Picking 'winners' in space: Impact of spatial targeting on firm performance in China
研究中国产业鼓励政策的空间特征及其对企业生产率的影响，发现政策偏向落后城市，但密集城市中低绩效企业受损，高绩效企业微利，若改为空间中性政策可提升平均生产率14-16%但加剧区域不平等。
Abstract This paper examines the spatial patterns of China's industrial encouragement policy and its distributional impact on firm productivity. To this end, I develop separate proxies to measure three popular policy instruments (subsidies, tax holidays, and preferential access to loans). I first show that China's industrial support policies tend to exhibit a prominent spatial feature of targeting firms located in lagging cities with lower density. Taking into account potential endogeneity of industrial policy, unobserved heterogeneity and firm dynamics, quantile regression techniques show that more intense industrial support leads to: (a) a reduction in the productivity of lower‐performing firms, especially in denser cities; and (b) a small productivity gain for better performing firms but only in denser cities. Counterfactual analysis further reveals that pursuing an alternative, space‐neutral industrial encouragement policy would increase average productivity by 14–16%, in aggregate, but also contribute to significantly higher regional inequality.