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Inter-industry relatedness and industrial-policy efficiency: Evidence from China’s export processing zones

Author

Listed:
  • Zhao Chen

    (Fudan University [Shanghai])

  • Sandra Poncet

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique)

  • Ruixiang Xiong

    (Xiangtan University)

Abstract

In this paper, we evaluate whether the efficiency of industrial policies depends on the consistency of their focus with the local productive structure. We use sector-level data from Chinese manufacturing surveys over the 1998–2007 period to show that the efficiency of the export-promoting policies implemented in export processing zones depends on whether they target activities for which the necessary capabilities and resources are available. We find export benefits from the EPZ policy which are greater for sectors with denser links with the local productive structure. Our results suggest that industrial-policy effectiveness is magnified by pre-existing productive knowledge.

Suggested Citation

  • Zhao Chen & Sandra Poncet & Ruixiang Xiong, 2017. "Inter-industry relatedness and industrial-policy efficiency: Evidence from China’s export processing zones," PSE-Ecole d'économie de Paris (Postprint) halshs-01630385, HAL.
    • Handle: RePEc:hal:pseptp:halshs-01630385
    DOI: 10.1016/j.jce.2016.01.003
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    Keywords

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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