Helu Jiang is an Assistant Professor at Institute for Advanced Research, Shanghai University of Finance and Economics. She obtained the Ph.D in Economics at Washington University in St. Louis and B.A. in Economics and Mathematics at University of Wisconsin-Madison. Her research lies mainly in macroeconomics, growth and development, demographics, innovation and entrepreneurship.
Prior literature points to firm entry as a major contributor to productivity growth in the Chinese manufacturing sector across time and space (Brandt, van Biesebroeck and Zhang, 2012 and Brandt, Kambourov and Storesletten, 2020). Using the Annual Surveys of Industrial Firms together with the Chinese Industrial Census, we show empirical evidence that market-level entry not only affects productivity growth of the incumbents but also the market structure itself, suggesting a pro-competitive effect on growth from firm entry. We then embed firm entry into an endogenous growth model with step-by-step innovation based on Aghion, Harris, Howitt and Vickers (2001) and calibrate it to the data to quantify the significance of the such a channel for the Chinese manufacturing sector. More generally, we highlight the critical role of reducing entry barriers in promoting competition and growth in developing countries.