paper. In measuring administrative monopoly, a more straightforward approach was taken, encompassing a broader range of positive and negative indicators. The findings from this comparison with the ISCP results revealed a notable degree of alignment between the two algorithms. Utilizing the method of adding points to positive indicators and subtracting points to negative indicators, which is relatively easy to operate in practice, this paper uses the positive and negative indicators method to measure the level of administrative monopoly from 2009 to 2015. The method contains the following six indicators (see Table 1).

Table 1.

Indicators and explanations of administrative monopolies.

Positive indicators	Proportion of the national economy that is state-owned (influence of the state economy)	State-owned economy as a share of GDP. The main selections for the state-owned economy are the value of industrial output, total investment in fixed assets, and the number of people employed in the country
	Local government administrative monopoly capacity	Government revenue as a share of GDP
	Government capacity to intervene in markets	Government consumption as a share of total social consumption
Negative indicators	Marketization of ownership structure	The share of the non-state economy in total industrial output and employment as a percentage of national industrial output and employment
	Marketization of government	Government consumption as a share of GDP
	Marketization of investments	Share of non-state economy investment in total social investment

The relevant measures of the degree of factor mismatch are as follows.

There are more data measures of elemental mismatch, and different methods yield different conclusions; here the commonly used classical production function method is used for the measure, with a super-logarithmic production function, as equation (1):

\ln Y_{i t} = λ_{0} + λ_{1} \ln L_{i t} + λ_{2} \ln K_{i t} + \frac{1}{2} λ_{3} {(\ln L_{i t})}^{2} + \frac{1}{2} λ_{4} {(\ln K_{i t})}^{2} + λ_{5} \ln K_{i t} \ln L_{i t} + ε_{i t}

(1)

Y denotes regional output. K denotes capital stock. L denotes regional labor force. ε is a random perturbation term. i denotes region, and t is time. Equation (1) is derived for L and K, respectively, to obtain the marginal output of labor and capital, as equation (2):

M P L = (λ_{1} + λ_{3} \ln L + λ_{5} ln K) \frac{Y}{L}; M P K = (λ_{2} + λ_{4} \ln K + λ_{5} \ln L) \frac{Y}{K}

(2)

Labor factor mismatch can be expressed as the marginal output of labor divided by the cost of labor use, the data on labor cost is the average wage at the end of the calendar year in each region, the data on the average wage at the end of the calendar year, and the number of laborers come from the average wage of employed persons and the number of employed persons at the end of the calendar year in the “China Labor Statistical Yearbook”; the mismatch in the factor of capital can be expressed as the marginal output of capital divided by the price of the price of capital is the interest rate of loans in the calendar year, and the interest rate of loans is from the benchmark interest rate of the RMB legal loans of the financial institutions in the “China Statistical Yearbook.”

The degree of labor mismatch is shown in equation (3):

D i s l = \frac{M P L}{w} D i s k = \frac{M P K}{r}

(3)

where w is the use cost of labor and r is the use cost of capital.

The capital stock-related measurements are as follows.

For the calculation of capital stock, the year 2000 is used as the base year and the perpetual inventory method is used for the machine calculation of capital stock. The data of provinces, autonomous regions, and municipalities directly under the central government in 2000 are chosen to be the capital stock calculated at current prices. Since their study merged Chongqing data into Sichuan after 1996, Chongqing is again separated from Sichuan here for the purpose of studying Chongqing. By comparing the GDP data of Chongqing and Sichuan before 2000, it is found that the ratio of capital stock to GDP of the two regions has remained relatively stable in all time periods. Taking advantage of this feature, the capital stock data of the two regions are machine-calculated with the GDP and capital stock data of the past years to obtain the capital stock data of Chongqing in 2000. Regarding the choice of depreciation rate previous scholars’ studies vary quite a bit, summarized in two main methods, the first estimation method is to estimate a reasonable depreciation rate based on the actual situation; the second method is the formula method: depreciation amount = GDP - national income + subsidies -indirect taxes. The first depreciation method is used here, setting the depreciation rate for gross fixed capital formation in each province at 9.60%.

Calculation of physical capital stock by perpetual inventory method, as equation (4):

K_{t} = K_{t - 1} (1 - a_{t}) + I_{t}

(4)

K denotes the physical capital stock, t denotes time, and K_t is the physical capital stock in year t. a_t is the depreciation rate in year t and I_t is the investment in year t. I_t is the total fixed capital formation in year t. The capital stock is measured using 2000 as the base year, and the physical capital stock is calculated year by year using the fixed asset investment price index for each year.

