Industrial Policy and Blockchain Innovation: Evidence from China

56 Pages Posted: 10 Sep 2024

See all articles by Yulin Ma

Yulin Ma

The University of Western Australia - Department of Accounting and Finance, Students

Yuanji Wen

The University of Western Australia - Department of Accounting and Finance

Dirk G. Baur

University of Western Australia - Business School; Financial Research Network (FIRN)

Date Written: September 11, 2024

Abstract


Industrial policy is a common tool for governments to foster new technologies and promote innovation, despite concerns regarding its effectiveness. This study investigates the effects of blockchain-related industrial policies on firm innovation. The blockchain policies issued by various local governments in China since 2016 provide a rare opportunity for such analysis. Using the Difference-in-Difference method, we find that the number and short-term value of patents significantly increase after the introduction of blockchain policies. However, the long-term quality of patents improves only marginally. We then focus on subsidies and patent-specific policies, as subsidies offer the most direct and tangible support, and policies emphasizing patents provide a clear link between patents and R&D outcomes. The results show that subsidies in these policies generally boost both the number and value of patents, while blockchain policies emphasizing patents primarily increase patent value. These positive effects are driven by increased R&D activities and an enhanced collaborative industry ecosystem. Overall, this study supports the argument that industrial policy can effectively boost firm innovation and provides valuable insights for global policymakers to develop strategies for the widespread adoption of emerging technologies.

Keywords: Industrial policy, Innovation, Blockchain, Difference-in-Differences

Suggested Citation

Ma, Yulin and Wen, Yuanji and Baur, Dirk G., Industrial Policy and Blockchain Innovation: Evidence from China (September 11, 2024). Available at SSRN: https://ssrn.com/abstract=4952067 or http://dx.doi.org/10.2139/ssrn.4952067

Yulin Ma

The University of Western Australia - Department of Accounting and Finance, Students ( email )

Australia
0435550338 (Phone)

Yuanji Wen (Contact Author)

The University of Western Australia - Department of Accounting and Finance ( email )

School of Business
35 Stirling Highway
Crawley, Western Australia 6009
Australia

Dirk G. Baur

University of Western Australia - Business School ( email )

School of Business
35 Stirling Highway
Crawley, Western Australia 6009
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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