New industrial policy design and competition: a computational approach

Boulieris, Petros and Carballa-Smichowski, Bruno and Fourka, Maria Niki and Lianos, Ioannis (2025): New industrial policy design and competition: a computational approach.

Abstract

Following a period during which the two fields evolved separately, a consensus has emerged that competition and industrial policy are not inherently incompatible. This reflects broader intellectual shifts. Industrial policy is now viewed more favorably, not only for traditional development goals but also to strengthen technological capabilities for national security and secure global economic dominance. "Techno-nationalist'' approaches to industrial policy may conflict with global technology diffusion efforts addressing issues like climate change ("techno-globalism''). Despite recent developments in the intersection of competition and industrial policy, there is a lack of evidence on how techno-nationalist and techno-globalist approaches interact with competition policy goals. This article fills this gap by empirically assessing the competitive effects of policy measures. We use a text-as-data approach, combining AI-driven document analysis with structured classification criteria. The data show that techno-globalist industrial policies are generally more pro-competitive than techno-nationalist ones, due to their broader scope and ability to lower entry costs. Moreover, we find that certain policy instruments are primarily associated with anti-competitive criteria, while others tend to exhibit predominantly pro-competitive features. Our results provide a fine-grained characterization of new industrial policy design in light of competition policy goals.

• Item Type: MPRA Paper
• Language: English
• Keywords: Industrial policy, competition, techno-globalism, techno-nationalism, text-as-data, large language models, data analysis.
• Subjects: D - Microeconomics > D0 - General > D02 - Institutions: Design, Formation, Operations, and Impact; L - Industrial Organization > L0 - General; L - Industrial Organization > L5 - Regulation and Industrial Policy > L50 - General; O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy > O25 - Industrial Policy

References

Acemoglu, D., Akcigit, U., Alp, H., Bloom, N., and Kerr, W. (2018). Innovation, reallo cation, and growth. American Economic Review, 108(11):3450–3491.

Aghion, P., Boulanger, J., and Cohen, E. (2011). Rethinking industrial policy. Technical report.

Aghion, P., Cai, J., Dewatripont, M., Du, L., Harrison, A., and Legros, P. (2015). Industrial policy and competition. American economic journal: macroeconomics, 7(4):1–32.

Aghion, P., Dewatripont, M., and Rey, P. (1999). Competition, financial discipline and growth. The Review of Economic Studies, 66(4):825–852.

Aghion, P. and Griffith, R. (2008). Competition and growth: reconciling theory and evidence. MIT press.

Aghion, P., Harris, C., Howitt, P., and Vickers, J. (2001). Competition, imitation and growth with step-by-step innovation. The Review of Economic Studies, 68(3):467–492.

Amsden, A. H. (2001). The rise of" the rest": challenges to the west from late industrializing economies. Oxford University Press.

Andreoni, A. and Chang, H.-J. (2019). The political economy of industrial policy: Structural interdependencies, policy alignment and conflict management. Structural change and economic dynamics, 48:136–150.

Bauer, M. and Erixon, F. (2020). Europe’s quest for technology sovereignty: Opportunities and pitfalls. Technical report, ECIPE Occasional Paper.

Bloom, N., Sadun, R., and Van Reenen, J. (2006). It ain’t what you do it’s the way that you do it investigating the productivity miracle using multinationals. Centre for Economic Performance, London School of Economics. Retrieved September, 12:2007.

Blundell, R., Griffith, R., and Van Reenen, J. (1999). Market share, market value and innovation in a panel of british manufacturing firms. The review of economic studies 66(3):529–554.

Buccirossi, P., Ciari, L., Duso, T., Spagnolo, G., and Vitale, C. (2013). Competition policy and productivity growth: An empirical assessment. Review of Economics and Statistics, 95(4):1324–1336.

Cherif, R. and Hasanov, F. (2019). The return of the policy that shall not be named: Principles of industrial policy. International Monetary Fund.

Coppens, P., Hilken, K., and Buts, C. (2015). On the longer-term effects of state aid on market shares. European State Aid Law Quarterly, 14(2):271–279.

Criscuolo, C., Gonne, N., Kitazawa, K., and Lalanne, G. (2022). An industrial policy framework for OECD countries: Old debates, new perspectives.

Dasgupta, P. and Stiglitz, J. (1988). Learning-by-doing, market structure and industrial and trade policies. Oxford Economic Papers, 40(2):246–268.

Davies, W. (2016). The limits of neoliberalism: Authority, sovereignty and the logic of competition.

