The Role of Competition in Private Enterprise and Its Effect on the Economic Growth of the Country: A Study on Private Enterprises in China

Document Type : Review article

Authors

Department of Management Sciences, Preston University, Islamabad Campus, Islamabad, Pakistan

10.22059/ijms.2025.392195.677482

Abstract

This study investigates competition among private enterprises and whether competition positively affects China's economic performance. It uses a cross-sectional dataset of 500 firms collected over five years. The research uses the generalized method of moments (GMM) model to manage endogeneity and unobserved heterogeneity. The analysis focuses on essential factors, such as work output efficiency, cost recovery, market rivalry, innovation (proxied by research and development intensity), firm size (FS), firm age (FA), financial leverage (LEV), and economic growth rate. It has been observed that moderate market rivalry increases a company's productivity and creativity, while heavy competition can hinder its performance. Innovation usually results in greater productivity and economic growth. An increase in firm size and commitment time leads to higher productivity, but excessive debt leads to poorer performance. GDP growth is mainly driven by competition and innovation at the big-picture level. It points out that balanced competition, along with policies that support innovation, is necessary. They provide guidance to policy officials and CFOs on how to design companies for maximum advantage, support innovation, and achieve sustainability goals. Researchers are invited to examine differences by sector and region to increase the scope of their findings.

Keywords

Main Subjects

References

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Interdisciplinary Journal of Management Studies
Volume 19, Issue 2
April 2026
Pages 367-377

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