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

Articles in Press

Document Type : Review article

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Department of Management Sciences Preston University Islamabad

10.22059/ijms.2025.392195.677482

Abstract

This study investigates competition amongst 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 (using the proxy of research and development intensity), Firm Size (FS), Firm Age (FA), Finance Leverage (LEV), and economic growth rate. It has been observed that moderate levels of rivalry in the market increase a company’s productivity and creativity, but heavy competition might hinder its performance. Innovation usually results in greater productivity and leads to the growth of the economy. An increase in firm size and commitment time leads to better productivity, but having a lot of debt brings about poorer performance. The growth in the GDP is mainly driven by competition and innovation at the bigger picture level. It points out that having balanced competition together with policies that help innovation is necessary. They give advice to policy officials and CFOs on how to design companies for maximum advantage, support innovation, and fulfill sustainability goals.

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Interdisciplinary Journal of Management Studies

Articles in Press, Accepted Manuscript
Available Online from 30 September 2025

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