Empirical analysis: The impact of administrative monopolies on corporate innovation

This paper uses the re-measured labor mismatch and capital mismatch levels with 2000 as the base year and re-measures the level of administrative monopoly using the positive and negative indicator method to test the impact of administrative monopoly on enterprise innovation. The core explanatory variable is the level of administrative monopoly. However, given that corporate innovation is subject to a multitude of influencing factors, the study has integrated several additional control variables into the analytical framework. Notably, the urbanization level (Urb) has been introduced as a key variable, given its significance in representing the density of the urban population and its potential impact on fostering innovative endeavors. Furthermore, openness to the outside world (Open) is introduced, reflecting a region’s tolerance and attraction for foreign influences, ideas, and resources crucial for innovation. Lastly, GDP per capita (Agdp) is added as an indicator of the economic development level, which can influence the availability of resources for investment in innovation. In addition, in the robustness analysis, innovation inputs are used to replace innovation outputs, and the results are further validated by region. Due to data availability constraints, the empirical analysis presented here relies on panel data from 30 regions spanning 8 years, from 2008 to 2015¹ (see Tables 2 and 3).

Table 2.

Description of indicators.

Norm	Name (of a thing)	Account for	Source (of information etc.)
Inv	Patents for inventions	Number of patents for inventions per year	China Science and Technology Statistical Yearbook
Mon	Administrative monopoly intensity	Comprehensive statistical indicators	Statistical yearbooks
Urb	Urbanization level (of a city)	Share of urban population at the end of the year	China Population and Employment Statistics Yearbook
Open	Economic openness	Total exports and imports as a percentage of GDP	China Statistical Yearbook
Disl	Degree of labor mismatch	Ratio of marginal output of labor to price of labor (base year 2000)	China Labor Statistics Yearbook, China Statistical Yearbook, and provincial statistical yearbooks
Disk	Degree of capital mismatch	Ratio of marginal output of capital to price of capital (base year 2000)	China Statistical Yearbook, China Financial Statistics Yearbook, and provincial statistical yearbooks
Agdp	Real GDP per capita	GDP-to-population ratio by region (base year 2000)	China Statistical Yearbook and provincial statistical yearbooks

Table 3.

Results of descriptive statistics of variables.

	Inv	Mon	Disl	Disk	Urb	Open	Agdp
Observed value	240	240	240	240	240	240	240
Average value	3.29	0.60	5.72	−0.04	0.54	0.32	1.06
(Statistics) standard deviation	0.66	0.09	17.01	0.30	0.13	0.37	0.50
Minimum value	1.45	0.46	−60.43	−0.87	0.29	0.04	0.42
Maximum values	4.75	0.84	60.30	0.91	0.90	1.66	2.66

Detailed description of the three control variables.

(1) Levels of Urbanization and Innovation

Higher levels of urbanization mean that more people are concentrated in cities, which helps to promote innovative activities. As a gathering place of knowledge, information, and talents, cities provide rich resources and environment for innovation. As the level of urbanization rises, innovation actors such as research institutions, universities, and enterprises in cities are able to collaborate and communicate better, thus promoting technological innovation and industrial upgrading.

(2) Urban Openness and Innovation

The degree of openness of a city reflects its tolerance of foreign population, culture, and ideas. A city with a high degree of openness is more likely to attract and accommodate foreign innovation resources and elements, including talent, technology, and capital. The inflow of these resources provides more possibilities and impetus for urban innovation. At the same time, an open cultural environment is also conducive to generating, testing, exchanging, and integrating a wide variety of new ideas, methods, and concepts, which in turn improves the research efficiency of science, technology, and innovation, among others.

(3) GDP Per Capita and Innovation

GDP per capita is an important indicator for measuring the level of economic development of a country or region. Generally speaking, a region with higher GDP per capita also has a relatively high level of economic development, which means that the region has more resources and capabilities to invest in innovation activities. At the same time, a higher level of economic development is often accompanied by better market mechanisms, more advanced industrial systems, and more abundant research inputs, all of which are conducive to the development of innovative activities.

Processing of panel data

Before the panel data analysis, generally to carry out the smoothness test of the data, unit root test process can effectively find the smoothness of the data, the specific test methods are many, such as the ADF unit root test, DF unit root test, PP unit root test, LLC unit root test, HT unit root test, and so on.

