Ending Rat-Race Competition in Corporate Development: The Role of Trial-and-Error Costs and Institutional Flexibility

DOI

10.2991/978-94-6239-774-3_4How to use a DOI?

Keywords

Rat-Race Competition; Corporate Innovation; TVP-VAR; Corporate Development

Abstract

With the deepening of reform and opening-up, China’s domestic economy has evolved into an extraordinarily complex and diverse landscape, where social issues stemming from rat-race competition have become particularly pronounced. This paper utilizes questionnaire data from Chinese A-share listed companies and data from the National Bureau of Statistics to construct an empirical model, aiming to explore how to resolve the predicament of “rat-race competition” faced by Chinese enterprises during the phase of “stock competition” in the economy. The study reveals that the underlying cause of rat-race competition is not merely resource scarcity but rather the high cost of trial and error resulting from a rigid institutional environment. When regulatory frameworks become excessively stringent and detailed, the potential costs of failure associated with innovative exploration are elevated to unbearable levels, compelling rational decision-makers to forego high-risk, high-reward pioneering innovations in favor of non-productive, hyper-intensified internal competition within existing rules. The core theoretical contribution of this paper lies in constructing an integrated analytical framework that connects macro-level institutional environments with micro-level corporate behaviors.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Tianyu Wang
PY  - 2026
DA  - 2026/09/11
TI  - Ending Rat-Race Competition in Corporate Development: The Role of Trial-and-Error Costs and Institutional Flexibility
BT  - Proceedings of the 2026 5th International Conference on Mathematical Statistics and Economic Analysis (MSEA 2026
PB  - Atlantis Press
SP  - 28
EP  - 43
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-774-3_4
DO  - 10.2991/978-94-6239-774-3_4
ID  - Wang2026
ER  -