Abstract:Since the mid-1990s, Chinese governments at all levels and various industries have always had a special preference for large enterprises. Enterprises will enter China’s top 500 and the world’s top 500 as their goal. This paper aims to provide a reasonable economic explanation for the Scale preference drive of Chinese enterprises. Based on the database of Chinese industrial enterprises from 1999 to 2013, this paper confirms the learning effect and learning expansion effect formed by Chinese industrial enterprises are the main sources of their productivity advantages. This learning effect is more prominent in technology-intensive, western regions, state-owned enterprises and large enterprises with long life. This paper holds that “scale preference” is an expedient and second-best choice for enterprises to take the initiative to participate in market competition in a specific historical development stage in order to cope with the current development difficulties, and a breakthrough measure and dominant strategy for Chinese industrial enterprises to build long-term competitive advantages. Through scale expansion,enterprises win a foothold in the fierce market competition, and then achieve the dynamic development, gradually take a path of steady development that suits itself, which is also a path of constant self-improvement and transformation from quantity to quality.