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This paper considers aspects of the competitive selection process in China - firm entry, survival, and exit - in an important sector of manufacturing, looking in particular for changes resulting from the process of reform. Using industry census data from a province in North-East China, we find substantial differences in the process between ownership types. By conducting decompositions of aggregate growth and exploring the determinants of firm's exit using a hazard rate model, we observe a substantial rate of churning of enterprises in the sector, finding that the competitive selection processes operate, for small and collectively owned enterprises (COEs), in a manner consistent with what is known about a private market economy. While the hazard for state owned enterprises (SOEs) is lower than for COEs, we find that the reforms introduced in 1992 were important in closing the gap for similarly situated firms. © 2012 Elsevier B.V

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Safe harbours in merger guidelines define postmerger market concentration or concentration change thresholds below which proposed mergers are unlikely to be anti-competitive; anti-competitiveness is usually measured as a 'substantial lessening of competition'. Yet competition agencies have different safe harbours. We used merger models to run many simulations involving a wide range of market structures and merger-induced aggregations. The post-merger unilateral price increases in these scenarios were used to gauge what the safe harbours should be to keep price increases below a specified threshold. The safe harbour thresholds commonly used were found typically to be too restrictive, in that they failed to screen out mergers that were almost certainly competitively benign.