Nonlinear impact of market segmentation on the upgrading of Chinese manufacturing enterprises

Purpose Prior studies have confirmed market segmentation as an important shackle to China's macroeconomy upgrade, but the systematic analysis of microenterprise upgrade remains inadequate. This paper aims to investigate the nonlinear impact of market segmentation on microenterprise upgrade. Des...

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Bibliographic Details
Published in:Chinese management studies 2023-04, Vol.17 (3), p.510-528
Main Authors: Yuan, Sai, Pan, Xiongfeng
Format: Article
Language:English
Subjects:
Capital markets
Commodities
Competition
Economic analysis
Economic growth
Efficiency
Hypotheses
Labor
Labor market
Local government
Manufacturing
Market segmentation
Method of moments
Political parties
Productivity
Protectionism
Regions
Small business
Upgrading
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Summary:Purpose Prior studies have confirmed market segmentation as an important shackle to China's macroeconomy upgrade, but the systematic analysis of microenterprise upgrade remains inadequate. This paper aims to investigate the nonlinear impact of market segmentation on microenterprise upgrade. Design/methodology/approach The price method was applied to calculate China's provincial market segmentation, including commodity, capital, labor and energy. The generalized method of moments was employed to examine the nonlinear impact of market segmentation on the upgrading of manufacturing enterprises based on microenterprise data from 2003 to 2019. Findings First, China’s heterogeneous market segmentations have been significantly reduced. Macroeconomics and policies are critical factors in market integration. Second, there is an inverted U-shaped relationship between China’s total market segmentation and the upgrading of manufacturing enterprises. Third, the relationship between the commodity market segmentation, labor market segmentation, energy market segmentation and manufacturing enterprises' upgrade is shown as an inverted U-shaped. Nevertheless, the relationship between the capital market segmentation and upgrading of manufacturing enterprises exhibits a U-shape. Originality/value The impact of market segmentation on the upgrading of manufacturing enterprises in China performs nonlinearly. An inverted U-shaped relationship exists between market segmentation in commodity, labor and energy and the upgrading of manufacturing enterprises, while a U-shaped relationship prevails between capital market segmentation and the upgrading of manufacturing enterprises.
ISSN:1750-614X
1750-6158
1750-614X
DOI:10.1108/CMS-08-2021-0334