Industrial Policy Cuts Two Ways: Evidence from Cotton-Spinning Firms in Japan, 1956–1964
利用日本棉纺企业数据，发现产业政策虽稳定了市场结构，但限制了资源从低生产率大企业向高生产率小企业转移，导致行业生产率下降。
A number of studies have revealed a negative effect of industrial policy on productivity growth. Is this because industrial policy fails to control the activities of firms or because it can effectively control them? This paper attempts to answer these questions, using firm-level data from the cotton-spinning industry in Japan for the period 1956–64. We determine that industrial policy cut two ways during this period. Industrial policy effectively controlled the output of cotton-spinning firms, which contributed to the establishment of a stable market structure during the period. On the flip side, such policy constrained the reallocation of resources from less productive large firms to more productive small firms. Combined with the negative productivity growth in large firms during this period, industrial policy resulted in negative productivity growth in the industry.