Anti-trust law, financing advantage and common prosperity within firms

Abstract

The Anti-trust Law, which embodies the principles of an "active government" and an "efficient market", plays a significant role in shaping the initial income distribution of enterprises and realizing common prosperity. Based on the Chinese A-share listed firms, this study reveals that enforcing the Anti-trust Law impacts labour income, labour income share, and the income disparity within firms with higher monopolistic power. The improvement is primarily due to the Anti-trust Law's influence on the composition of factors, resulting in a more equitable and competitive market environment for debt and equity, reducing the financing advantage enjoyed by highly monopolistic enterprises.