Disney, R., Haskel, J., and Heden, Y. (2003). Restructuring and productivity growth in UK manufacturing. The Economic Journal, 113(489):666–694.

Draghi, M. (2024). The future of European competitiveness: A competitiveness strategy for Europe. European Commission.

Dutz, M. A. and Hayri, A. (2000). Does more intense competition lead to higher growth?, volume 2249. World Bank Publications.

Edgerton, D. E. (2007). The contradictions of techno-nationalism and techno-globalism: A historical perspective. New Global Studies, 1(1).

European Commission (2019). Case m.8677 - siemens/alstom. February 6th, 2019.

European Commission (2025). Communication from the commission - a competitiveness compass for the eu. COM(2025) 30 final.

Evenett, S., Jakubik, A., Martín, F., and Ruta, M. (2024). The return of industrial policy in data. The World Economy, 47(7):2762–2788.

Freeman, C. (1995). The ‘national system of innovation’in historical perspective. Cambridge Journal of economics, 19(1):5–24.

Friends of Industry (2018). Joint statement of 18 december 2018. Sixth Ministeria Meeting, 18 December 2018.

Futia, C. A. (1980). Schumpeterian competition. The Quarterly Journal of Economics, 94(4):675–695.

Galbraith, J. K. (1967). The new industrial state. Antitrust L. & Econ. Rev., 1:11.

Gerber, D. (2010). Global Competition: Law, Markets, and Globalization. Oxford University Press.

Gereffi, G. and Lee, J. (2016). Economic and social upgrading in global value chains and industrial clusters: Why governance matters. Journal of business ethics, 133(1):25–38.

Grossman, G. M. and Horn, H. (1988). Infant-industry protection reconsidered: the cas of informational barriers to entry. The Quarterly Journal of Economics, 103(4):767–787.

Hovenkamp, H. J. (2008). Schumpeterian competition and antitrust.

Januszewski, S. I., Köke, J., and Winter, J. K. (2002). Product market competition, corporate governance and firm performance: an empirical analysis for germany. Research in Economics, 56(3):299–332.

Jessop, B. (2015). The course, contradictions, and consequences of extending competition as a mode of (meta-) governance: towards a sociology of competition and its limits. Distinktion: Journal of Social Theory, 16(2):167–185.

Juhász, R. and Lane, N. (2024). The political economy of industrial policy. Journal of Economic Perspectives, 38(4):27–54.

Juhász, R., Lane, N., Oehlsen, E., and Pérez, V. C. (2022). The who, what, when, and how of industrial policy: A text-based approach. What, When, and How of Industrial Policy: A Text-Based Approach (August 15, 2022).

Kerber, W. (2023). Towards a dynamic concept of competition that includes innovation. In OECD, DAF/COMP/WD(2023)42.

Kovacic, W. (2024). The contribution of competition agencies to formulating industrial policy. Technical report, OECD.

Landesmann, M. A. (2015). Industrial policy: Its role in the european economy. Intereconomics, 50(3):133–138.

Le Maire, B. (2019). Discours de bruno le maire, ministre de l’economie et des finances. https://presse.economie.gouv.fr/wp-content/uploads/2020/11/ d263a9ac3acbf9375e3d713a2ad7893b.pdf. Institute of International & European Affairs, Dublin.

Letta, E. (2024). Much more than a market-speed, security, solidarity: Empowering the single market to deliver a sustainable future and prosperity for all eu citizens.

Lianos, I. (2018). Polycentric competition law. Current Legal Problems, 71(1):161–213.

Lianos, I. (2019). The future of competition policy in europe–some reflections on the interaction between industrial policy and competition law. CLES Policy Paper Series,1.

Lianos, I. (2020). Competition law as a form of social regulation. The Antitrust Bulletin, 65(1):3–86.

Lianos, I. (2022). Reorienting competition law. Journal of Antitrust Enforcement 10(1):1–31.

Lianos, I. (2024). What the Draghi report really means for the future of european competition policy. ProMarket.

Lianos, I., Mateus, A., and Raslan, A. (2013). Is there a tension between development economics and competition? In Lianos, I. et al., editors, Competition Law and Development, pages 35–51. Stanford University Press, 1st edition.

Lianos, I., Minssen, T., and Kollmar, C. (2022). Tackling grand challenges with competition law: lessons from the pandemic. In EU Competition Law and Pharmaceuticals, pages 279–297. Edward Elgar Publishing. List, F. (1856). National system of political economy. JB Lippincott & Company.

