Industrial Policy Research Articles

PUBLIC POLICIES AND THEIR IMPACT ON ECONOMIC DEVELOPMENT: A SYSTEMATIC REVIEW

Purpose: The aim of this paper is to identify the impact of public policies on economic development through a systematic review method. Theoretical Framework: The paper emphasizes the role of decentralization in allowing governments to implement efficient public policies that drive economic development, referencing Kitchenham’s guidelines for systematic literature review. Design/Methodology/Approach: The study employed a Systematic Literature Review (SLR) based on 55 selected studies. Data were extracted and synthesized to answer 8 research questions related to the impact of public policies on economic sectors and development. Findings: The review identified that public policies significantly impact economic development, particularly in the industry and environment sectors. Countries like China are leading in policy application for growth. Decentralization enhances policy effectiveness by allowing local adaptation. However, gaps remain in understanding the influence of public policies in less-explored sectors, highlighting the need for further research. Research, Practical & Social Implications: The study suggests that public policies play a critical role in shaping economic development, particularly in sectors like industry and environmental policy. Future research should focus on extending these findings to other sectors. Originality/Value: This research adds to the growing body of knowledge by synthesizing existing studies and identifying key sectors and metrics for evaluating the impact of public policies on economic development.

Digital transformation, human capital upgrading, and enterprise ESG performance: Evidence from Chinese listed enterprises

Research background: With the rapid development of digital technologies such as artificial intelligence (AI), big data, cloud computing, and blockchain, the deep integration of digital technology and traditional industries offers unprecedented opportunities and has become an important technological force driving the development of enterprise environmental, social, and governance (ESG) performance. Digital transformation increases the complementarity between the production and operation processes of enterprises and highly skilled labour, specifically manifested in the adaptive change of the human capital structure of enterprises in labour relations. Meanwhile, transforming enterprises’ human capital structure also affects ESG performance. Purpose of the article: This study investigates the effects of digital transformation on enterprise ESG performance and its underlying mechanisms of human capital upgrading. First, it combines cutting-edge literature to analyse the theoretical mechanism between digital transformation, human capital upgrading, and enterprise ESG performance, revealing the internal driving factors and implementation paths for improving enterprise ESG performance. Second, we use the data of 3928 listed enterprises in the Shanghai and Shenzhen A-share markets from 2009–2022 to analyse the impact of digital transformation on enterprise ESG performance from the perspective of human capital upgrading as well as the mechanism by which digital transformation affects enterprise ESG performance through human capital upgrading. Third, we provide policy recommendations for optimising the labour structure and enhancing enterprise ESG performance from the perspective of optimising human capital and digital technology applications. Methods: Based on data from 3928 listed enterprises in Chinese A-share markets from 2009-2022, we investigate the effects of digital transformation on enterprise ESG performance and the mechanisms of human capital upgrading. The panel mediation effect model tests the relationships between digital transformation, human capital upgrading, and enterprise ESG performance. Findings & value added: In theory, digital transformation is beneficial for optimising human capital structure, accelerating green technological innovation, and improving management efficiency, thus improving enterprise ESG performance. Mechanism testing shows that digital transformation enhances enterprise ESG performance through human capital upgrading. Heterogeneity analysis shows that the impact of digital transformation on ESG performance is more significant in enterprises that are capital- and technical-intensive, and located in the eastern and central regions. This study examines the microeconomic consequences of digital transformation, contributing to a deeper understanding of the theoretical logic inherent in enterprises’ optimisation of their labour structure. It also provides empirical evidence and decision support for developing industrial talent policies.

