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Industrial policy, structural transformation and economic growth: evidence from China

Author

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  • Jinran Chen

    (Renmin University of China)

  • Lijuan Xie

    (Renmin University of China)

Abstract

Industrial policy is an important means for governments to promote industrial development and accelerate economic growth. This paper mainly uses the Chinese Law and Regulation Database as the source of the relevant laws and regulations of China’s industrial policies from 2003 to 2015. On this basis, it empirically examines the impact of industrial policies on economic growth. The study finds that China’s industrial policy has significant positive effects on economic growth and that industrial structure rationalization is an important channel of industrial policy to improve economic growth. The findings are also valid under a series of robustness tests and endogenous corrections. The results of heterogeneity tests confirm that there are heterogeneous effects pertaining to industrial policy on economic growth among different sub-regional areas, administrative levels, industrial development stages, and industrial policy types. Overall, this paper supports the hypothesis that industrial policy has positive effects on economic growth and, accordingly, provides a basis for industrial policy implementation.

Suggested Citation

  • Jinran Chen & Lijuan Xie, 2019. "Industrial policy, structural transformation and economic growth: evidence from China," Frontiers of Business Research in China, Springer, vol. 13(1), pages 1-19, December.
    • Handle: RePEc:spr:fobric:v:13:y:2019:i:1:d:10.1186_s11782-019-0065-y
    DOI: 10.1186/s11782-019-0065-y
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    6. Emilia Landa Shikomba & Elizabeth Elias & Sirorat Ruttanawijit, 2021. "Industry Policy Effects On Namibia'S Economic Growth," Economic Review: Journal of Economics and Business, University of Tuzla, Faculty of Economics, vol. 19(1), pages 13-22, May.

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