Staatliche Unterstützung einzelner Firmen oder ganzer Branchen ist wieder salonfähig. Sei es zur Stärkung der Versorgungssicherheit, strategisch bedeutender Branchen oder zur Bewältigung des Klimawandels: Stets wird versucht, die Wirtschaft in gewünschte Bahnen zu lenken. Eine neue...

We examine effects of government-imposed employment targets on firm behavior. Theoretically, such policies create “polarization,“ causing low-productivity firms to exit the market while others temporarily distort their employment upward. Dynamically, firms are incentivized to improve...

Industriepolitik, also staatliche Interventionen zugunsten einzelner Branchen, Technologien oder Unternehmen, hat weltweit zugenommen. In Fällen von Marktunvollkommenheiten kann Industriepolitik ökonomisch gerechtfertigt sein. Sie kann diese Defizite ausgleichen oder verringern, wenn sie...

The next German government faces unprecedented challenges, with economic stagnation and shifting geopolitical landscapes threatening the country's growth model and sovereignty. The German economy, traditionally reliant on exports to China and the United States, faces mounting pressures from...

Europe's approach to industrial policy has undergone a dramatic transformation in recent years, with state aid reaching 1.4 per cent of GDP in 2022, levels unseen since the early 1990s. While advocates of substantial state aid argue that this intervention is necessary to maintain competitiveness...

We analyze a model of green technological transition along a supply chain. The model generates a unique equilibrium for given initial conditions but multiple steadystates. We show that: (i) even in the presence of Pigouvian environmental taxation, targeted sectoral subsidies are generally...

This EconPol Report sheds light on the global supply of semiconductors. Our analysis of value-added data for the US underscores the importance of semiconductors for advanced economies. Using global trade data and an extensive list of semiconductor-related goods, we provide a detailed description...

Gerschenkron (1962) argued that public institutions such as the State Bank of the Russian Empire spurred the country's industrialization. We test this assertion by exploiting plant-level variation in access to State Bank branches using a unique geocoded factory data set. Employing an...

Many observers see the Covid-19 crisis as marking a major shift in neoliberal globalization. We analyze this question from the perspective of South Africa. We argue that the 2020 crisis has not precipitated a major shift as much as it has rapidly accelerated trends which were already under way...

The European Union (EU) and Germany were already being confronted with rapidly changing dynamics on the economic, ecological, and technological terrains prior to the Covid-19 crisis. The pandemic, however, has fully exposed critical global value chain (GVC) dependencies, jeopardising the already...

This paper investigates the impact of South Korea's rapid robotization, driven by the country's proactive robotization policies, on subjective well-being using individual and householdlevel panel data. We measure individual exposure to robotization by estimating the probability that individuals...

European climate policy was traditionally pursued in the expectation of global policy convergence, ensuring equal opportunities for domestic and foreign firms in achieving climate neutrality. However, increasing geopolitical fragmentation has disrupted this expectation. Across the globe,...

Industrial policies are widespread, but evidence on their workforce effects remains limited. We present novel evidence on the impact of EU technology subsidies on employment and skill demand in Finnish SMEs, 1994-2018. The subsidies fund new machinery, including robots and CNC machines....

This paper investigates the impact of an export promotion policy consisting of ad-valorem subsidies for a set of targeted products, on the performance of Pakistani exports in the textile sector. The findings show that the policy had a small overall impact on exports, while it induced substantial...

The single market is the European Union's most powerful economic asset, yet persistent barriers continue to undermine its potential. We argue that realising that potential requires a dual strategy: strengthening compliance with existing rules and advancing targeted harmonisation where regulatory...

We use nearly a decade's worth of panel data from European Union Chamber of Commerce in China business confidence surveys to analyse the deteriorating outlooks of EU firms in China from 2017 to 2025. All firms in China currently face challenges including slow profit growth and deflation. These...

Using Chinese firm-level trade data combined with global anti-dumping (AD) and countervailing duty (CVD) investigations, we uncover a previously overlooked cost of industrial policy under WTO agreements. At every stage of AD/CVD investigation, subsidies significantly raise the probability of...

The report analyses trends, opportunities, challenges and barriers affecting digital health, and specifically, the innovation, deployment and use of wearable medical devices in the EU. The use of digital health solutions along the patient pathway could drive the integration of clinical services...

The European Economic and Social Committee (EESC) was set up as a consultative body of the European Union in 1957 by the Treaty of Rome. The EESC is an advisory assembly composed of 329 members from Europe's socio-economic sphere nominated by national governments and appointed in a personal...

The European Economic and Social Committee (EESC) was set up as a consultative body of the European Union in 1957 by the Treaty of Rome. The EESC is an advisory assembly composed of 329 members from Europe's socio-economic sphere nominated by national governments and appointed in a personal...

The European Union's industrial policy has gained renewed significance in response to geopolitical shifts, intensifying global competition, and the twin digital and green transitions. This paper analyses the coinciding role that EU State aid law plays as a coordinating instrument for EU...

This article estimates the impact of government subsidies on productivity growth in South Africa, joining the ongoing debate among economists regarding the effectiveness of subsidies as a driver of industrial productivity. While some argue that subsidies address market failures, facilitate R&D,...

Enhancing innovation capability can effectively promote the development of traditional industries. Based on Lewin's behavioral model theory, this study investigated the relationship between industrial support policies and innovation behavior within traditional industries. Utilizing survey data...

For decades, industrial policy and competition policy have been viewed as inherently conflicting, particularly where state intervention may distort markets. However, the current era of geopolitical uncertainty, technological transformation and fragile global supply chains calls for a rethinking...

The competitiveness of German industry is under significant pressure. While politicians acknowledge the need for change, their proposed solutions remain vague and lack a clear strategic direction. Current approaches focus on tax relief, broad investment subsidies for domestic firms or targeted...

This study explores how the relationship between industrial policy and competition law is shifting, with the two increasingly working together to achieve broader economic and strategic aims. Drawing on an analysis of over 2,500 industrial policy interventions using advanced language processing...

This EconPol Report sheds light on the global supply of semiconductors. Our analysis of value-added data for the US underscores the importance of semiconductors for advanced economies. Using global trade data and an extensive list of semiconductor-related goods, we provide a detailed description...

Industrial policy has become a core item in the policy agenda of many governments as well as of the EU which has come up with many policy initiatives over the past two decades. This paper emphasises the important shifts taking place in the global economy with the rise of China but also of other...

Industrial policies (IPs) are increasingly implemented, necessitating a reassessment of their benefits and costs. This study examines their economic and geopolitical drivers and their impact on targeted sectors. While IPs yield moderate and uneven economic gains, they are more effective when...

We analyze a model of green technological transition along a supply chain. The model generates a unique equilibrium for given initial conditions but multiple steadystates. We show that: (i) even in the presence of Pigouvian environmental taxation, targeted sectoral subsidies are generally...

Industrial policies (IPs) are on the rise. The most common motive for pursuing IPs is to boost strategic competitiveness of the targeted products. Leveraging a novel database of industrial policies and using the local projection difference-in-differences approach, this paper examines the dynamic...