Linking demand conditions to competitive advantage: the role of government support programs in the halal cosmetic and personal care industry

Purpose This study aims to examine the mediating role of government support programs in the halal cosmetics and personal care industry between local demand conditions and competitive advantage. Design/methodology/approach Data were collected from 96 companies in the cosmetics and personal care industry in Malaysia, and the analysis was conducted using the partial least squares structural equation modeling approach. Findings The results indicate that demand conditions do not have a direct effect on competitive advantage in the halal cosmetics and personal care industry. However, government support programs, specifically regulatory and innovation programs, play a crucial mediating role between demand conditions and competitive advantage. This highlights the importance of both regulatory and innovation programs in shaping the halal market ecosystem. Practical implications The halal industry policy should prioritize innovation and regulatory programs to ensure that nonfood halal products, including beauty products, are evaluated not only based on ingredient content but also on broader aspects such as product effectiveness, quality, safety and affordability. Originality/value This study offers a unique perspective by highlighting the often-overlooked role of government support programs as key drivers in shaping the halal market ecosystem and enhancing competition in the halal cosmetics and personal care industry. While the government’s role is frequently neglected in market dynamics, this research emphasizes how government intervention, when implemented through effective policy, can significantly contribute to industry growth and competitiveness.

The impact of foreign direct investments on the increase in the number of visitors in tourism - Case study Republic of Kosovo

Foreign Direct Investment (FDI) plays a significant role in the Republic of Kosovo's economy, namely in the tourist sector. The primary goal of this research is to examine the impact of FDI on the increase in the number of tourist visits (NTV), as well as the trend of NTV and government spending on recreation, culture, and religion in the Republic of Kosovo. The results demonstrate that NTV increased in Kosovo between 2008 and 2022, however this increase was not consistent. The most pronounced growth was in 2021 compared to 2020, at approximately 133%, while the most pronounced decline in NTV was in 2020 compared to 2019, at -46%. From 2008 to 2022, the FDI trend was the highest in 2022, when the value of FDI reached 778.2 million euros, while the government's expenditures in the fields of recreation, culture, and religion were the highest in 2021, at approximately 61 million euros. Empirical analysis indicates that FDI has positively impacted the expansion of NTV in Kosovo, with a β parameter of 0.41. The report suggests that state officials adopt more sustainable and effective policies that will result in higher FDI, government tourism spending, and NTV in Kosovo. A sustainable FDI policy for the tourism industry will have an impact not only on tourism, but also on other tourism-related businesses. Furthermore, a critical appraisal is required in Kosovo to improve tourism performance and regional economic development, among other things.

Research on Ecological Restoration Strategies for Abandoned Mines Based on Ecology-Oriented Development

The ecological restoration of abandoned mines poses a significant challenge within China’s broader efforts toward the protection and restoration of the nation’s ecosystems. Based on the ecology-oriented development (EOD) model, a differential game framework for the ecological restoration of abandoned mines was constructed in this study, involving both government and corporate entities as players. Our analysis focused on various factors, including investment levels in ecological restoration quality, the quality of ecological restoration itself, investment levels in environmentally sensitive industry development, the quality of environmentally sensitive industries, environmentally sensitive product pricing strategies, and profit dynamics for both players across four distinct modes. Our findings reveal several key insights. First, extending the government’s concession period incentivizes enterprises to increase investment in both the quality of ecological restoration of abandoned mines and the development of environmentally sensitive industries. Second, the government should prefer the cooperative mode to introduce social capital for the ecology-oriented development of abandoned mines. Third, in noncooperative mode, for technology-intensive industries, the government’s industrial support policy is more mutually beneficial; conversely, for labor-intensive industries, the ecological restoration compensation policy yields higher mutual gains. Lastly, differentiated incentive policies implemented by the government across various modes prompt the input of enterprises in ecological restoration quality and environmentally sensitive industry development. Based on these findings, we offer specific policy recommendations to guide governmental efforts in promoting EOD for the ecological restoration of abandoned mines. Funding: This work was supported by the Sichuan Office of Philosophy and Social Science [Grant SC22C004] and the National Social Science Fund of China [Grant 22XKS015].

