Journal article
Home bias and market power: Evidence from the Chinese automobile industry
The Canadian journal of economics, v 54(3), pp 986-1017
01 Nov 2021
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
We investigate the interaction between home bias and market power by estimating an equilibrium oligopoly model using a dataset of new car registrations across Chinese provinces. We find a more elastic demand for home brands on average, despite a consistently stronger preference and cost advantages for local manufacturers. This limits the extent of home bias. Ignoring such effect would lead to an overestimation of home market share by 281% and overstate the cross region trade barriers. We also find that home bias is gender neutral and increases with age. Resume Preference nationale et pouvoir de marche: l'exemple de l'industrie automobile chinoise. Dans cet article, nous etudions l'interaction entre la << preference nationale >> et le pouvoir de marche en estimant un modele d'equilibre oligopolistique s'appuyant sur un ensemble de donnees relatives aux nouvelles immatriculations automobiles dans les provinces chinoises. Nous constatons qu'en moyenne, la demande est plus elastique pour les marques locales en depit d'une preference toujours plus forte et d'avantages toujours plus accrus en matiere de couts pour les fabricants locaux. La portee de cette preference nationale est donc limitee. Le fait d'ignorer ce parametre d'elasticite reviendrait a surevaluer la part du marche interieur de 281 % et a surestimer les barrieres commerciales interregionales. Nous constatons egalement que la preference nationale concerne autant les femmes que les hommes et augmente avec l'age.
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Details
- Title
- Home bias and market power: Evidence from the Chinese automobile industry
- Creators
- Mian Dai - Drexel UniversityQiang Gong - Zhongnan University of Economics and LawShiyu Tan - Institute of Industrial Economics and Center for Regulation and Competition Jiangxi University of Finance and Economics
- Publication Details
- The Canadian journal of economics, v 54(3), pp 986-1017
- Publisher
- Wiley
- Number of pages
- 32
- Grant note
- 71773143; 71763009; 71963017; 72164012 / National Natural Science Foundation of China; National Natural Science Foundation of China (NSFC) JD18097 / Foundation for Key Research Base of Humanities and Social Sciences in Colleges and Universities of Jiangxi Province ZDSK202102 / Major Bidding Projects of Economic and Social Development of Nanchang
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Web of Science ID
- WOS:000719614400001
- Scopus ID
- 2-s2.0-85119110273
- Other Identifier
- 991019168893004721
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Economics