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In this paper, the performance of the network coded amplify-forward cooperative protocol is studied. The use of network coding can suppress the bandwidth resource consumed by relay transmission, and hence increase the spectral efficiency of cooperative diversity. A distributed strategy of relay selection is applied to the cooperative scheme, which can reduce system overhead and also facilitate the development of the explicit expressions of information metrics, such as outage probability and ergodic capacity. Both analytical and numerical results demonstrate that the proposed protocol can achieve large ergodic capacity and full diversity gain simultaneously.