We study the demand for government participation in China's venture capital and private equity market. We conduct a large-scale, non-deceptive field experiment in collaboration with the leading industry service provider, through which we survey both sides of the market: the capital investors and...

A relatively mild form of government failure - for example, bureaucrats can count but do not differentiate quality - can significantly affect the efficacy of industrial policy. We investigate this idea in the context of China's largest pro-innovation industrial policy using a structural model....

How should industrial policies be directed to reduce distortions and foster economic development? We study this question in a multi-sector model with technology adoption, where the production of goods and modern technologies features rich network structures. We provide simple formulas for the...

In this paper we revisit the issue of the scope of bargaining between firms and unions. It is shown that an agreement between parties on the bargaining agenda may endogenously emerge only on the Efficient Bargaining arrangement, provided that union's power is not too high.

Common wisdom suggests that firms with higher productivities earn higher profits and the higher productivities of the firms benefit consumers by increasing outputs. We show that productivity difference may not matter for outputs and profits in presence of wage bill maximizing labor unions. Our...

This paper studies the problem of location-quantity choice in a duopoly in which the wage paid by each firm is set by the corresponding monopoly union. Compared with the outcome obtained in location-price choice game, we find that the wage setting choice for both unions does not change in our...

Common wisdom suggests that firms with higher productivities earn higher profits and the higher productivities of the firms benefit consumers by increasing outputs. We show that productivity difference may not matter for outputs and profits in presence of wage bill maximizing labor unions. Our...

Rising concern over the impact of Chinese industrial policy has led to severe trade tensions between China and some of its major trading partners. In recent years, foreign criticism has increasingly focused on the so-called "Made in China 2025" initiative. In this paper, we use information...

Are Chinese industrial policies making the targeted Chinese firms more productive? Alternatively, are efforts to promote productivity undercut by efforts to maintain or expand employment in less productive enterprises? In this paper, we attempt to shed light on these questions through the...