How do policies take effect in the development of the urban mining industry? A local capability perspective: Evidence from Miluo, China (2000–2017)

Abstract

Abstract Urban mining is emerging as part of the process of the acceleration of industrialization and urbanization in China. The central government and local governments jointly promote the development of the urban mining industry. However, the existing literature mainly focuses on the current situation and the evaluation of the central government's policies and ignores the mechanism of local government industrial policies under the imperfect institutional environment in China. This paper selects the case study of Miluo city, which was included in one of China's first batches of urban mining demonstration bases, and it explores the evolution of local government industrial policies and the mechanism of how policies take effect in the development of the urban mining industry. The current research finds that (1) based on the creative implementation of central government industrial policies, the local government gradually cultivates the urban mining industry starting from collection and continuing through the evolution of the policy logic of “functional preferential policies → selective preferential policies → balanced policies” and the evolution of the government's role. (2) The urban mining industrial policies construct competitive advantages of industry by affecting the construction process of local capabilities. The policy effecting mechanism includes two pathways, namely, the direct interaction between government and enterprises, and the indirect interaction through intermediaries who connect the stakeholders and provide professional services. This paper contributes to the development of theories about the evolution of urban mining industrial policies and provides a new explanation for the local government's role in policies from the perspective of local capability theory.