Business

How does industrial policy experimentation influence innovation performance? A case of Made in China 2025

K. Chen, Q. Meng, et al.

Discover how the 'Made in China 2025' policy is revolutionizing firm innovation in pilot cities across China! Conducted by Kejing Chen, Qiaoshuang Meng, Yutao Sun, and Qingqing Wan, this study uncovers significant gains in invention patents driven by local government initiatives, including tax incentives and academic collaborations. Dive in to learn more!

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Abstract

This study investigates the impact of Made in China 2025 (MIC 2025), a Chinese industrial policy implemented through policy experimentation in pilot cities, on firm innovation. Using a quasi-natural experiment design and data from Chinese listed manufacturing firms (2012-2022), the study finds that firms located in MIC 2025 pilot cities exhibit enhanced innovation performance, particularly in terms of invention patents. The mechanism analysis reveals that this effect is driven by tax incentives, public subsidies, convenient financing, academic collaboration, and talent incentives offered by local governments. The study highlights the importance of central-local government interactions and place-based policy experimentation in successful industrial policy implementation.

Publisher

Humanities and Social Sciences Communications

Published On

Jan 03, 2024

Authors

Kejing Chen, Qiaoshuang Meng, Yutao Sun, Qingqing Wan

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