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Chinese listed firms that make greater use of data exert less market power, with the effect strongest in high‑tech firms and in regions with stronger IP and market institutions; the association persists after extensive robustness and mediation checks.

Breaking the Deadlock in a Monopoly Trend: How Can Data Element Utilization Weaken Corporate Market Power?
Zhian Yang, Chenming Yu · August 01, 2026 · International Review of Economics & Finance
openalex quasi_experimental medium evidence 7/10 relevance Summary only summary available; pdf_status=paywall DOI Source PDF

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Using a 2010–2024 panel of Chinese A‑share firms, higher firm-level data utilization is associated with significantly lower market power, an effect robust to multiple controls, mediation tests, and heterogeneity analyses.

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Drawing upon data from Chinese A-share listed companies between 2010 to 2024, this study systematically examines the impact of data element utilization levels on corporate market power. Findings reveal that data element utilization significantly reduces corporate market power, a conclusion that holds true after controlling for endogeneity issues and undergoing multiple robustness tests. Mechanism analysis indicates that improvements in the utilization of data element utilization primarily reduce market power by reducing information barriers, enhancing management efficiency and strengthening innovation capabilities. Further heterogeneity analysis based on the TOE framework indicates that this effect is more pronounced when firms operate in high-tech industries, have executives with technical backgrounds, employ a high proportion of high-tech talent, and possess robust internal control systems and highly concentrated supply chains. Additionally, this effect is also more pronounced when firms are located in regions with strong intellectual property protection, strict environmental regulations, and high levels of digital economic development and marketization. This research provides theoretical and empirical foundations for understanding data elements' role in shaping fair competitive market environments, offering policy implications for advancing market-based data allocation and refining digital economy governance.

Summary

Main Finding

Using data on Chinese A‑share listed companies from 2010–2024, the study finds that higher levels of firm data‑element utilization significantly reduce corporate market power. This result is robust to endogeneity controls and multiple robustness checks.

Key Points

  • The negative effect of data utilization on market power is statistically significant and persists after addressing endogeneity and running robustness tests.
  • Mechanisms: data utilization lowers market power mainly by
    • reducing information barriers (improving market transparency and price discovery),
    • enhancing management efficiency (better decision‑making and operations),
    • strengthening innovation capabilities (faster product/process innovation).
  • Heterogeneity (TOE framework — Technology, Organization, Environment):
    • Technology/Organization: the effect is stronger in high‑tech industries, for firms whose executives have technical backgrounds, for firms with a higher share of high‑tech talent, and for firms with stronger internal controls.
    • Supply chain: the reduction in market power from data use is more pronounced in firms with highly concentrated supply chains.
    • Environment/Region: effects are larger in regions with stronger IP protection, stricter environmental regulation, higher digital economic development, and greater marketization.

Data & Methods

  • Data: Firm‑level panel of Chinese A‑share listed companies, 2010–2024.
  • Measurement: Firm data‑element utilization (an index/score constructed at the firm level) and firm market power (proxied with firm‑level market power indicators).
  • Empirical strategy: panel econometric analysis with controls; the paper addresses endogeneity concerns and applies multiple robustness tests. Mechanism identification uses mediation/causal pathway analyses; heterogeneity is explored via subgroup analyses guided by the TOE framework.

Implications for AI Economics

  • Data as a competitive equalizer: Effective utilization of data can reduce firm market power, implying that data use can promote competition rather than automatically entrench incumbents.
  • Antitrust and data policy: Competition policy should consider not only data concentration but also firms’ capacity to use data productively. Policies that lower barriers to data access and promote interoperable data markets could foster competition.
  • Data governance and IP balance: Strong IP protection and sound digital‑economy institutions amplify the pro‑competitive effects of data use; policymakers need to balance IP incentives with mechanisms that enable productive data reuse.
  • Firm strategy and AI investment: Firms investing in data capabilities (technical leadership, high‑tech talent, internal controls) are more able to translate data into competitive but less market‑power‑concentrating outcomes—highlighting the importance of complementary investments in human capital and governance.
  • Modeling and measurement in AI economics: Empirical and theoretical models of market power should treat data as an active production/input factor and explicitly model heterogeneity in data‑utilization capability across firms and regions.
  • Regional and sectoral policy targeting: Digital infrastructure, marketization, environmental regulation, and IP regimes condition how data affects market structure — suggesting targeted regional and sector policies to maximize the pro‑competitive benefits of data.

