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Industrial policy for growth

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  • Farla, Kristine

    (UNU-MERIT / MGSOG, Maastricht University)

Abstract

This study distinguishes between industrial policy that stimulates incumbent industry development, `pro-business policy', and industrial policy that promotes the development of free markets, `pro-market policy'. We find that there is a positive relation between the level of countries' implementation of these policies. However, we find opposite effects of pro-business and pro-market policies when estimating the policy effect on growth and income level. Pro-business policy has a positive effect on economic development, and pro-market policy has a negative effect on economic development.

Suggested Citation

  • Farla, Kristine, 2012. "Industrial policy for growth," MERIT Working Papers 2012-039, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2012039
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    File URL: https://www.merit.unu.edu/publications/wppdf/2012/wp2012-039.pdf
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    References listed on IDEAS

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    Cited by:

    1. Michael Peneder, 2017. "Competitiveness and industrial policy: from rationalities of failure towards the ability to evolve," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 41(3), pages 829-858.
    2. Klaus S. Friesenbichler & Michael Peneder, 2016. "Innovation, Competition and Productivity. Firm Level Evidence for Eastern Europe and Central Asia," WIFO Working Papers 516, WIFO.
    3. Klaus Friesenbichler & Michael Peneder, 2016. "Innovation, competition and productivity," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 24(3), pages 535-580, July.
    4. Ruiguang Ma & Jiangbin Yin & Xiaoyan Huang, 2023. "Effect of the Strategic Emerging Industry Support Program on Corporate Innovation among Listed Companies in China," Sustainability, MDPI, vol. 15(24), pages 1-18, December.
    5. Michael Peneder & Gerhard Streicher, 2016. "De- versus Re-industrialisation: Is Structural Change Reversible?," WIFO Working Papers 506, WIFO.
    6. dos Santos Alves, Camila Elisa & Belarmino, Luiz Clovis & Padula, Antonio Domingos, 2017. "Feedstock diversification for biodiesel production in Brazil: Using the Policy Analysis Matrix (PAM) to evaluate the impact of the PNPB and the economic competitiveness of alternative oilseeds," Energy Policy, Elsevier, vol. 109(C), pages 297-309.
    7. Zewdie Habte Shikur, 2020. "Industrial policy measure and economic structure in Ethiopia: the case of Oromia region," International Journal of Economic Policy Studies, Springer, vol. 14(1), pages 255-274, February.

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    More about this item

    Keywords

    Industrial Policy; Industrial Development; Economic Development; Economic Growth;
    All these keywords.

    JEL classification:

    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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