Industrial policy intensity, technological change, and productivity growth: Evidence from China

China has employed various industrial policies and science & technology (S&T) policies in its effort of catching up with the world technology frontier. This paper evaluates the effect of China's industrial policies and S&T policies with a newly constructed measurement of policy intensity and a national database of firm surveys. We argue that whether China's industrial policies and S&T policies contribute to productivity growth in an industry is conditioned by the relative development stage of that industry to that of the world frontier. Specifically, we argue that China's industrial policies and S&T policies contribute to greater productivity growth in globally emerging high-tech industries than in domestically catching-up and domestically mature industries. We then provide empirical evidence for our hypotheses. Our study identifies a new driver behind China's economic success in the past decades.