Industrial policy, congruence, and innovation: Evidence from “Chinese NASDAQ”
研究中国“新三板”上市公司发现，企业与地方资源禀赋的契合度越高，创新投入和产出越多；但“中国制造2025”政策在增加企业贷款的同时，削弱了这种正向关系，可能导致资本错配和政策扭曲，损害长期创新能力。
This paper investigates the association between firm innovation and endowment-based fundamental factors through the lens of congruence and then examines the impact of a national-level industrial policy on this newly established link. Based on a sample of small and innovative firms listed on the National Equities Exchange and Quotations, China's NASDAQ counterpart, we find that firms with greater congruence with local endowment structure tend to have more innovation inputs and outputs. Additionally, in a quasi-experimental setting, we further examine the effect of the “Made in China 2025” (MC2025) industrial policy. Our findings indicate that MC2025 increases bank loans for treated firms and weakens the positive association between congruence and firm innovation. This suggests that MC2025 has a dual impact: while it increases access to capital, it may also lead to capital misallocations and policy distortions, ultimately hindering long-term innovation capabilities.