Place-based industrial policy and firm-level skill upgrading: evidence from China's demonstration bases for new industrialization

Purpose Industrial policy can influence not only how much firms produce but also the types of workers they employ. This study examines whether China’s National Demonstration Bases for New Industrialization reshape manufacturing firms’ educational and occupational composition. Design/methodology/approach We compile approval records from over 500 official documents and match them to A-share listed manufacturing firms at the county level for 2005–2023. Staggered difference-in-differences models, supplemented by double machine learning and robustness checks, estimate changes in two dimensions of workforce composition. Findings The policy increases the share of employees with a master’s degree or above and the technical-to-nontechnical personnel ratio. Effects vary across industrial and institutional settings, with clearer evidence for occupational composition than educational attainment in several specifications. Further analysis associates policy implementation with increased customer and industry concentration, while evidence for supplier concentration is inconclusive. Originality/value The study connects research on technological change and skill demand with the institutional setting of place-based industrial policy. By distinguishing educational from occupational composition, it identifies workforce adjustments that aggregate employment and firm performance measures may overlook. The concentration results also motivate further research on supply-chain relationships, market structure, and skilled labor allocation.