Economic regulations of coal enterprises' scale expansion in China

Since 2012, coal enterprises of China facing grim situation. Sluggish economic growth affects market demand of coal production. Environment issues, like high carbon emission and global warming problems further restraint coal consumption. After a period of high speed development, China's coal enterprises' scale expansions have suffered much economic regulations. This paper analyzed these economic regulation factors under the framework of scale effect theory. There are several factors will influent the scale expansion of coal companies, including transaction cost, management cost, total capital, and etc. This paper built a regression model of panel data to test the influence of these factors with the data of 23 large-scale coal corporations since 2007-2014. The regression result of fixed effect model showed that market competitiveness, regional economic growth, total capital, transaction cost, all have positive effect on scale expansion. The effect of labor force is negative for scale expansion. After a decade of fasting expansion, the effects of management cost and investment in fixed assets are not significant any more in the study period.