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The determinants and effectiveness of industrial policy in china: A study based on Five-Year Plans

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  • Wu, Yiyun
  • Zhu, Xiwei
  • Groenewold, Nicolaas

Abstract

This paper examines industrial policy in China over the period of the 9th - 12th Five-Year Plans (FYPs). Based on China's national and provincial FYPs and data disaggregated to the four-digit manufacturing sector level, it finds that the central government's preferences act as a key determinant of the provincial FYPs. It also shows that policy significantly improves output while it is in effect but there is no evidence of a beneficial effect beyond the end of the particular FYP. The results are consistently robust across a number of tests.

Suggested Citation

  • Wu, Yiyun & Zhu, Xiwei & Groenewold, Nicolaas, 2019. "The determinants and effectiveness of industrial policy in china: A study based on Five-Year Plans," China Economic Review, Elsevier, vol. 53(C), pages 225-242.
  • Handle: RePEc:eee:chieco:v:53:y:2019:i:c:p:225-242
    DOI: 10.1016/j.chieco.2018.09.010
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