Market size in China weeds out firms, impacting productivity and competition.
The article looks at how the size of markets in China affects how well companies do. They studied data from 1998 to 2007 in different industries. They found that bigger markets make it harder for some companies to survive. This is especially true in industries with more competition or where products are different from each other. Companies in areas with more jobs tend to do better, but this can also mean more competition. The results were consistent even when looking at different ways of measuring productivity.