GTAP Resources: Resource Display
| GTAP Resource #7562 |
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"Analyzing Overcapacity and Subsidies in Industrial Policy Using GTAP" by Xiao, Jingliang and Shenjie Chen Abstract Quantifying subsidies in industrial policy is challenging due to the limited availability of data on implicit and explicit government support. This research aims to explore the phenomenon of overcapacity in the "other transportation equipment" (OTN) sector, including shipbuilding, and its underlying causes. Using GTAP data, we plan to examine the role of direct and implicit subsidies—such as production, entry, and investment subsidies—highlighted in recent literature (Barwick et al., 2024). Additionally, we will investigate how a high household savings rate in some countries (e.g, China) may indirectly exacerbate overcapacity because of the restricted financial markets and underdeveloped social safety net. To quantify the extent and impact of these subsidies, we propose employing the historical decomposition methodology outlined by Dixon and Rimmer (2023). This approach will allow us to estimate implied subsidies from 2014 to 2024 by simulating counterfactual scenarios. Our study seeks to provide insights into the global and domestic welfare consequences of overcapacity in the OTN sector. By bridging empirical data with structural modeling, we aim to contribute to the broader discourse on the evaluation of industrial policies. |
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- Domestic policy analysis - Economic growth - Asia (East) |
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Public Access  Paper (1.1 MB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 9/15/2023 2:05:45 PM