The IPS, ADF, PP, and Breitung t-stat tests show that invention patents, level of administrative monopoly, degree of power mismatch, and degree of capital mismatch are smooth data. The following unit root test results are presented (see Tables 4 and 5).

Table 4.

Individual variable unit root test.

		Method test method
		Levin, Lin, and Chu t*	Breitung t-stat	Im, Pesaran, and Shin W-stat	ADF-Fisher Chi-square
Inv	Statistic	−15.23	−4.69	143.80	275.24
Inv	Prob.**	0.00	0.00	0.00	0.00
Mon	Statistic	−8.81	−0.60	137.59	196.68
Mon	Prob.**	0.00	0.27	0.00	0.00
Disl	Statistic	−30.87	−12.99	272.69	454.90
Disl	Prob.**	0.00	0.00	0.00	0.00
Disk	Statistic	−11.72	−3.31	109.78	126.59
Disk	Prob.**	0.00	0.00	0.00	0.00
Urb	Statistic	−11.82	−1.8014	114.3570	88.6428
Urb	Prob.**	0.00	0.04	0.00	0.01
Open	Statistic	−6.18	−0.55	94.47	106.77
Open	Prob.**	0.00	0.29	0.00	0.00
Agdp	Statistic	−12.29	−1.45	101.75	26.84
Agdp	Prob.**	0.00	0.07	0.00	1.00

Table 5.

Overall unit root test.

Method test method	Statistic	Prob.** p-value
Breitung t-stat	−2.92	0.00
Im, Pesaran and Shin W-stat	−1.99	0.02
ADF-Fisher Chi-square	378.80	0.00
PP-Fisher Chi-square	657.70	0.00

Pseudo-regression can be avoided by performing a unit root test on the data, which rejects the original hypothesis whether it is the same unit root test or a different unit root test, indicating that the data are smooth.

Panel coefficient of variation models

The relationship between enterprise innovation and administrative monopoly will change with time, plus the enterprise’s own situation will change with the change of market competition situation. Therefore, it can be expected here that the impact of administrative monopoly changes in different periods on enterprise innovation should be different, so the variable coefficient panel model is chosen here to estimate the sample (see Table 6).

Table 6.

Econometric and robustness tests for variable coefficient models.

	Nationwide		The east		Central section		Western part
	Inv	R&D	Inv	R&D	Inv	R&D	Inv	R&D
Mon	−4.19***	−3.84***	−9.57***	−10.32***	−2.491*	−1.62***	−3.70***	−2.89***
Urb	0.56*	1.47*	0.67***	1.68***	0.43**	1.39*	0.39*	1.39*
Open	0.48	−0.02	0.58***	0.17	−2.40	−2.06	1.98***	1.46***
Agdp	0.26	0.49	0.80***	1.03***	−0.44	−0.19	−0.72**	−0.12
C1	5.17***	7.56***	6.95***	10.09***	5.01***	7.18***	5.21***	7.14***
X2	5503.47***	3998.00***	1344.40***	1345.93***	1554.36***	968.97***	763.32***	973.75***
2009	−3.72***	−3.60***	−8.74***	−9.78*	−2.23*	−1.58	−3.30*	−2.62
2010	−3.67***	−3.48***	−8.85***	−9.80*	−1.97***	−1.34	−3.19***	−2.48**
2011	−3.68***	−3.49***	−8.99**	−9.97	−1.82**	−1.20**	−3.14***	−2.43**
2012	−3.48***	−3.41***	−8.77***	−9.85	−1.68**	−1.10***	−2.94***	−2.37**
2013	−3.38***	−3.36***	−8.78***	−9.90	−1.56**	−1.10***	−2.82***	−2.33***
2014	−3.31***	−3.39***	−8.73***	−9.99	−1.47**	−1.04***	−2.79***	−2.37**
2015	−3.25***	−3.24***	−8.70**	−9.78*	−1.62**	−1.01***	−2.65***	−2.18***

Note: Estimates of coefficients, ***, **, and * indicate significance at the 1%, 5%, and 10% levels, respectively.

Model 1, as equation (5):

I n v_{i t} = α_{i t} M o n_{i t} + α_{1} U r b_{i t} + α_{2} O p e n_{i t} + α_{3} A g d p_{i t} + c_{1}

(5)

In equation (5), the subscript t of each variable indicates that it is time-varying, and it is estimated using Stata13.0 for panel data. Firstly, the model is subjected to the χ² test, and the results of the χ² test in Table 6 significantly reject the original hypothesis that the estimated coefficients are constant, and it can be concluded that the estimated coefficients of the administrative monopoly are significantly different in different periods during the reporting period, and the variable coefficient model is appropriate to be used. Here, the variable coefficient model can be used to observe more intuitively the changes in the coefficients in each period.

