Nathan Lane, PhD
Associate Professor of Economics, Univ. of 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 economic history. I enjoy using messy data and high-dimensional methods to answer difficult questions. See my work with The Industrial Policy Group, an empirical research lab.

Current Work

The New Economics of Industrial Policy. (2023). Forthcoming, Annual Review of Economics.

Réka Juhász, Nathan Lane, & Dani Rodrik

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, is offering 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.

The Who, What, When, and How of Industrial Policy: A Text-Based Approach. (2023). NBER Working Paper.

Réka Juhász, Nathan Lane, Emily Oehlsen, & Verónica C Pérez

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. (2022). Accepted, Quarterly Journal of Economics.

Nathan Lane

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. (2023). R&R, Journal of European Economic Assoc.

David Kreitmeir, Nathan Lane, &
Paul A Raschky

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.

The Political Economics of Industrial Policy. Requested/Accepted. Journal of Economic Perspectives.

Reka Juhasz & Nathan Lane

Working paper coming soon.

Publications & Accepted

Dell, M., Lane, N. and Querubin, P. (2018), The Historical State, Local Collective Action, and Economic Development in Vietnam. Econometrica, 86: 2083-2121.

Manufacturing Revolutions: Industrial Policy and Industrialisation in South Korea. (2022) Accepted, Quarterly Journal of Economics.

Juhász, R., Lane, N., Rodrik, D. The New Economics of Industrial Policy. (2023). Accepted, Annual Review of Economics.

Lane, N. (2020). The new empirics of industrial policy. Journal of Industry, Competition and Trade, 20, 209-234.