Nathan Lane, PhD
Associate Professor of Economics, Oxford
Fellow, Merton College, Oxford
Cofounder, Industrial Policy Group
Research
I’m an empirical economist working at the intersection of economic development, political economy, trade, and industrial economics. My work has appeared in The New York Times, The Economist, The Financial Times, The Wall Street Journal, Noahpinion, Trade Talks, the U.S. Council of Economic Advisers’ Economic Report of the President, and more.
See my work with The Industrial Policy Group, an empirical research lab. I’m an affiliate of CESifo research network and a cofounder of the Sodalabs.io
Current Research
Industrial Policy and the Global Semiconductor Sector (2024). NBER Working Paper Series
Penny Goldberg, Réka Juhász, Nathan Lane, Guilia Lo Forte, & Jeff Thurk
Featured in the NBER Research Digest
The resurgence of subsidies and industrial policies has raised concerns about their potential inefficiency and alignment with multilateral principles. Critics warn that such policies may divert resources to less efficient firms and provoke retaliatory measures from other countries, leading to a wasteful “subsidy race.” However, subsidies for sectors with inherent cross-border externalities can have positive global effects. This paper examines these issues within the semiconductor industry: a key driver of economic growth and innovation with potentially significant learning-by-doing and strategic importance due to its dual-use applications.
Our study aims to (1) document and quantify recent industrial policies in the global semiconductor sector, (2) explore the rationale behind these policies, and (3) evaluate their economic impacts, particularly their cross-border effects, and compatibility with multilateral principles. We employ historical analysis, natural language processing, and a model-based approach to measure government support and its impacts. Our findings indicate that government support has been vital for the industry’s growth, with subsidies being the primary form of support.
Preliminary model estimates indicate that while learning-by-doing exists, it is smaller than commonly believed, with significant international spillovers. These spillovers likely reflect cross-country technology transfers and the role of fabless clients in disseminating knowledge globally through their interactions with foundries. Such cross-border spillovers are not merely accidental but result from deliberate actions by market participants that cannot be taken for granted. Firms may choose to share knowledge across borders or restrict access to frontier technology, thereby excluding certain countries. Future research will use model estimates to simulate the quantitative implications of subsidies and to explore the dynamics of a “subsidy race” in the semiconductor industry.
The Political Economy of Industrial Policy (2024). Journal of Economic Perspectives.
Réka Juhász and Nathan Lane
Summary column in the IMF’s Finance & Development magazine.
We examine the ways in which political realities shape industrial policy through the lens of modern political economy. We consider two broad “governance constraints”: i) the political forces that shape how industrial policy is chosen and ii) the ways in which state capacity affects implementation. The framework of modern political economy suggests that government failure is not a necessary feature of industrial policy; rather, it is more likely to emerge when countries pursue industrial policies beyond their governance capacity constraints. As such, our political economy of industrial policy is not fatalist. Instead, it enables policymakers to constructively confront the challenges of policy design.
The New Economics of Industrial Policy. (2023). Annual Review of Economics.
Réka Juhász, Nathan Lane, & Dani Rodrik
Featured in the Financial Times, The Economist, and more.
We discuss the considerable literature that has developed in recent years providing rigorous evidence on how industrial policies work. This literature is a significant improvement over the earlier generation of empirical work, which was largely correlational and marred by interpretational problems. On the whole, the recent crop of papers offers a more positive take on industrial policy. We review the standard rationales and critiques of industrial policy and provide a broad overview of new empirical approaches to measurement. We discuss how the recent literature, paying close attention to measurement, causal inference, and economic structure, offers a nuanced and contextual understanding of the effects of industrial policy. We re-evaluate the East Asian experience with industrial policy in light of recent results. Finally, we conclude by reviewing how industrial policy is being reshaped by a new understanding of governance, a richer set of policy instruments beyond subsidies, and the reality of de-industrialization.
Measuring Industrial Policy: A Text-Based Approach. (2024).
Réka Juhász, Nathan Lane, Emily Oehlsen, & Verónica C. Pérez
Featured in The Financial Times, The Economist, multiple multilateral publications, and more.
Since the 18th century, policymakers have debated the merits of industrial policy (IP). Yet, economists lack measures and data on its use. We provide a new approach to measuring industrial policy from text and study its global patterns. We create an automated classification algorithm and categorize policies from a global database of commercial policy descriptions, 2009—2020. By quantifying policy at the country, industry, and year levels, we provide a first disaggregate analysis of international industrial policies. We highlight four findings. First, IP is common (25% of policies in our database) and has expanded since 2010. Second, instead of blunt tariffs, IP is granular and technocratic. Countries tend to use subsidies and export promotion measures, often targeted at individual firms. Third, the countries engaged most in IP tend to be wealthier (top income quintile) liberal democracies. In our data, IP is rarer among the poorest nations (bottom quintile). Fourth, IP is targeted toward a subset of industries and is highly correlated with an industry’s revealed comparative advantage. Our approach to measuring industrial policy shows that contemporary practice is likely much different from the past.
Manufacturing Revolutions: Industrial Policy and Industrialisation in South Korea. (2025). Accepted. Quarterly Journal of Economics.
Nathan Lane
Featured on Trade Talks, in The Economist, the Council of Economic Advisers Report of the President, and more.
I study the impact of industrial policy on industrial development by considering an important episode during the East Asian miracle: South Korea's heavy and chemical industry (HCI) drive, 1973-1979. Based on newly assembled data, I use the introduction and withdrawal of industrial policies to study the impacts of industrial policy during and after the intervention period. (1) I reveal that HCI promoted the expansion and dynamic comparative advantage of directly targeted industries. (2) Using variation in exposure to policies through the input-output network, I demonstrate that HCI indirectly benefited downstream users of targeted intermediates. (3) The benefits of HCI persist even after the end of HCI, and others take time to manifest. These findings suggest that the temporary drive shifted Korean manufacturing into more advanced markets and supported durable change. This study helps clarify lessons drawn from the East Asian growth miracle.
The Value of Names: Civil Society, Information, and Governing Multinationals. (2024). Conditionally Accepted. Journal of European Economic Association.
David Kreitmeir, Nathan Lane, &
Paul A Raschky
Featured in Quartz, ProMarket, Monga Bay, and in Australian Media. See Oxford’s press release and summaries by Monash University.
Does the human rights spotlight impact multinationals? We evaluate the effect of publicizing human rights violations on firm value, focusing on salient events at the center of international campaigns: the assassination of environmental activists. Collecting 20 years of data on activist deaths, we use financial event study methodology to estimate the impact of the human rights spotlight on the stock price of firms associated with violence. We find that the effect of the human rights spotlight is substantial. Firms named in assassination coverage have large, negative abnormal returns after events and imply a median loss in market capitalization of 100 million USD. We show that the media plays a key role in these effects; the negative impact of assassinations is strongest when they coincide with calm news cycles versus saturated news cycles, where news is less likely to reach investors. Our study highlights economic over non-pecuniary mechanisms. Association with violence negatively impacts supply chain contracts and also inspires negative reactions by institutional investors. Lastly, we show that assassinations are positively related to the royalties paid by mining projects to domestic governments.