IMF Working Papers

Production Network Features of Industrial Policy

By Vanya Georgieva

January 17, 2025

Download PDF More Formats on IMF eLibrary Order a Print Copy
More formats on IMF eLibrary Order a Print Copy

Preview Citation

Format: Chicago

Vanya Georgieva. "Production Network Features of Industrial Policy", IMF Working Papers 2025, 023 (2025), accessed January 22, 2025, https://doi.org/10.5089/9798400296413.001

Export Citation

  • ProCite
  • RefWorks
  • Reference Manager
  • BibTex
  • Zotero
  • EndNote

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Industrial policy has gained popularity in recent years and across all regions and income levels. Consequently, it is increasingly important to understand how governments choose the sectors they target. This analysis explores the role of domestic production networks in sector targeting, while controlling for other sector and global value chain characteristics. Combining datasets on industrial policy (Global Trade Alert) and input-output linkages (ICIO, OECD) provides novel insight into the network features of industrial policy. In particular, a sector’s ‘centrality’—i.e., its degree of connectedness - within the domestic production network is an important and significant predictor of sector intervention. The results indicate that industrial policy is used differently across regions, income groups, time periods, and types of policy tools. Notably, emerging economies tend to target more central sectors, while advanced economies target less central ones, on average. However, there has been a global shift toward more central sectors over time. Lastly, subsidies are deployed on more central sectors, while tariffs are used on less central ones.

Subject: Export restrictions, Exports, Imports, Income, International trade, National accounts, Tariffs, Taxes

Keywords: Asia and Pacific, Export restrictions, Exports, Global, Global Value Chains, Imports, Income, Industrial Policy, Production Networks, Spillovers, Subsidies, Tariffs, Trade Policy

Publication Details

You May Also Be Interested In...

Malta: Selected Issues

January 22, 2025

Malta: 2024 Article IV Consultation-Press Release; and Staff Report

January 22, 2025

Domestic Market Integration and Regional Growth: The Case of Mexico

January 17, 2025

The Macroeconomic and Welfare Benefits of Building Resilience in Disaster-Prone Developing Countries

January 17, 2025