An Evolutionary Game Analysis of China’s Power Battery Export Strategies Under Carbon Barriers

With the continuous evolution of international trade, the global market has been steadily expanding while also facing increasing challenges, particularly in relation to the introduction of environmental policies such as carbon barriers. Our research explores how China’s power battery manufacturers can adapt their export strategies to the EU’s carbon barrier policies. Additionally, we examine the roles of government regulations, research institutions, and manufacturers in either facilitating or hindering compliance with carbon reduction objectives. Using evolutionary game theory, we construct models involving government entities, manufacturers, and research institutions to systematically analyze market evolution, strategic interactions, and outcomes among these stakeholders. Our analysis focuses on understanding the competitive dynamics faced by exporting countries under stringent environmental policies and provides strategic insights to guide export strategies. Taking the EU’s carbon barrier policy as a case study, we explore Chinese battery manufacturers’ adaptive strategies and decision-making processes as they respond to shifting market demands and regulatory environments. The findings not only offer valuable insights into exporting countries but also provide policymakers with information on international trade and industrial policy design. Furthermore, we validate our model through numerical simulations and conduct sensitivity analyses on key parameters. The results underscore the importance of governmental adoption of punitive and incentive policies, revealing their substantial impact on stakeholder behavior. Additionally, the study highlights how participants’ pre-cooperation losses and post-cooperation gains influence participation rates and the speed at which stakeholder consensus is reached. By offering a novel approach with which to address carbon barrier challenges, this research contributes valuable perspectives on environmental regulations’ strategic and policy implications in global trade.

Location Preferences and Changes in Pollution-Intensive Firms from the Yangtze River Economic Belt, China

This study examined the location preferences and changes in pollution-intensive firms by analyzing the spatiotemporal distribution and drivers in the Yangtze River Economic Belt, a transitional manufacturing region in China. To analyze the distribution of firms under natural growth conditions prior to the implementation of the national “Great Protection of the Yangtze River” policy in 2016, this study utilized data on newly expanded industrial land use from 2007 to 2016. The results indicated that new pollution-intensive firms predominantly focused on water pollution, occupying over 40% of the total area annually. The new pollution-intensive firms preferred the geographic agglomeration siting strategy, mostly along the Yangtze River or in urban agglomerations, while gradually moving westward. The total area and number of new pollution-intensive firms in the Yangtze River Economic Belt showed an overall trend of “inverted U-shaped” variation during the study period, and the average size of the pollution-intensive firms gradually decreased. GeoDetector analysis revealed that geographical factors have always been significant. Local economic factors attracted new pollution-intensive firms, but later in the study period, these factors showed some inhibitory effect on the increase in pollution-intensive firms in the lower reaches. Government intervention worked less effectively but was significantly enhanced after interaction with other factors. Finally, the results suggested that local governments should build a stronger synergy between industrial land policies and environmental regulations to ensure sustainable growth and rational allocation of pollution-intensive firms.

Generation Z’s meaning of hospitality from a gender perspective

ABSTRACT The concept of hospitality encompasses a range of interactions between hosts and guests, grounded in sociocultural norms and practices. To look into hospitality from a different sociocultural viewpoint, this paper explores how Generation Z understand and interpret “hospitality” through the lens of gender. Using semi-structured interviews, it reveals that females link hospitality to customer service and host-guest relationships, while males emphasiseemphasize commercial elements, such as food and payment. These insights underscore the complex interplay between gender disparities and hospitality perceptions. The research highlights the importance of implementing industry policies and training that address gender disparities and encourage inclusivity. For broader relevance, future research should encompass diverse demographics and assess the influence of temporal and regional factors on these perceptions.