Assessment

Paper Typequasi_experimental Evidence Strengthmedium — The paper uses a long firm-level panel (2010–2024) and multiple robustness/heterogeneity and mediation tests, which supports the association and plausibility of causal pathways; however, the summary does not describe a clear exogenous source of variation (e.g., natural experiment or valid IV), leaving residual endogeneity/selection concerns. Methods Rigormedium — Strengths include longitudinal firm panel, fixed effects-style identification, multiple robustness checks, and explicit mechanism and heterogeneity exploration; weaknesses are the lack of a clearly described exogenous shock or validated instrument in the provided description and potential measurement issues with the firm-level data‑utilization index. SampleFirm-level panel of Chinese A‑share listed companies from 2010–2024; outcome is firm market power (proxied by firm-level market power indicators), key regressor is a constructed firm data‑element utilization index; analyses include control variables, firm and year variation, mediation/pathway tests, and subgroup analyses by industry, executive background, talent composition, supply-chain concentration, and regional institutional variables. Themesadoption governance IdentificationPanel econometric analysis using firm and year fixed effects, rich observable controls, lagged regressors and placebo/robustness checks; mechanisms explored via mediation/pathway analyses and subgroup heterogeneity (TOE) tests. No single clearly described exogenous shock or fully convincing instrument is reported in the supplied summary. GeneralizabilityRestricted to Chinese A‑share listed firms — likely large, publicly listed companies, so findings may not generalize to private firms or SMEs., China-specific institutional context (IP regimes, marketization, digital infrastructure) may limit applicability to other countries., Constructed index of data utilization may be context- or measurement-dependent and hard to replicate in different settings., Effects may differ outside the 2010–2024 digitalization period covered (historical or future shifts in AI/data technologies)., Remaining endogeneity or unobserved confounders could affect external validity of causal interpretation.

Claims (9)

ClaimDirectionOutcomeConfidence & EvidenceDetails
Higher firm-level data-element utilization significantly reduces corporate market power among Chinese A-share listed companies. Market Structure negative Corporate market power
Reading fidelity high
Study strength medium
not reported
0.48
The negative association between data-element utilization and corporate market power remains statistically significant after addressing endogeneity and conducting multiple robustness checks. Market Structure negative Corporate market power
Reading fidelity high
Study strength medium
not reported
0.48
Data-element utilization reduces corporate market power partly by reducing information barriers, improving market transparency, and enhancing price discovery. Market Structure negative Corporate market power through information transparency and price discovery
Reading fidelity high
Study strength medium
not reported
0.48
Data-element utilization reduces corporate market power partly by improving management efficiency and supporting better decision-making and operations. Market Structure negative Corporate market power through management efficiency
Reading fidelity high
Study strength medium
not reported
0.48
Data-element utilization reduces corporate market power partly by strengthening firms' innovation capabilities and accelerating product and process innovation. Market Structure negative Corporate market power through innovation capability
Reading fidelity high
Study strength medium
not reported
0.48
The reduction in corporate market power associated with data-element utilization is stronger in high-tech industries, among firms whose executives have technical backgrounds, among firms with a higher share of high-tech talent, and among firms with stronger internal controls. Market Structure negative Corporate market power
Reading fidelity high
Study strength medium
not reported
0.48
The reduction in corporate market power associated with data-element utilization is more pronounced among firms with highly concentrated supply chains. Market Structure negative Corporate market power
Reading fidelity high
Study strength medium
not reported
0.48
The reduction in corporate market power associated with data-element utilization is larger in regions with stronger intellectual-property protection, stricter environmental regulation, higher digital-economic development, and greater marketization. Market Structure negative Corporate market power
Reading fidelity high
Study strength medium
not reported
0.48
The study concludes that effective data utilization can act as a competitive equalizer by reducing firm market power rather than automatically entrenching incumbent firms. Market Structure negative Firm market power and competitive structure
Reading fidelity high
Study strength medium
not reported
0.48

Notes