Luo, Y. (2021). Illusions of techno-nationalism. Journal of International Business Studies, 53(3):550.

Ma, T.-C. (2011). The effect of competition law enforcement on economic growth. Journal of Competition Law and Economics, 7(2):301–334. 28

Mazzucato, M. (2011). The entrepreneurial state. Soundings, 49(49):131–142.

Mazzucato, M. (2021). Mission economy: A moonshot guide to changing capitalism.Penguin UK.

Mazzucato, M. and Rodrik, D. (2023). Industrial policy with conditionalities: a taxonomy and sample cases.

McInnes, L., Healy, J., and Melville, J. (2020). Umap: Uniform manifold approximation and projection for dimension reduction.

Montresor, S. (2001). Techno-globalism, techno-nationalism and technological systems: organizing the evidence. Technovation, 21(7):399–412.

Nickell, S., Nicolitsas, D., and Dryden, N. (1997). What makes firms perform well? European economic review, 41(3-5):783–796.

Notermans, T. and Piattoni, S. (2025). From ordo-liberalism to ordo-keynesianism? the contradictory nature of eu economic governance. Journal of European Integration, pages 1–22.

OECD (2019a). Competition Assessment Toolkit: Operational Manual, volume III. OECD Publishing, Paris, version 4.0 edition.

OECD (2019b). Competition assessment toolkit: Principles.

OECD (2024). Pro-competitive industrial policy policy. Technical report.

Owen, G. (2012). Industrial policy in europe since the second world war: what has been learnt? Technical report, ECIPE occasional paper.

Pack, H. and Westphal, L. E. (1986). Industrial strategy and technological change: theory versus reality. Journal of development economics, 22(1):87–128.

Peinert, E. (2021). Cartels, competition, and coalitions: the domestic drivers of international orders. Review of International Political Economy, 28(6):1652–1676.

Piechucka, J., Sauri-Romero, L., and Smulders, B. (2024). Competition and industrial policies: Complementary action for eu competitiveness. Journal of Competition Law & Economics, 20(4):384–408.

Pop, G. and Connon, D. (2020). Industrial Policy Effects and the Case for Competition. World Bank.

Pursell, G. (2001). Australia’s Experience with Local Content Programs in the Auto Industry: Lessons for India and Other Developing Countries, volume 2625. World Bank Publications.

Sauter, W. (1997). Competition law and industrial policy in the EU. Oxford University Press.

Scott Morton, F. (2024). The three pillars of effective european union competition policy. Technical report, Bruegel Policy Brief.

Seidl, T. and Schmitz, L. (2024). Moving on to not fall behind? technological sovereignty and the ‘geo-dirigiste’turn in eu industrial policy. Journal of European Public Policy, 31(8):2147–2174.

Singh, A. (2002). Competition and competition policy in emerging markets: international and developmental dimensions. Growth and Economic Development: Essays in Honour of AP Thirlwall.

Spence, M. (1986). Cost reduction, competition and industry performance. In New developments in the analysis of market structure: Proceedings of a conference held by the international economic association in Ottawa, Canada, pages 475–518. Springer.

Stiglitz, J. E. and Greenwald, B. C. (2014). Creating a learning society: A new approach to growth, development, and social progress. Columbia University Press.

Stone, S., Messent, J., and Flaig, D. (2015). Emerging policy issues: localisation barriers to trade.

Sturgeon, T., Lima Chagas, L., and Barnes, J. (2017). Inovar auto: Evaluating brazil’s automative industrial policy to meet the challenges of global value chains.

Tirole, J. (2024). Competition and industrial policy in the 21st century. Oxford Open Economics, 3(Supplement_1):i983–i1001.

UNCTAD (2023). Interaction between competition and industrial policies. Technical report, Bruegel Policy Brief.

Välilä, T. (2006). No policy is an island-on the interaction between industrial and other policies. EIB papers, 11(2):8–33.

Von Der Leyen, U. (2024). Mission letter to teresa ribera rodríguez. https: //commission.europa.eu/document/download/5b1aaee5-681f-470b-9fd5- aee14e106196_en?filename=Mission%20letter%20-%20RIBERA.pdf.

Wiryawan, B. A., Aginta, H., and Fazaalloh, A. M. (2023). Does gvc participation help industrial upgrading in developing countries? new evidence from panel data analysis. The Journal of International Trade & Economic Development, 32(7):1112–1129.