Exploring carbon emission effects of national-level industrial park policies on cities in China

Serving as the backbone of economic development, industrial parks have strong implications for reducing carbon emissions in China under the “carbon peak and carbon neutrality” background. This study explores the carbon emission reduction effects of three different types of national-level industrial parks on prefectural-level cities in China, including economic and technological development zones (ETDZs), eco-industrial demonstration parks (EIDPs), and low-carbon industrial parks (LCIPs). Data on 204 prefectural-level cities over the period of 1999 to 2019 were examined by using the difference-in-differences method and the mediating effect model. The study revealed that (1) the three types of industrial parks significantly reduced the intensity of city carbon emissions by 1,155, 395, and 450 tons per million CNY, respectively; (2) There existed lag effects of 7 years for the ETDZ and 3 years for the EIDP; (3) Industrial structure exhibited significant mediating effects, with ETDZ and EIDP reducing city carbon emission intensity by 58 and 56 tons per million CNY, respectively; (4) Strong heterogeneity in the effects was found, arising from the differences in geographical location, resources endowment, and amount of industrial parks; and (5) ETDZ and EIDP reduced the carbon emission intensity of neighboring cities by 174 and 144 tons per million CNY, respectively, while LCIP increased that by 686 tons per million CNY. The major contribution of this study is analyzing the city-level impacts of ETDZ, EIDP, and LCIP, three different types of national industrial park policies with different implementation periods, regional distributions, and policy focuses. This not only fills a gap in the analyses of ETDZ and LCIP policies in this area of research, but also draws analogies and contrasts between the effects of the three different policies. This study suggests that the stability and long-term nature of industrial park policies be maintained and further transformation and upgrading of industrial structure be attained. Additionally, intercity coordination could be introduced or enhanced.

Analysis of How Industrial Policy and Competition Policy Promote the Development of Cross-border E-commerce EnterprisesTake the Unicorn Company Shein as an Example

Abstract: Since the 20th National Congress of the Communist Party of China, the central government has proposed to realize the economic development model of domestic and international dual circulation. The development of China's cross-border e-commerce industry is in the ascendant, and the unicorn company Shein has achieved successive revenue achievements in recent years. However, there are still problems with the external environment, which is dominated by industrial policy and competition policy. This paper analyzes the current external environment of China's cross-border e-commerce, analyzes the relationship between China's industrial policy and competition policy, and enlightens the competition policy adjustment of China's cross-border e-commerce industry through foreign experience.

Spatial Transformation of the Higher Education System: Threats and Challenges to Single-Industry Towns

The article proposes an approach to analyzing the spatial organization of the Russian higher education system. Methodologically, the study relies on the theory of structural functionalism. In order to solve the stated research problems, the authors used comparative historical and economic-statistical analyses, as well as the quick survey method. The study characterizes the specifics of the Russian system of single-industry towns and justifies the role of a single-industry town as an integral and essential element of the settlement system. The study also reveals structural and functional changes inthe Russian system of higher education that significantly limit the possibility of preserving universities and/or their branches in single-industry towns. It was proved that the functions of higher education institutions in a single-industry town are multifaceted, complex in nature, and not limited only to the sphere of education. In spite of this, the higher education system in single-industry towns downsizes at a significantly faster rate than in the country as a whole. The performed analysis shows that the persisting trend toward increasing territorial concentration in the country’s system of higher education can create a set of negative effects that have a disruptive impact on the national settlement system, the continuity of complex value chains, and the social stability of local communities in single-industry towns. A conclusion is made about the need for comprehensive solutions regarding the development of higher education in single-industry towns that combine both national mechanisms for achieving national goals and the toolkits of regional, industrial, educational, and corporate policies.

Industrial policy and State-business relations in Brazil: the governance of productive development policies

This article deals with the new productive development policies in countries that, like the case of Brazil, have political systems permeable to business elite particularistic interests. In this regard, the analysis of industrial policies is important because public-private coordination use to be needed. The establishment of a new cycle of industrial policies between 2003 and 2016 was accompanied by the construction of a governance structure to increase coordination with companies, supposedly in more innovative and competitive sectors. However, using historical institutional analysis, it is intended to demonstrate that these governance structures, as formal institutions, were supplanted in practice by the traditional rules of the game in the relationship between the State and businessmen. These rules of the game tend to promote enterprises and sectors that are already well established. In this way, policies that were designed to favor a structural transformation, ended up having a protectionist and defensive bias of traditional industries.