First, administrative monopoly has a significant and robust deterrent effect on both firms’ innovation inputs and innovation outputs. In order to test the robustness of the measurement results, the robustness test is conducted here by replacing Inv with R&D, and the results show that the model is highly robust. Specifically, among the four regions, the estimated coefficient of administrative monopoly (Mon) is significant at the 1% level, and the estimated coefficients of the four groups are significantly negative, which illustrates the significant hindering effect of administrative monopoly on research and development (R&D) investment (R&D) and invention patents (Inv), and that is to say, administrative monopoly negatively affects both the input side and the output side of the firms’ innovation activities. The estimated coefficients of administrative monopoly (Mon) for the whole country and the eastern, central, and western regions are all less than zero, in which the estimated coefficients of the eastern region are the largest in all the years, followed by the western and central regions, for example, in 2015, if the intensity of administrative monopoly decreases by 1 percentage point, the invention patents of the enterprises in the whole country will be increased by 3.25 percentage points, and the R&D inputs will be increased by 3.24 percentage points; in the eastern region, the invention patents and R&D inputs will be increased by 8.70 and 9.70, respectively. In the eastern region, invention patents and R&D investment will increase by 8.70 and 9.78 percentage points; in the central region, invention patents and R&D investment will increase by 1.62 and 1.01 percentage points; and in the western region, invention patents and R&D investment will increase by 2.65 and 2.18 percentage points, respectively. From the estimated coefficients, the innovation activities of enterprises in the east are most seriously hindered by administrative monopoly, followed by the west and central regions. Over time, the estimated coefficient of administrative monopoly is getting smaller and smaller, indicating that the obstruction of innovation by administrative monopoly is decreasing, which is closely related to China’s efforts to deepen the market economic reform and reduce administrative monopoly through a variety of means and ways. The estimated coefficients of the control variables Open and Agdp show that they have a facilitating effect on the input and output sides of enterprises’ innovation and R&D, and their effects on the input side are significant, while the effects on the output side are not significant. Gross domestic product per capita (Agdp) can reflect the level of economic development and the living standard of residents in a region. Generally speaking, the social capital of a region with a higher level of economic development will be more abundant, which can provide sufficient funds for the innovative activities of enterprises, so the impact of Agdp on R&D input should be more significant. According to the calculation, the intensity of administrative monopoly in the east is the smallest (the average administrative monopoly level in the three regions during the calculation period is 0.54 in the east, 0.57 in the center, and 0.67 in the west), but the estimated coefficient is the largest among the three regions, which means that the administrative monopoly has the most significant impact on enterprise innovation in the east. The eastern region represents the vanguard of reform and development. It exhibits greater economic advancement, enterprise scientific and technological innovation capacity, and a higher level of enterprise innovation vitality. The results of the measurement demonstrate that reducing the intensity of administrative monopoly will significantly enhance enterprise innovation vitality, thereby increasing the level of enterprise R&D innovation input and output. The impact of administrative monopoly on enterprise innovation in the central and western regions is relatively small, which may be due to the general level of economic development in the region, enterprise innovation ability is not high, but the elimination of the impact of administrative monopoly can also promote the enhancement of the level of innovation of enterprises. Therefore, the elimination of administrative monopoly is of great significance to the improvement of innovation level in the whole country (see Figures 2 and 3).

Figure 2.

Administrative monopolies by year. Source: Compiled and measured.

Figure 3.

China’s GDP growth rate. Source: China Statistical Yearbook.

The increased openness of the economy has effectively contributed to the increase in enterprises’ investment in innovation. As can be seen from Figure 2, the administrative monopoly intensity of the whole country and 30 provinces, municipalities directly under the central government, and autonomous regions is generally on a declining trend, although some provinces have seen a small rebound in some years (2005 and 2009), which did not change the overall declining trend of administrative monopoly. Changes in administrative monopoly intensity reflect China’s economic development. 2001–2007 is a period of rapid decline in administrative monopoly intensity, the most obvious decline in administrative monopoly intensity in various regions during this period, and even some regions fell by 40%–50%, and this period of sharp decline in administrative monopoly is not unrelated to China’s accession to the World Trade Organization (WTO). 2001 China formally acceded to the WTO, China’s further opening up to the outside world, the degree of further expansion of the WTO. In 2001, China formally joined the World Trade Organization (WTO), marking a significant step in its openness to the global economy. Since then, China has witnessed a remarkable expansion in foreign trade, a notable deepening of regional integration into the world economy, and a notable accession. China's accession to the WTO has facilitated economic and trade exchanges with the global community, effectively undermining the grip of local protectionism and market segmentation. The dismantling of administrative monopolies has curtailed the overall strength of these monopolies, which were detrimental to the overall growth and development of the economy. During this period, some of the domestic competitive pressures were shifted abroad, a large number of commodities had broader foreign markets, the level of domestic administrative monopolies declined rapidly, and enterprises endeavored to maintain their competitive advantages in the international market through the introduction of technology, increased investment in innovation, and so on.

