Macro Competition Policy, Financial Frictions, and Productivity Gains: Evidence from a Quasi-Natural Experiment of Anti-Monopoly Law

This paper examines whether macro competition policy improves firm total factor productivity by mitigating financial frictions. Using the implementation of China’s Anti-Monopoly Law as a quasi-natural experiment, we employ a difference-in-differences approach based on Chinese listed firms from 2006 to 2023. The results show that the Anti-Monopoly Law significantly increases firm total factor productivity. Mechanism analyses further indicate that the policy alleviates financial frictions by reducing resource misallocation and easing financing constraints, thereby improving resource allocation efficiency. Heterogeneity analyses show that the positive effect is more pronounced among high-tech firms, non-heavily polluting firms, firms in eastern China, and non-state-owned firms. The findings suggest that macro competition policy can promote firm productivity through the mitigation of financial frictions.