Policy and misallocation: Evidence from Chinese firm-level data

作者：Guowen Chen, Ana María Herrera, Steven Lugauer · 发表于：European Economic Review · 年份：2022 · DOI：10.1016/j.euroecorev.2022.104260 · 被引用次数：37 · 研究领域：Global trade and economics、International Business and FDI、Firm Innovation and Growth

Using a rich dataset of Chinese firms, we investigate the effect of industrial policies on resource misallocation. Our difference-in-difference model estimates provide evidence that government policies increased the dispersion of revenue productivity across firms in four-digit industries targeted for support relative to other industries, suggesting a negative impact on aggregate TFP. Estimates of a changes-in-changes model reveal that the policies had a heterogeneous impact across the productivity distribution of firms in supported industries. Furthermore, we show that the heightened misallocation is related to the way in which the Chinese government doled out support through subsidies for a subset of firms.