The new geopolitics of EU cybersecurity: security, economy and sovereignty

Abstract The European Union (EU) is currently experiencing significant geopolitical shifts and is concerned that its dependence on externally produced or foreign-owned technologies risks its strategic autonomy, with implications for its security and economy. In response, it has placed sovereignty at the forefront of its agenda and at the centre of its relations with the world. Academic literature has so far paid limited attention to understanding the interactions between geopolitics, perceptions of technological dependence, and the impact on policy governance in cybersecurity. Bearing this gap in mind, the article asks how the EU's discourse of sovereignty and reducing external dependencies is shaping its approach to cybersecurity. Applying regulatory mercantilism and policy analysis to three case-studies—focusing on control of semiconductors, data server location, and cybersecurity certification— the article finds that the EU's depiction of its cybersecurity as impacted by dependence on externally manufactured products resulted in the merging of security and economic rationales. This has translated into efforts for greater control, either through promoting production within the European physical space through security-influenced industrial policies or—when this is not possible—by exerting regulatory influence beyond Europe's borders. Where globalization is believed to have failed, regulatory mercantilism becomes more likely as a policy approach.

The rise of Chinese animation: policy evolution and industry development since the 1990s

ABSTRACT This paper examines the evolution of China’s animation industry policies from 1990 to the present and their substantial impact on industry development. The study identifies four main stages: the exploratory phase in the 1990s, the boom period from 2000 to 2011, the transition period from 2012 to 2016, and the rational phase from 2017 onwards. Each stage had distinct policy focuses, collectively driving a shift in Chinese animation from simple quantity growth to a more sustainable, quality-oriented development. Various supportive measures, including market access management, fiscal and tax incentives, and industry fund support, provided critical market space and financial resources, fostering technological innovation, talent cultivation, and broadening international collaborations. Despite notable achievements, the industry still grapples with challenges like an incomplete industrial chain, dependence on government support, and gaps in original content creation. This paper provides essential references for optimizing future policies, offering valuable insights for the animation industry’s development in other countries as well.

Artificial intelligence as planetary assemblages of coloniality: The new power architecture driving a tiered global data economy

We present a framework for viewing artificial intelligence (AI) as planetary assemblages of coloniality that reproduce dependencies in how it co-constitutes and structures a tiered global data economy. We use assemblage thinking to map the coloniality of power to demonstrate how AI stratifies across knowledge, geographies, and bodies to influence development and economic trajectories, impact workers, reframe domestic industrial policies, and reconfigure the international political economy. Our post-colonial framework unpacks AI through its (1) global, (2) meso, and (3) local layers, and further dissects how these layers are vertically integrated, each with its horizontal dependencies. At (1) the global layer of international political economy maps a new digital bipolarity expressing Sino and American global digital corporations’ strategic and dominant positions in shaping a tiered global data economy. Then, at (2) the meso layer, we have a mosaic of domestic industrial policies that fund, frame markets, and develop AI talent across industries, sectors, and organizations to competitively integrate into AI value chains. Finally, incorporating into these are (3) the localized labor processes and tasks, where workers and users enact various AI-mediated tasks and practices driving further value extraction. We traced how AI is an interlaced system of power that reshapes knowledge, geographies, and bodies into dependencies that reinforce stratifications in developing underdevelopment. This commentary maps the current digital realities by laying out an uneven techno-geoeconomic power architecture driving a tiered global data economy and opening new research avenues to examine AI as planetary assemblages of coloniality.

