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The Matrix Approach to Industrial Policy

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  • Karl Aiginger
  • Susanne Sieber
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    Abstract

    The objective of this paper is to analyse the development of industrial policy in the European Union. The changing concepts and rationale for industrial policy are reported with reference to the treaties and communications of the European Commission. Industrial policy has followed the course of these changes, although in reality, the practical changes have occurred at a slower and less radical pace than the changes in philosophy. A new paradigm of industrial policy has recently been developed by the European Commission in a document that first calls for measures improving the competitiveness in all sectors in terms of rather broad measures, and subsequently acknowledges sector differences in the impact of these measures, calling for complementary sector-specific measures. We label this new paradigm the 'matrix approach' to industrial policy, because it combines horizontal and vertical measures. On the empirical level, we see a divide between countries practising a future-oriented approach emphasising innovation and knowledge, and countries that take a more defensive stance, with higher subsidies and a greater amount of regulation. The countries pursuing the more future-oriented approach achieve higher shares of technology-driven and skill-intensive industries and excel with respect to the goals of the Lisbon strategy.

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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal International Review of Applied Economics.

    Volume (Year): 20 (2006)
    Issue (Month): 5 ()
    Pages: 573-601

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    Handle: RePEc:taf:irapec:v:20:y:2006:i:5:p:573-601

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    Related research

    Keywords: Industrial policy; Lisbon strategy; horizontal vs vertical policies; framework conditions; competitiveness; innovation;

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    Cited by:
    1. Karl Aiginger, 2007. "Industrial Policy: Past, Diversity, Future; Introduction to the Special Issue on the Future of Industrial Policy," Journal of Industry, Competition and Trade, Springer, vol. 7(3), pages 143-146, December.
    2. Neil Foster-McGregor & Mario Holzner & Michael Landesmann & Johannes Pöschl & Robert Stehrer & Roman Stöllinger, 2013. "A ‘Manufacturing Imperative’ in the EU – Europe's Position in Global Manufacturing and the Role of Industrial Policy," wiiw Research Reports 391, The Vienna Institute for International Economic Studies, wiiw.
    3. Karl Aiginger, 2012. "A Systemic Industrial Policy to Pave a New Growth Path for Europe," WIFO Working Papers 421, WIFO.
    4. Farla, Kristine, 2012. "Industrial policy for growth," MERIT Working Papers 039, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. Christian Grabas & Alexander Nützenadel, 2013. "Industrial Policies in Europe in Historical Perspective," WWWforEurope Working Papers series 15, WWWforEurope.
    6. Karl Aiginger, 2013. "A new strategy for the European periphery," WWWforEurope Policy Paper series 1, WWWforEurope.
    7. Petraglia C. & Scalera D., 2012. "Le politiche per il Mezzogiorno negli anni della crisi (2007-2012)," Rivista economica del Mezzogiorno, Società editrice il Mulino, issue 4, pages 1023-1048.
    8. Finbarr Livesey, 2012. "Rationales for Industrial Policy Based on Industry Maturity," Journal of Industry, Competition and Trade, Springer, vol. 12(3), pages 349-363, September.
    9. Karl Aiginger, 2013. "The "greening" of industrial policy, headwinds and a possible symbiosis," WWWforEurope Policy Paper series 3, WWWforEurope.
    10. Karl Aiginger & Susanne Sieber, 2009. "Industrial Policy in Austria: From Selective Intervention to a More Systematic Approach," WIFO Working Papers 337, WIFO.
    11. Heinz Zourek, 2007. "The European Commission’s New Industrial Policy in an Integrating and Globalizing World," Journal of Industry, Competition and Trade, Springer, vol. 7(3), pages 285-295, December.
    12. Karl Aiginger, 2013. "A Southern Europe strategy based on vision and industrial policy," EKONOMIAZ, Gobierno Vasco / Eusko Jaurlaritza / Basque Government, vol. 82(01), pages 127-168.

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