 Government industrial priorities, public corporate governance and corporate innovation: A political push perspectiveJunhong Bai, Qishuo Cai, Nengzhi Yao and Qiaozhe Guo Economic Analysis and Policy, 2025, vol. 85, issue C, 1885-1900 Abstract: This study develops a “political push” framework, largely rooted in institutional theory, to explain how government can foster corporate innovation through designating firms as industrial priorities and using public governance tools. Leveraging the sudden release of national prioritized industries under the Made in China 2025 (MiC2025) policy, our difference-in-difference analysis shows that government industrial priorities can significantly improve the innovation output of the prioritized firms. In addition, we find that the impact is strengthened when firms are governed more closely by the government in the forms of political appointment, party monitoring and state ownership. Our mechanism analysis further suggests that the positive impact of government industrial priorities is primarily achieved through enhanced human capital, improved tax incentives and increased government subsidies. Our findings offer a novel perspective and robust empirical evidence on the interplay between government industrial policy, public governance, and corporate innovation. Keywords: Government industrial priorities; Innovation; Made in china 2025; Public Governance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:85:y:2025:i:c:p:1885-1900 DOI: 10.1016/j.eap.2025.02.023 Access Statistics for this article Economic Analysis and Policy is currently edited by Clevo Wilson More articles in Economic Analysis and Policy from Elsevier |
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