At the same time, the intensity of administrative monopoly is to a certain extent affected by the economic cycle, the global financial crisis broke out in 2008, the economic development of various regions in China was affected by it, and the intensity of administrative monopoly rebounded to a certain extent from 2008 to 2009. During the crisis, the downward pressure on the economies of various countries increased, world trade was greatly affected, the first signs of international trade protectionism reappeared, and the volume of China’s import and export trade declined rapidly; domestically, local governments adopted some administrative monopoly behaviors to protect their regional economies in order to promote the economic development of their own regions, and there was a short-lived rise in the level of administrative monopoly in certain regions. Combined with Figures 2 and 3, it can be seen that there is a certain negative correlation between administrative monopoly intensity and GDP growth rate. China’s GDP growth can be divided into two periods, the accelerated growth period (2001–2007) and the growth slowdown period (2008–2019), which basically coincides with the declining trend of administrative monopoly intensity, the administrative monopoly intensity experienced a rapid decline before 2007, the decline of administrative monopoly intensity after 2008 is relatively slow, and the resistance of administrative monopoly to the economic development will be as the economic The resistance of administrative monopoly to economic development will become smaller and smaller as the level of development increases.

Empirical analysis of impact pathways

In this analysis, the impact of factor mismatch has been incorporated, along with the introduction of an interaction term between administrative monopoly and factor mismatch into the model. The objective is to examine whether administrative monopoly exerts an influence on enterprise innovation via factor mismatch. For this purpose, capital mismatch and labor mismatch indicators have been selected and integrated into the model. In order to ensure the comprehensiveness of the estimation, it is estimated below in four cases. Estimated equations (6) and (7) are the cases that only include labor mismatch or capital mismatch, and estimated equations (8) and (9) are the cases where both exist. The specific models are presented in equations (6)–(9):

l n v = β_{1} M o n_{i t} + β_{2} M o n_{i t} * D i s k_{i t} + β_{3} O p e n + β_{4} U r b + β_{5} A g d p

(6)

l n v = β_{1} M o n_{i t} + β_{2} M o n_{i t} * D i s l_{i t} + β_{3} O p e n + β_{4} U r b + β_{5} A g d p

(7)

l n v = β_{1} M o n_{i t} + β_{2} M o n_{i t} * D i s l_{i t} + β_{3} M o n * D i s k_{i t} + β_{4} O p e n + β_{5} U r b + β_{6} A g d p

(8)

l n v = β_{1} M o n_{i t} * D i s l_{i t} + β_{2} M o n * D i s k_{i t} + β_{3} O p e n + β_{4} U r b + β_{5} A g d p

(9)

Based on Table 7, it is evident that, firstly, whether there is only one instance of labor mismatch or capital mismatch present (2, 3) or both occur simultaneously (4, 5), their estimated coefficients are less than zero, which indicates that administrative monopoly can impede firms’ innovations through labor and capital mismatch and that administrative monopoly-induced factor irrationality does reduce firms' incentives to innovate. Second, relative to labor mismatch, capital mismatch is a more serious impediment to firm innovation (|−0.009| < |−0.339|, |−0.119| < |−0.214|, |−0.003| < |−0.309|). Chinese policies have a great influence on capital allocation, and capital mismatch is mainly affected by financial frictions and policy distortions, with large differences in capital mismatch across firms with different ownership structures. Capital mismatch has a relatively large impact on firm innovation, and the high investment in technology and capital for firm innovation makes the shape of innovative firms more like a collection of capital- and technology-intensive firms. The excessive intervention of administrative monopoly in the financial market distorts the direction of capital allocation, aggravates the degree of capital mismatch, and leads to difficulties in enterprise financing. It is also important to acknowledge that China is currently undergoing a significant economic transformation, with a shift from labour-intensive enterprises to capital- and technology-intensive ones. At present, Chinese enterprises are developing in the direction of cleaner, more environmentally friendly, and efficient capital-intensive and technology-intensive, and at the same time, with the rise of digitalization and intelligence, more and more processing industries are transforming into mechanized, intelligent, and unmanned, and machines and intelligent robots are becoming more and more substitutable for front-line laborers, which exacerbates the demand for capital. Coupled with the fact that China’s financial market is not well developed, the problem of enterprise financing has not been fundamentally resolved, and the degree of capital mismatch in the financial market is relatively high. Eliminating administrative monopoly intervention in the financial market at this time will improve the degree of capital mismatch and will have a positive effect on the healthy development of enterprises.

