Few empirical studies directly evaluate the welfare consequences of industrial policy. In this working paper by the National Bureau of Economic Research, Panle Jia Barwick, Myrto Kalouptsidi, and Nahim Bin Zahur examine China’s industrial policy that seeks to propel the PRC’s shipbuilding industry to the largest globally. Using comprehensive data on shipyards worldwide and a dynamic model of firm entry, exit, investment, and production, they examine the welfare consequences of industry policy, focusing on three questions: How has China’s industrial policy shaped its domestic and the global industry; what are the welfare consequences of this policy; and what is the relative efficacy of policy instruments such as production subsidies, investment subsidies, entry subsidies, and consolidation?
https://www.nber.org/papers/w26075.pdf

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