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

Yiyun Wu, Xiwei Zhu, Nicolaas Groenewold

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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.

Original languageEnglish
Pages (from-to)225-242
Number of pages18
JournalChina Economic Review
Volume53
DOIs
Publication statusPublished - Feb 2019

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