TY  - BOOK
AU  - Kiyota,Kozo
AU  - Okazaki,  Tetsuji
TI  - Industrial policy cuts two ways: evidence from cotton spinning firms in Japan, 1956-1964
SN  - 00222186
AV  - HB73 JOU 
PY  - 2010///
CY  - Chicago
PB  - University of Chicago Press
N2  - A number of studies have revealed a negative effect of industrial policy on productivity growth. Is this because industrial policy fails to control the activities of firms or because it can effectively control them? This paper attempts to answer these questions, using firm-level data from the cotton-spinning industry in Japan for the period 1956-64. We determine that industrial policy cut two ways during this period. Industrial policy effectively controlled the output of cotton-spinning firms, which contributed to the establishment of a stable market structure during the period. On the flip side, such policy constrained the reallocation of resources from less productive large firms to more productive small firms. Combined with the negative productivity growth in large firms during this period, industrial policy resulted in negative productivity growth in the industry
UR  - https://doi.org/10.1086/605129
ER  -