Industrial Policy: Lessons from Shipbuilding

Industrial policy has been used throughout history in some form or other by most countries. Yet, it remains one of the most contentious issues among policy makers and economists alike. In part, this is because the empirical evidence on whether and how it should be implemented remains slim. Scant data on government subsidies, conflicting theoretical arguments, and the need to account for governments’ short and long-run objectives, render research particularly challenging. In this article, we outline a theory-based empirical methodology that relies on estimating an industry equilibrium model to measure hidden subsidies, assess their welfare consequences for the domestic and global economy, as well as evaluate the effectiveness of different policy designs. We illustrate this approach using the global shipbuilding industry as a prototypical example of an industry targeted by industrial policy, especially in periods of heavy industrialization. Just in the past century, Europe, followed by Japan, then South Korea, and more recently China, developed national shipbuilding programs to propel their firms to global leaders. Success has been mixed across programs, certainly by welfare metrics, and sometimes even by growth metrics. We use our methodology on China to dissect the impact of such programs, what made them more or less successful, and how we can justify why governments have chosen shipbuilding as a target.

Export-Led Industrial Policy for Developing Countries: Is There a Way to Pick Winners?

Industrial policy prioritizes growth in specific sectors. Yet there is little agreement about how to target sectors in practice, and many argue that governments cannot pick winners. This essay observes that governments can and do identify tradable sectors where public inputs accelerate growth and generate economic benefits. These strategic sectors are: (1) those that are relatively more productive, and (2) those that are relatively less productive but require technology like the country’s existing technology and have rapidly growing markets and limited international competition. Since developing countries are productive in fewer sectors and have less technology, targeting can be more valuable for them. Export promotion agencies are institutions that have demonstrated effectiveness in coordinating public inputs to grow these sectors. Compared to protectionism, this alternative approach to ‘industrial policy’ is cheaper, less susceptible to capture by unproductive firms, and permissible under the rules of international trade agreements. Many countries’ development strategies adopt this approach.

The Political Economy of Industrial Policy

We examine the ways in which political realities shape industrial policy through the lens of modern political economy. We consider two broad “governance constraints”: (1) the political forces that shape how industrial policy is chosen and (2) the ways in which state capacity affects implementation. The framework of modern political economy suggests that government failure is not a necessary feature of industrial policy; rather, it is more likely to fail when countries pursue industrial policies beyond their governance capacity constraints. As such, our political economy of industrial policy is not fatalist. Instead, it enables policymakers to constructively confront challenges.

Article: Green Regionalism: US Strategies to Ensure Secure and Reliable Supplies of Critical Minerals

Critical Minerals are essential constituents for numerous modern technologies from computers, and modern cars to household appliances. Most critical minerals are also key inputs in technologies that are crucial for clean energy transitions such as batteries, electric vehicles (EV), wind turbines, solar panels etc. Global trends indicate that the race for ensuring a secure and reliable supply of critical minerals is being furthered through industrial policy, domestic regulations as well as international economic law instruments. More recently these three aspects have been characterized by increasing securitization as seen through attempts to friendshore and reshore supply chains and capacities. This paper peruses the recent Critical Material Transparency and Reporting of Advanced Clean Energy (Critical Material TRACE) Bill which focuses on implementing a digital identifier system for advanced energy systems including batteries and battery components. The paper looks at the bill in connection with other initiatives aimed at creating United State (US) led critical mineral value chains. These include industrial policy measures including the Inflation Reduction Act (IRA) as well as international initiatives such as the Mineral Security Partnership (MSP) and the Indo-Pacific Economic Framework (IPEF) inter alia. In our examination, the focus is on analysing the progress made under the US-led MSP and the potential coverage and implication of the Critical Material TRACE Bill. We also examine if such steps by the US further promote green regionalism or are necessary to break the dominance of a few countries (mainly China) in leading the critical minerals supply chain.

Semiconductors and Modern Industrial Policy

Semiconductors have emerged as a headline in the resurgence of modern industrial policy. This paper explores the political economic history of the sector, the changing nature of the semiconductor supply chain, and the new sources of concern that have motivated the most recent turn to government intervention. It also explores details of that turn to industrial policy by the United States, China, Japan, Europe, South Korea, and Taiwan. Modern industrial policy for semiconductors has included not only subsidies for manufacturing, but also new import tariffs, export controls, foreign investment screening, and antitrust actions.