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Does "Made in China 2025" Work for China? Evidence from Chinese Listed Firms

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  • Lee G. Branstetter
  • Guangwei Li

Abstract

Rising concern over the impact of Chinese industrial policy has led to severe trade tensions between China and some of its major trading partners. In recent years, foreign criticism has increasingly focused on the so-called "Made in China 2025" initiative. In this paper, we use information extracted from Chinese listed firms' financial reports and a difference-in-differences approach to examine how the "Made in China 2025" policy initiative has impacted firms' receipt of subsidies, R&D expenditure, patenting, productivity, and profitability. We find that while more innovation promotion subsidies seem to flow into the listed firms targeted by the policy, we see little statistical evidence of productivity improvement or increases in R&D expenditure, patenting and profitability. This paper suggests that the “Made in China 2025” initiative may have not yet achieved its target goals.

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  • Lee G. Branstetter & Guangwei Li, 2022. "Does "Made in China 2025" Work for China? Evidence from Chinese Listed Firms," NBER Working Papers 30676, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:30676
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    More about this item

    JEL classification:

    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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