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Industrial Policy and Domestic Value‐Added in Production and Exports: The Chinese Experience

Year: 2025

Type: article

Abstract: ABSTRACT This paper studies the role of China's industrial policy in the evolving share of domestic value added (DVA) in its production and exports. We propose a method to quantify the DVA share in exports by extending. With national input–output tables and trade statistics from 2007 to 2020, we see a strong increase of the DVA share in exports and a declining share of processing trade. Using propensity score matching (PSM) to select control sectors that are most similar to the ones favoured by China's industrial policies, we confirm the role of industrial policy in these changes.

Source: World Economy

DOI: 10.1111/twec.13700

Authors: Kun Cai, Zhi Wang, Shang‐Jin Wei

Institutions: University of International Business and Economics, George Mason University, Center for Economic and Policy Research, Fudan University, Columbia University

Language: English

Topic: Global trade and economics

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Industry, innovation and infrastructure, Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $3,570