Table 7.

Estimated results of the administrative monopoly path.

Inv	2	3	4	5
Mon	−0.74*	−3.78***	−3.79***
MonDisl*		−0.01***	−0.012***	−0.00***
MonDisk*	−0.34***		−0.21	−0.03**
Open	−0.12*	0.76***	0.77***	0.83
Urb	5.10***	−2.05***	−2.03***	−2.85***
Agdp	0.05***	0.16***	0.16***	0.24***
c	0.88***	5.82***	5.84***	3.63***

Note: Estimates of coefficients, ***, **, and * indicate significance at the 1%, 5%, and 10% levels, respectively.

Conclusion

The Chinese government is actively promoting the construction of an innovative country, attempting to inject sustained momentum into national development through scientific and technological innovation. In this process, as enterprises are the core subjects of innovation, enhancing their innovation capabilities and ensuring unobstructed paths for innovation are particularly crucial. This paper delves into the importance of eliminating administrative monopolies to promote enterprise innovation. With the deepening of economic reforms and the gradual disappearance of traditional production factor dividends, the obstructive effects of administrative monopolies on the economy have become increasingly prominent, severely interfering with the efficient allocation of resources by the market.

To optimize resource allocation and improve market efficiency, it is imperative to resolutely break administrative monopolies and consolidate the decisive position of the market in resource allocation. As a result, innovative resources can flow more efficiently to innovative enterprises, thereby driving their innovative development. Research findings indicate that capital mismatch poses a greater obstacle to enterprise innovation than labor mismatch. Therefore, deepening reforms in the capital and financial markets, eliminating obstacles in the capital market, and creating a favorable capital environment for enterprise innovation are particularly important.

Simultaneously, the pace of market-oriented reforms must be unwavering, clarifying the dominant position of the market in resource allocation and defining the relationship between the government and the market, as well as between the government and enterprises. The government should focus on the overall economic development, insightfully identify market problems, play a role in overall planning, and actively guide the healthy development of enterprises. China’s reform journey is still long, and building an innovative country requires both the active participation of the government and the abandonment of simple and crude approaches like administrative monopolies. Instead, it demands guidance through institutional and policy levels to create a superior economic and social environment for enterprise innovation.

It’s worth mentioning that China’s efforts and achievements in addressing administrative monopoly issues provide valuable lessons for the rest of the world. Firstly, explicitly prohibiting administrative monopoly behaviors through legal means and establishing specialized anti-monopoly agencies for supervision and law enforcement set an example for other countries. Secondly, the Chinese government’s determination and actions in promoting market-oriented reforms and optimizing the business environment demonstrate the active role of the government in promoting fair market competition. Furthermore, China has enhanced the credibility and effectiveness of anti-monopoly law enforcement by strengthening social supervision and improving transparency. These experiences are significantly referential for other countries facing similar issues.

Additionally, enterprise innovation is not only influenced by the domestic policy environment but is also closely connected to the international political and economic situation. Since the 2008 financial crisis, the uncertainty of the international political and economic situation has been increasing. To address these challenges and accelerate the construction of an innovative country, the Chinese government needs to actively promote high-quality economic development, facilitate industrial structure transformation and upgrading, and create a superior business environment for enterprises. Meanwhile, it should protect the legitimate rights and interests of local enterprises in the international market, assist them in exploring international markets, and enhance the overall international competitiveness of the national economy. These measures are not only significant for China’s own development but also provide beneficial references for other countries when facing similar international environmental challenges.

Statements and declarations

Footnotes

Acknowledgments

The authors would like to thank this institution for generous support.

Conflicting interest

The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The authors disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This research was funded by the National Natural Science Foundation of China (NSFC) project “Research on the Effectiveness and Coordination Mechanism of China’s Industrial Policy and Competition Policy” (Grant No. 71473151).

Note

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