Expanded-Reproduction Blockade and Involutionary Price Competition: Implications for Corporate Sustainability in Chinese A-Share Listed Firms

Unsustainable price competition is relevant to corporate sustainability because persistent margin erosion and weak cash recovery may constrain firms’ capacity for long-term value creation. This study examines whether an expanded-reproduction blockade—a mismatch between productive commitments, demand absorption, value realization, and monetary recovery—is associated with more severe involutionary price competition. Using 41,942 firm-year observations for non-financial Chinese A-share listed firms from 2010 to 2024, this study constructs a six-indicator entropy-weighted index covering productive-capital occupation, additional-capital investment, and sales absorption/value-realization pressure. The blockade index is positively associated with price-war-type involution, measured by the negative net-profit margin. The result remains robust to alternative measurement, sample restrictions, high-dimensional fixed effects, lagged specifications, propensity-score matching, and instrumental-variable estimation. Common-sample channel tests indicate that blockade pressure is linked to commodity-capital impairment, deficient customer advance-payment support, and short-term cash-flow pressure. The association is stronger among non-state-owned, less financially constrained, small and medium-sized, and manufacturing firms, but weaker when city or industry demand grows faster. The findings directly concern the relationship between expanded-reproduction blockade and price-war-type involution and, more broadly, provide a strategic perspective on corporate sustainability by highlighting how disrupted alignment among productive investment, market realization, and cash recovery may bear on sustainable competition and long-term value creation.