Industrial Policy Implementation: Empirical Evidence from China's Shipbuilding Industry

• 成果类型: Article; Early Access
• 署名作者: Barwick, Panle Jia; Kalouptsidi, Myrto; Zahur, Nahim Bin
• 署名单位: National Bureau of Economic Research; University of Wisconsin System; University of Wisconsin Madison; Center for Economic & Policy Research (CEPR); Harvard University; National Bureau of Economic Research; Queens University - Canada
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdaf011
• 发表日期: 2025
• 关键词: research-and-development; infant-industry; economic-development; fiscal incentives; dynamic-models; welfare costs; Market entry; TRADE; INVESTMENT; equilibrium

摘要

Industrial policies are widely used across the world. In practice, designing and implementing these policies is a complicated task. In this paper, we assess the long-term performance of different industrial policy instruments, which include production subsidies, investment subsidies, entry subsidies, and consolidation policies. To do so, we examine a recent industrial policy in China aiming to propel the country's shipbuilding industry to the largest globally. Using firm-level data from 1998 to 2014 and a dynamic model of firm entry, exit, investment, and production, we find that (i) the policy boosted China's domestic investment, entry, and international market share dramatically, but delivered low returns and led to fragmentation, idle capacity, as well as depressed world ship prices; (ii) the effectiveness of different policy instruments is mixed: production and investment subsidies can be justified by market share considerations, while entry subsidies are wasteful; (iii) counter-cyclical policies, firm-targeting, and shortening the intervention horizon can substantially reduce distortions. Our results highlight the critical role of firm heterogeneity, business cycles, and firms' cost structure in policy design. Finally, when exploring potential rationales, we find support for nonclassical considerations, such as reducing freight rates to boost Chinese trade.