Industrial Policy and Blockchain Innovation: Evidence from China
56 Pages Posted: 10 Sep 2024
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: 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
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